The market is booming. Job numbers are back up to and surging past pre-Covid levels. In a recent article, the Evening Standard spoke of “a ‘roaring Twenties’ bounce back from the Covid destruction to the jobs market”.
Oakleaf Partnership’s job numbers have increased 232% since January and 147% since the start of the financial year. Demand for HR, Reward and Payroll specialists is soaring. The demand for recruiters has rarely been higher.
It has probably never been a better time to be a recruiter. However, the specialists responsible for planning and transacting these ambitious hiring plans, are scarcely to be found. Why?
With lockdown last year came recruitment freezes. Business and cost saving strategies were swiftly implemented. No-one was hiring, so where was the need to retain recruiting talent? Now the shutters are up, and Britain is open for business, everyone is hiring. Teams that had been decimated by cost-saving now need to be replenished, and expanded further as these firms, surfing a new wave of optimism, are planning additional growth, and with it, a need for more headcount. Many organisations effectively have two years’ worth of headcount to hire.
Huge demand
Unsurprisingly, professional services firms could see the end in sight and were amongst the quickest to react accordingly. Demand to hire in fee-earning and support functions rocketed, a result of both backlog of headcount for the previous year and a desire to pursue aggressive growth strategies.
In the commerce and industry sector, our clients are currently experiencing extremely high demand for recruiters, who are seeking considerable salary increases. Candidates are being very selective about where they want to go and which brands, they want to work with. Given the nature of the current, highly driven candidate market, they can afford to be.
The pursuit of tech recruiters continues, although tech start up businesses are recruiting more general recruiters currently, with higher demand falling more in the scheduling, co-ordination, and research roles.
Within the financial services sector, a number of smaller private equity, asset management firms and mid-size investment banks are building out their talent acquisition functions. Firms are open to agency recruiters who can source directly and headhunt. During lockdown, many recruitment consultants took the opportunity to make the move in-house. Commission dropped and it was an opportune time to change jobs without adversely affecting incomes. Now the markets are thriving, commission is flowing back in and tempting recruiters out of agency is a much more expensive proposition. Factoring in current or future earnings from commission has been a huge factor in driving up salaries.
In a May 2021 report by IHS Markit, Annabel Geddes highlights a UK Report on Jobs data compiled by IHS Markit on behalf of KPMG and REC, stating that UK hiring activity is at a 23-year high. This also “pointed to a renewed decline in total candidate availability after a period of rapid redundancy-related expansion, which has pushed up rates of starting pay.”
Pressure on recruitment teams
Recruiters are swamped and teams are under pressure.
Recruitment managers are trying to balance high job volumes, manage client expectations within their firms and investigate projects to support growth strategy as firms are keen to recoup money lost last year.
The Big 4 firms cut numbers in their RPO teams and increased pressure to source directly, but struggled with sheer volumes, managing specialist roles across different teams.
We have moved, positively, into a flexible working culture where people are able to work from home more. This gives people more time and opportunity to talk to their recruiter, and in a time where furlough and redundancies have heightened anxiety amongst some looking for their next role, everyone wants feedback. In addition to a heightened workload, this means less time for recruiters to proactively look for opportunities and less flexibility to make interviews.
A reluctance to move roles
Businesses are doing their best to retain top talent.
In the financial services sector, junior recruiters, often tempted to move by feelings of stagnation and limited career development, are increasingly being given project work around growth hiring plans, retention models and initiatives around diversity, inclusion, and wellbeing. Their roles have become much less reactive, giving them less reason, and time, to look elsewhere.
You now need to pay good money to land your chosen candidate as the availability of top talent is scarce and people do not want to leave roles where they are being looked after.
Some big brands in commerce and industry have been consolidating the top tiers of their senior leadership population. We have seen most requirements at junior to mid-levels, up to £90k salary level, with very few opportunities above this. Some firms have explored combining recruitment with broader learning and talent roles. A head of talent acquisition within a leading commerce business commented: “While they are happy in current roles, there is a concern amongst senior recruitment professionals at the £90-£120k level as to where their next opportunity might sit.”
Increase flexibility of hiring
In such a candidate driven market, clients offering more flexibility have a more successful chance of securing their preferred candidate, or in this climate, second or third, given that many candidates are in numerous processes and fielding multiple offers.
In professional services, reassuringly, the larger firms are more flexible on background, broadening the talent pool that has historically been quite narrow. Frustratingly, many smaller firms remain insistent on similar backgrounds, particularly at advisor level and while referral schemes are popular, these continue to bring in many like-for-like individuals, diversity of hiring remaining a challenge.
In many firms, time to hire remains slow. Longer processes run the risk of losing good talent to competitors who are comparatively more agile and flexible with their time to hire. There has been a drive to encourage clients to move more urgently with decisions and manage expectations in the current, highly candidate-driven market conditions.
Temp solution?
The recruitment industry is as busy as it has ever been, with pressure from all sides to hire. The majority of in-house talent typically originates in agency, and the pipeline of talent is scarcer than ever. Given the uncertainty of the previous twelve months, there has been a significant preference for permanent work. Our financial services clients have a high proportion of permanent roles with a struggle to find immediately available candidates.
There are lots of temp to perm recruitment roles available within the commerce and industry sectors. Clients here have a preference to bring recruiters with immediate or short-term availability in for fixed term contracts initially with a view to permanent hire, whereas candidates want the flexibility of day rate pay initially.
In professional services, transactional volumes are through the roof. Openness to considering temporary solutions is bucking a historic trend. We are seeing a much more positive response to day rate options, which is opening the talent pool and market.
With candidates currently in permanent roles and fixed term contracts on longer notice periods, day rate candidates can offer a quick, flexible solution. Immediately available top talent typically prefer to operate with the flexibility of a day rate contract. They are typically more delivery and outcome focused.
We are finding it challenging too. With high job numbers and exciting growth plans, we are keen to talk to good recruiters and learning that flexibility in our hiring process will help us find the right people.
Please do reach out to our specialist consultants if you would like to discuss support and a flexible solution to your hiring plans.