AUTHOR: David M. Young – Managing Partner Search Technology
Is this a candidate market or an employer market? We hear this question daily. The short answer is … proceed with caution… it’s neither a candidate nor employer market.
In speaking with our clients, feedback has been that the Houston economy has been impacted by the economy, the drilling moratorium, and most recently somewhat of a pause to understand the overall impact of legislation coming out of Washington DC. Companies have trimmed their workforces over the past two years to absorb the impacts of the economic slowdown. This has resulted in “pent up demand” for technology projects and in the third quarter of 2010, we started seeing companies move forward with these projects. Companies are looking at hiring permanent employees, but in many cases, they are hiring short term contractors to bring the necessary skills to the table in order to complete these projects. Staffing Industry Analyst, a national staffing research organization, has reported that nationally, companies have responded by increasing their contract workforce to the tune of a 32% increase year over year from August 2009 to August 2010.
Houston was slower than the rest of the country to absorb the effects of the recession but the prudent executives across Houston still trimmed their teams and instituted strategies to limit the impact of the downturn. There are a number of companies in town who "laid off" employees and instituted hiring freezes. High-performing technologists were the last people laid off. They were last out the door due to the fact that they are the ones maintaining enterprise systems, driving strategic projects, and are the lifeline to the information needed to assess the organizations’ health. Conversely, there are strong candidates that are looking because they were working on non-essential projects, were part of underperforming divisions that have uncertain futures or are worried about the health of the company based on how it responded to the downturn. But does this mean there are a bounty of candidates and thus an employer market? No, there are not nearly as many strong candidates as you might think.
Currently, we see a problem with the perception of the market. Employers may believe there are an abundance of qualified/free people on the market. An increase in the quantity of candidates does not translate to an increase in the quality of candidates. Just because a candidate sees fewer opportunities due to the ramifications of the slowdown does not mean there are more qualified candidates from which to choose. Why?
Great people are always hard to find. Why is it tough in this market? Candidates are concerned about the long term viability and financial stability of a prospective company and the long term value of changing jobs. While many great candidates have been part of divisional cuts, many more underperformers were the first to be let go. Candidates want to work, but great candidates want careers.
Overall, the best way to characterize this market is one of Caution. Employers that have openings are being overwhelmed with resumes. This can result in that great candidate hidden in a pile of resumes. Many companies are still on “hiring freezes”. This may be a great strategy for the bottom line but the soft cost of straining employees due to longer hours and additional responsibilities can be detrimental to your human capital. The end result will be an exodus of your valued assets.
The best advice we can offer an employer is to treat employees well, especially as you assess your needs in 2011. Listen to them. Be proactive about their retention instead of reacting when they express concerns. Have a long-term outlook because the market is projected to return. Take the time to keep the right people, and when you are hiring, be ready to invest the time to find the right people.