Is the Candidate Market Over? Here's What the Latest Compensation Data Tells Us
The last couple of years have been the most challenging for hiring since the start of the 2010s. This is because post pandemic, hiring companies in several industries – especially manufacturing – have faced challenges at nearly every level of the organization. One of the most prevalent aspects has been the market conditions favoring candidates. Increased competition for top executive talent while hiring demand was spiking forced employers to flex on compensation, relocation packages, signing bonuses, quality of life factors including remote / hybrid work arrangements and more.
Even though firms like Stiles Associates typically pursue passive candidates, most of our recent hires were being pursued simultaneously by other suitors. In order to win, hiring organizations have needed to adapt, streamline interview processes and make offers more rapidly than they had pre-pandemic. Even when they did everything right, clients were still losing out to other competing hiring companies, surprise retention bonuses, or eleventh-hour renegotiation efforts from candidates sensing they had leverage.
In the big picture, however, this is nothing new. The talent market is dynamic, and there are periods when the pendulum swings in favor of candidates followed by shifts back toward companies. And as we settle into the second half of 2023, it appears the pendulum’s swing toward candidates may have slowed or even reached its end.
For example, the average Plant Manager role has increased its base salary by 15 to 20 percent since 2020, but hasn’t moved much since the start of the calendar year. There were many factors that drew the initial surge – the increased demand for goods, supply chain crunches, consumer behavior and inflation to name a few – but the compensation levels won’t likely change until the next significant event or market shift occurs. Additionally, incidents of retention bonuses at the point of resignation have significantly decreased.
Of course, select top-tier executives in highly competitive niche markets are excluded from the above. In these markets we’re not seeing the same level of plateau, so there continues to be strong demand and fewer restrictions on compensation for certain individuals. The most competent and visionary executives drive growth, innovation and strategic decision-making – and companies will continue to pay a premium for those leaders as they always have.
Strategies for the current state
While we’re definitely seeing signs of candidate market plateau, it’s important to note we’re not yet seeing a client’s market. We’re currently somewhere between the two, presenting new opportunities and risks for hiring companies.
Now is a great time to revisit critical hire efforts that were perhaps abandoned during the height of the frenzy. Market conditions have calmed, so now can be a great time to re-approach those A-players that were out of reach two years ago.
This is also a great time to hardwire some of the more competitive hiring behaviors developed over the last couple of years. All the winning tactics that worked for the last few years will serve companies well in the future. Streamlining the interview process, approaching candidates with a compelling selling story and having absolute clarity on the vision for the role all remain best-in-class practices. Most organizations will backslide on these things to some degree., but the amount to which they can preserve them, the more benefits it will provide when the market finds its next up cycle.
Smart organizations will also recognize this is not the time to reclaim ground. The new levels that were set on base compensation and benefits are unlikely to reverse from here. Executives seek fair remuneration for their skills and experience, so failing to provide competitive compensation can lead to a talent exodus, ultimately impacting the organization's performance, reputation and ability to attract future talent. Aligning compensation with the value of the candidate fosters a mutually beneficial relationship, contributing to enhanced performance and job satisfaction.
Relocation Resistance is Real: How Companies Overcome the Hurdles
Americans are relocating for new roles at a record-low rate.
Recent data from outplacement services firm Challenger, Gray & Christmas reveals just 1.6% of jobseekers in the first quarter of 2023 packed up their things and headed for a new city or state. This is down from 6% in 2019 and down from nearly a third of workers from the 1980s and 1990s. The reasons are complicated, but it’s clear this downward trend creates headaches for companies that need to source talent outside of their geographic areas. This downward trend is especially challenging for manufacturers looking to hire on-site, executive talent in an already tight market.
Here's what many of the top companies are doing to address the relocation challenge head on and create industry-leading rosters:
Prioritizing local candidates
The easiest way to combat the relocation challenge is to avoid it altogether, if possible. Local candidates make up the bulk of our client’s new hires for several reasons, including ease of the hiring process, lower relocation costs and familiarity with the local culture and business practices. Hiring local talent can also lead to a quicker onboarding process, reducing the time and resources required to get the new employee up to speed. For the bulk of the searches at Stiles Associates, we begin the search process by targeting top talent closer to the location then expanding out as needed. It’s important to note that even in today’s environment, not every suitable candidate in a given market is on LinkedIn or reviewing local job boards. A proactive search that includes working professional networks is key to finding those “under-the-radar” local candidates.
Selling the community, company and career trajectory
The top reason we hear why some candidates are hesitant to relocate is family-related concerns, especially when it comes to their children. Disrupting a child's schooling can be a major deterrent, as parents often prioritize stability and continuity in their children's education – and understandably so.
This is where they get creative to sell the location(s) where they would potentially move. Great neighborhoods; family-friendly events and activities; things to do; and schools are just a few things prepared companies highlight. Few understand the communities and neighborhoods of the surrounding area better than the hiring team, so they enthusiastically share this throughout the process and even show candidates if they come in for an interview.
Selling the community isn’t enough, however. Pitching candidates on the company itself and tying it to their career growth is incredibly effective. Sharing the company culture; what’s behind the mission statement; and the long-term expectations for the company go a long way in instilling confidence that the move isn’t only about taking the next job, but the next step to a more fruitful career and a happier family.
Offering competitive relocation packages
Relocating for a job can be a costly affair, with expenses ranging from moving and housing costs to potential adjustments in lifestyle. While some companies are willing to cover all relocation costs, many organizations offer partial relocation packages, leaving candidates to foot a substantial portion of the bill. Sometimes, companies will offer temporary housing; moving expenses; and / or cover incidentals. Any extras companies cover will help, as the financial burden may deter potential candidates from considering relocation as a viable option.
For companies that decide to partner with a recruiting firm, they confirm the relocation package at the beginning of the search process. Clear communication about the company's relocation policy saves time and prevents candidates from pursuing career opportunities that might not align with their relocation preferences.
Understanding that candidates’ perception of work is evolving
The concept of work has undergone a profound transformation in recent years, and this is here to stay. With the advent of remote work and flexible work arrangements, many candidates now prioritize work-life balance and a favorable company culture over simply higher compensation. Sometimes, companies can’t just spend their way to top talent – even if that level of spending is necessary to keep them interested. Organizations that promote a healthy lifestyle and foster a positive work environment are more likely to attract the A-players willing to relocate for the right opportunity.
Utilizing internal training and development programs
While bringing in outside talent is sometimes unavoidable, the top organizations successfully develop internal employees and promote from within. It fosters a sense of loyalty and motivation among the existing workforce, as they see clear opportunities for growth and advancement. Internal promotions also save time and resources that would otherwise be spent on external recruitment processes, allowing for smoother transitions and quicker skill integration. Promoting from within nurtures a culture of continuous learning, as employees are encouraged to develop their skills and competencies in anticipation of future opportunities.
Conclusion
Relocation remains a significant decision that candidates weigh carefully, considering various factors like family, life balance, career goals and financial implications. While some industries and employers are embracing remote work options, the majority still prioritize local candidates. To attract top talent willing to relocate, companies must offer attractive relocation packages and additional perks to make the transition smoother. By understanding the evolving priorities and concerns of candidates, businesses can adapt their hiring practices to meet the changing demands of the candidate market.
The Benefits of Job Relocation During the Holiday Season
The holiday season, often seen as a time for relaxation and celebration, can also be an opportunity for significant life changes, including relocation for a new role. While many might hesitate to make a move during this festive period, there are compelling reasons why it can be the perfect time to take the plunge.
Lower housing and relocation costs
According to Lawrence Yun, Chief Economist for the National Association of Realtors, the lowest home prices come in the winter months – particularly from Thanksgiving through mid-January – making right now the optimal time to land that dream home before the flowers come back in bloom and prices start ticking up. Due to lower housing prices and smaller demand, sellers and their realtors are more willing to negotiate to seal the deal as urgency might be a factor the house is on the market during the slow home-buying period.
There’s not much data that supports better mortgage rates during the holiday season, but they’re starting to trend downward since their peak in October 2023. In fact, it’s down a full percentage point on a 30-year fixed mortgage, which translates to four-figure savings compared to just a year ago.
The downstream impact of lower house sales means the cost of moving belongings from one place to another is also a lot more affordable. Moving companies increase their prices during the peak summer season as demand skyrockets and availability becomes far less flexible.
The numbers really add up when moving out of state. According to the “This Old House” moving calculator, a three-bedroom house moving from Los Angeles to Chicago on Saturday, December 7 will cost an estimated $5,000. Take the same exact move but change the date to Saturday, April 5, and that now becomes $8,000. This is also something companies can factor in as they weigh relocation compensation as a method of saving extra money.
Time to settle into a new role
For many companies, the holiday season is a time to prepare for the new year. This gives a fresh transformation leader the time and opportunity to get their feet wet and establish trust from their peers before implementing new changes during a busy season.
Moving from out of state or city is a hectic time. There’s a house to get, new schools for the kids to enroll (we’ll get to that later) and a new culture to embrace – it’s forgivable if work isn’t top of mind quite yet. This time of year does allow a new employee to address the most pressing needs at home while easing into a wind-down period at the office.
This time is a great chance to leverage holiday gatherings to make a good first impression in festive and informal environments. It can take a bit of the pressure off everyone as bringing in new leaders from outside the organization can trigger companywide anxiety and uncertainty. So once the holiday break is over, all the introductions have been made, the onboarding is complete and the anxiety has been extinguished – and all that’s left is to roll up the sleeves and get to work.
Family benefits
Moving a family is among the most stressful and challenging moments in a parent’s life. There’s certainly no easy or best time to do it, but the holiday season has advantages over other times on the calendar.
For school-aged children, they’re typically off from a day or two before Christmas through the new year. Packing and moving is hardly on top of anyone’s list of ways to spend the holiday season, but it does offer a fresh start at the symbolic midpoint of the school year. It’s not as easy as a summer move, but it’s likely preferable to any other time on the calendar as they still have extra days to handle the enrollment process.
While the holiday season is traditionally a time for relaxation and celebration, it also presents a unique window of opportunity for those considering a job change in a new city or state. From the financial advantages of lower housing and relocation costs to the professional benefits of settling into a new role during a quieter business period, the holidays offer a range of compelling reasons to make a career move. By making the move during this period, individuals can position themselves for success and start the new year with renewed purpose and momentum.
Don't Overlook These Aspects of a Video Interview
To ensure a smooth and efficient hiring process, utilizing a webcam for part or all of the interview process can be a game-changing strategy. However, not everyone is equipped to handle the intricacies that come with video interviews. The way you present yourself on platforms like Zoom, Teams or Meet can make all the difference in whether you land the role or leave the candidate feeling unsure about they'd fit in your company.
To make the most of your opportunity when interviewing the A-players, pay attention to the most overlooked aspects of a video call:
Dazzle with proper lighting
That window with a stunning view might seem like a great idea, but only if it's in front of you or behind the camera. Having the light behind you can make you appear too dark, especially if it's brighter than the light in front of you. The same goes for windows or additional light coming from an angle, which can create unflattering shadows. So, prioritize having the best lighting in front of you, even if it means closing a few blinds.
While natural light is ideal, it's not always feasible. Make sure you position lamps and other lights in appropriate places. For rooms with inadequate lighting, experiment with brightness filters available on video platforms like Zoom. For instance, in Zoom's settings, go to Video and enable the "Adjust for low light" option and set it to "auto." This allows Zoom to determine the appropriate adjustments, ensuring you look your best.
Consider your surroundings
Bookshelves have become a popular backdrop during videoconferencing, but they can also lead to unintended consequences. Too many books might come across as self-righteous, and if you sit too close to the shelf, the interviewer might be able to read the titles. If you opt for a bookshelf backdrop, double-check the books for appropriateness. You wouldn't want someone making assumptions about your qualifications based on a book title.
Even if you choose a different backdrop, ensure any wall art you have is suitable for an interview. That hilarious, yet mildly embarrassing photo from your birthday party that lives in your home office might not inspire confidence in your next Vice President.
Our advice is simple: treat your Zoom room as you would an office for an in-person meeting, if they're two different places. If you're comfortable having the interviewee in that room with you, then you're good to go. If you're not, consider using a fake background on your profile to maintain privacy.
Beware of potential distractions
You made sure to lock away the cat and close the blinds to prevent your dog from barking, but there's one thing you forgot: the doorbell. Once it rings, chaos ensues as the animals in the house act like World War III is happening at the front door – and there's nothing you can do to stop it without leaving your computer.
Let's make clear an important point: Most people are understanding. Just be honest and apologize for the disruption; it shouldn't significantly impact the outcome of the interview. However, it's still your responsibility to minimize distractions, just as it is for the person on the other end.
This also applies to family members, plumbers, landscapers and so on. Try your best to eliminate potential distractions or find a quiet space in your home or elsewhere. Even the most understanding employers wouldn't want to remember you as the interviewee whose dog barked incessantly while the landscaper trimmed the hedges.
Dress to impress
During a simple phone interview, you can get away with pajama pants and an oversized t-shirt. An in-person interview typically requires business professional attire. But what about video interviews? Well, that depends on the company. Some are more casual, expecting a short-sleeve collared shirt and jeans, while others maintain a dressed-to-the-nines approach from Monday to Friday. Most companies fall somewhere in between.
It might be tempting to dress professionally on top and wear sweatpants on the bottom during a video call. After all, they won't see anything below your waist, right? Well, there are no guarantees. Even if you plan for every possibility, there's always the unknown of needing to stand up for a moment. If you find yourself in a situation that could reveal your gym shorts, apologize then turn off your camera before getting up from your chair.
Mind your mannerisms
Books have been written about what to do with your hands, but people don’t generally focus on this as intently over a videoconference. Be aware of hand placement when you speak and ensure you’re not inadvertently using them to send the wrong message (e.g., placing your chin on your hand or crossing your arms).