A lot of businesses put their transformation plans on hold due to the uncertainty of the pandemic. Recruiters were unsure how the job market would look as we returned to normality. Then the private sector IR35 reforms came in April 2021, and we patiently waited to see how things panned out.
We first thought that these dual forces would force candidates to accept less favourable offers, with a surplus of people applying to limited positions. A world where employers could make below market offers that would have to be accepted was not out of the realm of possibility. However, what we have in fact witnessed is the opposite – there is a war for talent.
The shift in power
We have noticed that many candidates have multiple offers on the table. When that’s the case, they have the power to dictate their requirements and let clients compete for them instead. Many of our clients have become much more willing to compromise on their offer if it means getting a specific person. At the same time, employers are fighting to retain their best permanent talent. This is great news for in-demand candidates with sought after skills.
Negotiations are taking place much more now than pre-pandemic. Clients could have a long list of specific requirements and not budge until the right person came along. Roles are now being reversed and candidates have more bargaining power than before. But why is this and what does it mean for you?
Why is this happening?
We weren’t sure what or how much impact the private sector IR35 legislation changes would have on the market. Because employers could be fined for getting IR35 determinations wrong, many recruiters expected them to play a cautious game.
However, there are a lot more ‘outside IR35’ roles than we anticipated. This is great for contractors as they have a wider breadth of roles available to them. More opportunity means they aren’t competing over a small pool of jobs.
Another major factor pushing the war for talent is the backlog of change programmes. Many businesses put their transformation objectives on hold over the pandemic for a number of reasons. During the height of the pandemic, this naturally led to an oversupply of candidates. But as companies gain confidence, neglected programmes are now being invested in to drive competitive advantage.
Those who kickstart their transformation first and have the right people on board will be better placed to run successful programmes. Soft skills have become much more important too, driven by a need to drive everything from business change and successful programme delivery through to business as usual. All companies want the best people to lead their programme, so good candidates will have multiple offers and have the ability to be more considered as to which opportunity they select.
What do employers need to do?
Thankfully, there is something that employers can do to restore some balance. The best way companies can become more attractive is to improve their offering. It’s simple: more competition means clients must be willing to negotiate or provide a better package.
Employers need to stand out, but for the right reasons. A candidate with multiple offers will want to whittle the list down, so companies need to make sure there are no big disparities between their offering and others. A good way to get a feel for the standard is to look into a competitor’s job listings.
The pandemic highlighted the need for a stronger overall offering. It’s important that businesses think about additional benefits that aren’t just financial. Financial incentives definitely still hold influence, but other things could be much more attractive.
Standing out from the crowd
Contractors are looking more than ever for roles with high levels of job satisfaction. There are so many factors that play into that. Of course, mental health has been a big talking point of late, so showing a willingness to accommodate that will be powerful. It could be in the form of Mental Health First Aiders, subsidised counselling or social activities. In the same way, flexible or remote working arrangements can be very attractive to candidates who want to spend more time at home.
Candidates for permanent roles will similarly be looking at a broader spectrum of factors. Is there opportunity to grow within the organisation? Will they have a lot of influence within the business? Even a smooth onboarding process can sway someone with multiple offers to choose from. Things of this nature, alongside traditional benefits, could be what keeps a person in their job or lures them towards another company.
It comes down to treating candidates well and facilitating a conversation rather than standing by strict demands. People value being listened to and treated with respect. Fail to do that and you could lose out on the best people.
What does the future hold?
It’s hard to say for sure whether this phenomenon will be long-lasting or if the fading effects of the pandemic will rebalance the status quo. It will be difficult to erase some of the topics that were spotlighted during lockdowns though. For example, flexible working is likely here to stay, many organisations are enjoying its benefits just as employees are.
There may have been a big enough shift in the priorities of employees around the nation that they will continue to demand better offerings from employers. If that’s the case, then it’s up to employers to really focus on their Employee Brand proposition, or risk losing out on securing top talent.