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The Coin Flip Labor Market
Congratulations! After a 6-week interview process involving many prospective candidates, internal employees and a search firm partner, the offer you’ve extended to your perfect candidate was accepted. Now, what do you do next? Connect the candidate with HR to start the new-hire paperwork? Set up their office / work station and internal email? Nope. The very first thing you should do is flip a coin, because the result will come close to predicting if the candidate will actually start the job with your company in two weeks.
Over the past three months, as a test, in every conversation I have with an executive (typically a CFO) where I want to give our firm’s and my perspective of how tight the current labor market is, I bring up the coin flip scenario. More than half the times (I’d guess about 60-70% of the time), this is the typical response…”that just happened to me!”. The conversation continues and the next comments became predictable: the candidate accepted a counter-offer from their current employer, the candidate received another offer from another company they were also interviewing with, etc.
To make matters worse, here is another response I’ve heard multiple times…the candidate did start after their two-week notice period, but left only a week or two later because the meaningful counter offer came later than expected and/or the more lucrative offer came from another company and was too attractive to pass up, despite the bad look of having a start/stop with a new employer.
Crazy times for sure, but, unfortunately, this is the current reality of today’s labor market where there is fierce demand and unprecedented competition for talent. And, believe me, the counter offers we see are significant and, clearly from the candidate’s perspective, very hard to ignore. Yes, the reasons for changing jobs (outside of money) will never really go away and the candidate will likely get back to the same spot in the future of the reasons for wanting to make a change, but how do you turn away a 20-30-40% increase in compensation in your current job, oftentimes with very little change in responsibility?
For sure this labor market will shift and not be so tilted in the employee’s favor, but when that will happen is anyone’s guess. Our simple advice to clients at the moment is to ensure you have a swift interview process with a particular focus on inspiring candidates in terms of the opportunity, the company and it’s vision for the future and be prepared to make fair and competitive offers. Also, keep recruiting after the acceptance and up until the time the candidate starts with your company. During the notice period, several employees should stay in touch with the candidate, reinforcing the excitement of them coming on board. This should be planned and coordinated. Keep them informed of company activity during the bridge period that would be of interest (i.e., landing a new key customer, other new hires, sharing fresh news that may have been publicly disseminated which may not be immediately noticed by your candidate, etc.). Invite them to company events, happy hours, etc. Give them a feeling of being dialed in before they actually start.
Good luck out there. Also, you may be comforted to know there are many websites and blogs on the internet you can easily search which give advice on how to get a coin to flip in your favor!