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Navigating the Supply and Demand Conundrum in Recruiting
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As the U.S. economy recovers, companies are now hiring at record volumes. Great news for recruiters, right? Well, not quite.
Recent data shows that while there is a plethora of job openings — nearly 29% more in June than the pre-pandemic baseline — the number of job-seekers is still historically low.
So what’s causing this “perfect storm” in recruiting? The problem is two-fold.
First, as we experience the fastest economic growth we’ve seen in nearly 50 years, the demand for workers is exploding. Industries that experienced massive layoffs or needed to significantly reduce employee hours — such as retail and hospitality — are now ramping back up. And companies that were conservative during the last year in terms of growth and hiring are now eager to emerge from the pandemic stronger than ever.
Second, despite improving since the beginning of the year, job-seeker activity is, from a historical context, down 25%. And not only that, there’s significant churn among the employed as quit rates are up (retail, for example, is up 50%). This is due to a number of factors, including Covid-related sickness, care concerns (children, elderly, etc.), and a general desire not to want to join the workforce.
Some may point to unemployment benefits as the culprit for the lack of willing workers. However, preliminary Appcast research from June found that states that suspended those benefits actually saw a decline in apply rates, highlighting just another facet of this unpredictable market!
For recruiters, the combination of these trends is creating a massive race for talent. Below are some ways to help meet hiring goals in today’s hypercompetitive landscape.
According to Appcast data, employers can boost apply rates by over 240% if the application process is under five minutes. To optimize conversion rates, employers should omit unnecessary questions or requirements during the first phase of engagement, or at least wait until candidates are further along in the hiring funnel before asking more questions.
For example, removing a resume-upload option or making it optional can go a long way toward reducing friction, particularly given the continued rise in job-seekers applying for jobs on mobile devices.
Another example would be questions with text boxes that require a certain amount of characters to answer a question. Instances of this may include asking an applicant to manually describe their work history (especially if you already require a resume upload) or asking longer-form questions that would prove more fruitful if asked during a screening interview.
A long list of questions is cumbersome and adds friction. Employers should not take a “survival of the fittest” approach to apply processes — instead of weeding out poor candidates, they’ll likely lose good ones. Additionally, to streamline the recruiting process, hiring pros should move “filtering” tools (think: assessments and references) further down the funnel.
Job titles are how job sites index jobs and, in many ways, decide which jobs to show. Research shows that shorter job titles (between one and three words) garner more clicks per job (2.68) and a higher apply rate (6.22%).
Why? The answer is simple: Using terms and descriptions that people and search engines understand tends to work better.
To increase the volume of clicks and applies, recruiters should update postings to ensure job titles align with candidate behavior and implement a process for testing different titles for different roles and functions, as not all jobs perform the same.
While managing job postings is already somewhat daunting, technology can help to optimize the distribution of postings. In particular, it can help you support and improve how postings perform — such as by showing which job titles resonate with which job-seekers in which locations.
Most medium- to large-sized organizations have historically purchased job postings on two to three job sites, which doesn’t cut it in today’s hypercompetitive hiring landscape. To ensure job ads reach candidates where they work, live, and hang out online, consider casting a wider net.
Job distribution tools can strategically target qualified candidates across thousands of sites, creating one big easy button for employers. For example, a job ad exchange allows hiring organizations to use one tool to advertise their open positions across thousands of job, consumer, niche, and social sites. Much like a mutual fund, with a job ad exchange you are diversified, and you get quality candidates because of the depth and breadth of your job ad reach. When layered with programmatic technology (which many job ad exchanges are!), you also get the best possible price, reflective of the market, the region, and the job itself.
This may seem obvious but a lot has changed over the last year. Therefore, reviewing compensation to ensure it aligns with today’s tight labor market is a must.
Compensating employees well is especially important for in-person job functions, particularly in a time when “going to work” involves a lot more than watercooler talk and conference-room strategy sessions. We’re already seeing this trend with big corporations like Amazon, Costco, and Target, which have all recently raised minimum wages to attract talent.
To ensure compensation is competitive, employers should run searches on the major job boards and keep an eye on what their competitors are paying. It’s also key to ensure job opportunities stack up to those of other talent competitors in terms of wages, benefits, etc.
After a year of working from home, expecting workers to return to an office full-time may not bode well for employers of a large portion of the workforce. In fact, a recent survey shows that post-pandemic only 14% of U.S. employees would prefer to work completely on-site.
Instead of hiring locally, employers should capitalize on the opportunity to recruit remote workers for roles that can be done off-site. When location is no longer a barrier, employers can explore a whole new world of talent possibilities.
This year has brought about some truly unique supply and demand trends in the labor market. While every jobs report seems to show that the labor market is bouncing back, the state of U.S. employment is far more complicated than it appears. There are a number of variables that impact today’s recruitment and hiring landscape, everything from the economy to candidate supply to public policy to demand and competition for candidates. And these variables are constantly shifting.
While it’s true that many of these shifting variables are out of your control, there are also many that are within your control! Starting with a careful review and update of recruiting and application processes and workplace policies can be incredibly impactful on recruiting outcomes, particularly when prioritized in the face of a challenging hiring market.