Something amazing is happening to the labour market. Seismic forces have been stirring for the past few years: huge shifts that those of us on the ground have felt coming for some time.
These changes are going to mean much, much more than just simple disruption to the way the nation hires. The landscape has shifted totally – and there’s no turning back.
There is no doubt that the market as a whole is experiencing a dire shortage of good talent. Just in the support sector, for example, 376,000 new administrative jobs were created in the UK over the past five years, according to figures released by The Times, and labour market tightness is at record levels.
At Sidekicks, we’ve written a lot about why this is happening, and what it means for the future of business. We’ve written a lot about how we as recruiters have adapted the way we work to navigate this market on behalf of our employers: we’ve talked about how we ensure that we use our contacts and proactive tools such as market mapping to deliver the best talent for the businesses we work with, despite competition being at record levels.
But what I want to cover today is what you can be doing to ensure that you are able to hire the talent you need to grow and scale your business.
And that starts with understanding the deep forces at work that are changing the very fabric of the way we hire.
What is this massive change?
Put simply, it’s a generational shift that is very shortly going to be keenly felt right across the global landscape.
So: to set the scene. The youngest of the generation we know as the Baby Boomers are now in their mid-fifties, and the oldest are retiring. With their departure from the workforce, many of the rituals and habits that have shaped our jobs market for decades are heading out with them.
Whilst Gen X broadly maintained the status quo of this materially aspirational post-war generation, now we’re beginning to see the millennials moving in to positions of strategic power. And it’s immediately clear that having a very different demographic in the driving seat of UK business is altering the fundamental tenets underpinning both the way we hire, and the way we find jobs.
I speak from experience: I am a millennial, and also an employer. I own a recruitment agency so I see the data first hand, every day, and hear the whispers.
I don’t think it’s surprising at all that one of the first places we began to see big changes to attitudes was in the administrative recruitment market. Due to the cross industry presence and extremely wide candidate demographic of this historically overlooked but enormous market, trends are often felt strongly here in the form of an initial tremor before they register fully in the labour market as a whole.
This means that organisations such as ours can and should be ensuring that we add extra value to our clients by spotting and reporting trends, and recommending strategies to deal with them before they grip the market as a whole.
So, what’s happening?
To put it simply: at the front line of jobs, the balance of control has now shifted past tipping point.
Employers run the risk of no longer feeling in control of who, how and when they hire, but instead being forced to shift to a more reactive model (“we’ll snap up good talent when it becomes available and create space”). This might work well for larger organisations, but – and I speak from experience – it is a strategic nightmare for SMEs.
Traditional ways of reaching talent are rapidly becoming obsolete. In 2003, how would a hiring manager have recruited? This was before Google for Jobs. Before social. Before piles of AdWords data. Before LinkedIn became what it is today.
Hiring managers would have largely relied on advertising: putting up an advert for their job on a jobs board, or in the newspaper, then sitting back and relying on prospective hires to 1. See the ad. 2. Apply to it.
This does not work any more.
(As an aside: this is why we are seeing so many internal talent acquisition professionals who learned their trade in the late ‘90s and early ‘00s having to suddenly make major adjustments to the way they have always done things. It’s not simply a case of casting their net wider: it’s that they are fishing in the wrong pond altogether).
Recruitment now is a whole different ball game (and going into the detail of how we map talent in a passive market requires a whole different article!) but – in a nutshell: Millennial talent can’t be captured: it has to be attracted.
Why is this happening?
So: we know that traditional, tried-and-tested methods of reaching candidates (in every market, not just administrative) are beginning to suddenly stop working, which obviously feels discombobulating for those doing the recruiting.
A lot of businesses are putting their failure to attract the right people down to the general tightness in the market fuelled by economic uncertainty, slow wage growth and of course the the UK’s impending exit from the European Union.
However, the market is simply exacerbating a much, much deeper trend, and any business that believes this is a temporary shift is – in my opinion – mistaken.
Not for the first time, economic factors are masking the depth and severity of a new market trend.
I am very concerned on behalf of a lot of UK employers (particularly SME’s) because I suspect there are an enormous number of businesses who have not yet grasped the truth: that these conditions are here to stay, and they are only going to intensify over the coming few years.
So: if it’s not a tight labour market making it difficult to hire: what is it?
So we have ascertained that we are experiencing a significant shortage of candidates, and that we can’t solely blame the economy: so why is this happening?
The answer is that the core driver for the deep changes we are seeing is a fundamental shift in the attitudes, expectations and aspirations of the workforce.
There are many socioeconomic factors for this change in attitudes. The good news is that if we can grasp these, our path to hiring the people we want (the next generation) is made clear to us. It’s the first rule of marketing, isn’t it? Know your target market.
Well, it’s exactly the same in talent attraction. Know your target market. And given the fact that we are in 2019, thus an extremely large proportion of the people we are trying to reach are all millennials – that is a key group that we need to be focusing on to ensure that our businesses are attracting the resources they need to stay viable and current.
So, here are some pointers for you.
What do – and don’t – millennials care about?
1. It’s not just about the money.
It’s not 2007 any more. Post crisis, money is often – at least outwardly – a dirty word to millennials (and this trend will only exacerbate with Gen Z, by the way).
A lot of what we’re seeing is my generation and the upcoming one rebelling – without even realising it – against traditional aspirations of work. Our generation have suddenly decided that we’re not going to play ball.
Let me set the scene: all their lives, millennials have been told to work hard at school and go to university so that they can ‘get a good job’. Those who went to university then found themselves graduating heavily in debt – on average, to the staggering tune of £57K – so flung themselves straight into the treadmill of work to try to begin to pay it back.
However, at some point (typically, it’s when someone of this generation starts to earn a good salary – say £40-£50K) the hamster wheel falters, because the penny drops, and the person realises that the dream they were sold doesn’t actually exist in the form they imagined.
It’s a bit of a shocker, isn’t it? But it’s happening, all over the country. The formula doesn’t work any longer. Those of us in our twenties and early thirties are not attracted to the idea of working ourselves to the bone in order to secure a personal debt mountain of half a million pounds to buy a one-bedroom flat in Clapham so that its baby boomer owners can retire, downsize and ‘release the equity’ from their ‘investment’.
“What’s in it for us?” my generation are saying. “We’re not playing this game any more – sorry, we’re out.”
This has resulted in several things. Not just micro trends, such as the well documented rise in portfolio careers, or the huge number of millennials starting their own business rather than opt for paid employment.
The macro trend here is symbolic of a huge culture shift, leaving British employers with an urgent call to action.
If the problem of talent attraction can’t be fixed by throwing money at it – if the people you desperately need to continue to power the growth of your business cite money as their least important driver – we need to work out what does attract them, and we need to do this fast.
2. Reputation matters. Culture matters.
Therefore, if I could pick two things for you to focus on right now to de-risk your SME’s current and future hiring potential, those things would be your business’ external reputation and internal culture.
Now – because it’s 2019, what we realise is that reputation actually means image.
Thus, your business’ reputation is something that is built by the way you portray yourself: it’s the way you carry yourself as a business, it’s the sum of the actions you take and the way you speak to the wider market: it’s how others perceive you.
This doesn’t have to be a shot in the dark: as most successful brands know, this is something you can influence, something you can absolutely control. It’s called employer branding.
There is an awful lot I could say about employer branding: how to do it successfully, why it matters, which of our employers actively do it and which don’t – and what that means for their hiring and retention rates (and ultimately, their bottom line).
But for now I’ll keep it short and just tell you that if you want to hire the best millennial talent, your employer brand really matters. This is a generation that is accustomed to swiping right on Tinder, where potential dates and friends are vetted on Instagram so that their life and beliefs can be assessed and measured before any form of actual contact is made.
All your own media needs to be subtly screaming about your business’ reputation; your ethics, your values. Your Glassdoor needs to be immaculate; your CSR offering must be super clear (millennials REALLY care about CSR. It’s basically advertising your ethics but this is no time to be coy). Your Google reviews must not be neglected, your careers page and social need to be engaging and underscore your core message.
There are lots of places you can go for help creating and refreshing your employer brand. If you have an in house or retained HR or Talent team, they need to be actively working with your marketing department to make sure that they have this nailed. (If you don’t have a team in house and you need help with this, just drop me a line).
Whichever way you go about it, though – whether people want to work for you because they love the way they are guided through the attraction and interview process, because they love the ease of the jobs matching on your own website, because they understand your values and USPs as an employer – we need to help the market see that your company is a great place to work.
THAT’S what matters to millennials. Danger money is dead: we’re not into selling our souls any more.
So: we know that a Notting Hill townhouse isn’t the key aspirational driver for the next generation, and that meaningful work IS.
Your employer branding will help you attract the right people, but to get them to stay with you and build your profits, you need to retain them. That’s where your culture comes in.
A couple of easy pointers for building a cool culture (again, if you want more help around this, talk to me).
Firstly, give your people flexibility. The rise of technology in the workplace has made at least occasional remote working a no-brainer. We have to accept that millennials have a greatly increased expectation of flexibility, and if they don’t get it with their current employer they can and will go elsewhere.
Amongst millennials, the concept of the job for life is practically non-existent. The attitude – prevalent amongst older generations – of ‘job equals security’ has all but gone, and it’s important that business owners understand that the traditional motivations of the millennial generation have shifted.
Think about it: millennials don’t NEED stability so that they know they can pay the mortgage for the next fifty years. The average house price in London is £473,609 (Source: Savills). The median gross annual wage for people working in inner London is £34,473 (source: ONS).
A growing number of millennials have accepted that they are not going to be buying anything in the near future, if at all. Renting is the only way forward, and this flexible attitude towards homes extends to work life. If someone is accustomed to changing where they live every year or so, why not change their job too?
This is why flexibility is so important: you need to attract this talent, so you need to understand their pain, and offer what they value.
I am not intimating that you need to go the whole Sidekicks hog (our team all work from home every Friday, for example) but even little things help a lot. Can you take a look at your working hours? Do they have to be set in stone? Can you revisit your parental leave and holiday offering? Seemingly tiny things like the language you use in internal benefits communications has a huge effect on culture.
The reason that flexibility is so high up on the priority list is that, by giving your people flexibility, you are demonstrating something incredibly important to this next generation of jobseekers: loyalty, and trust.
In summary, then: the emerging majority workforce cannot be attracted and retained by salary alone.
If you want to compete for the best talent for your business, companies must brand themselves as ethical employers with a great culture. You must demonstrate a commitment to flexibility and ‘soft’ (but meaningful) rewards.
This set of tenets must extend to your hiring practices as well, at a very basic level. Put simply, the employers who are losing out right now are the ones who aren’t selling to candidates: the ones who drag out a two or three stage interview process across a month, and then offer an interview consisting of a hiring manager talking through the job spec for half an hour. These companies are the ones right now wondering why their offers keep getting rejected.
It’s not all doom and gloom: what this means is that for the brave employers – the ones who recognise the value of tapping into this market, the ones who understand that in order for their business to be here and profitable in ten, twenty years’ time, they need to be attracting the next generation of trailblazers right now – these companies will be the winners.
These will be the businesses of the future, the ones that flourish and fuel our economy and become the success stories of the next decade. By taking action now, you can make sure that your business numbers amongst them.
If you want to give my any feedback or you want to ask my opinion on how to get your business where it needs to be – please get in touch. I’d love to hear from you.
About the Author
Jessica Marchant is Founding Partner at Sidekicks, the leading London operations search firm.
She is a Corporate Director of the The Recruitment & Employment Confederation, the professional body for the recruitment industry.
She is the Founder of Work To Recover – the mental health support nonprofit dedicated to facilitating people back into meaningful, fulfilling employment, and the author of job seeking manual ‘How To Get A Job’.