Rob Fisher is Managing Director at Newcastle-under-Lyme-based consultancy firm Strategi Solutions. Here he looks at why the recruitment balance of power is in flux and why it means strategic HR is a must for business success.
When I cast my mind back to before the pandemic began, the job market operated in a very different way.
As lockdown was announced and organisations responded to the situation in their own individual way, we saw many businesses have great success and, also sadly, many businesses close. As lockdown started to ease and rules were relaxed, I vividly remember a very tangible change in the job market.
As furlough was introduced and weekly announcements were made by the Government regarding changes, HR professionals had a platform to really show what a strategically important function they perform and that HR should be operating at board level.
Good strategic HR support really helped navigate organisations through this unknown turbulent time. Whilst this was fantastic for the profession, I remember, all of a sudden, that business started to face a significant recruitment challenge.
This was the tangible change. It suddenly seemed that every phone call, email, meeting, networking event, I was being asked how to deal with this issue. This wasn’t just business, I had friends, friends of friends, strangers all reaching out to me for advice.
My opinion is that there were a number of reasons culminating in the recruitment challenge: firstly, we hadn’t seen the true effects of Brexit, we didn’t know what the fallout would be from the pandemic but we also had a significant period of time without the hospitality industry.
We often see a pattern whereby someone starts their career in hospitality and that becomes the foundation of their career. We suddenly had two years where these entry level jobs weren’t been filled and the knock-on effect of this with other careers created a huge challenge.
All of this meant there was a big swing of the pendulum with the balance of power between employers and candidates. Whilst negotiation is always key to filling a role, candidates suddenly had more bargaining power than ever before and this changed people’s mindsets.
After reading an article in the Telegraph last week summarising some research collected by KPMG, I reflected on how this might change the balance of power.
This research suggests that the current soaring interest rates are now affecting the job market with many employers becoming increasingly cautious in recruiting new staff and that we are now seeing hiring falling at its fastest pace for three years.
In line with permanent recruitment, temporary recruitment also fell for the first time since July 2020 suggesting that these affects are hitting many sectors across the UK.
As firms start to slow down their recruitment strategy and candidates start to become more cautious, it will be very interesting to see if we see the balance of power change again and where that will settle in the months ahead. Perhaps, this will create a new norm where negotiation becomes even more important in the recruitment process.
It will be even more important that employers recognise that talent is protected and nurtured within their organisation. I have always seen the importance of growing your own talent but this multidimensional model will need to be carefully considered.
This new challenge will further show the importance of strategic HR and may be the key factor in whether a business succeeds.