Anybody who’s been a recruiter for any length of time knows that the economy and the employment marketplace ultimately dictate the amount of success that you can enjoy within the profession.
When the economy is good (like it is right now), job orders are flowing. As a result, placements checks are typically also flowing.
When the economy is not good (like it was during the Great Recession), job orders are NOT flowing. And neither are placement checks, for that matter.
But times are good right now, both for the economy and for recruiters. However, times are really good for candidates. In fact, they’re so good that we are deep in the midst of what is called a candidates’ market.
A candidates’ market doesn’t happen only because the economy is good. That just means job orders are (more or less) plentiful. No, for a candidates’ market to occur, you also need a scarcity of high-quality candidates.
Rules for a candidates’ market
When you have an abundance of job orders and a scarcity of candidates, then you have a candidates’ market. There are a few ground rules that govern a candidates’ market. Those ground rules are as follows:
- All job seekers and candidates have more employment opportunities and professional options.
- The best job seekers and candidates have the most employment opportunities and professional options.
- The best job seekers and candidates have the best employment opportunities and professional options.
If it sounds like top candidates have all of the leverage, that’s because they do.
Basically, this is the Law of Supply and Demand. When something is in high demand and there is a low supply of it, then that something becomes incredibly valuable. In a candidates’ market, top candidates are in high demand, but there is a low supply of them.
Therefore, top candidates become incredibly valuable. But unlike other things that are involved in the Law of Supply and Demand—like wheat, for instance—top candidates are self-aware. In other words, they know that they’re valuable. (I, for one, am glad that wheat is not self-aware.)
And when you have something that’s high in demand and low in supply and knows that’s the case, it can complicate the business dealings surrounding that something.
There is a general and overall lack of high-quality candidates in the employment marketplace at the moment. However, the scarcity of these candidates is even greater in some industries and niches. In some niches, employers are starving for the talent they want and need. (Although not literally starving. That would be doubly unfortunate.)
Unique aspects of this candidates’ market
One of the unique aspects of this current candidates’ market is the presence of long-term trends associated with it, namely the following:
- The skills gap that exists in the country—There are currently over 6 million open positions in the United States right now, many with skill sets and requirements that can’t be adequately met with the current workforce.
- The retirement of the Baby Boomer Generation—According to the Pew Research Center, Baby Boomers are reaching retirement age at the pace of roughly 10,000 every single day.
When you put those two trends together, you realize that there will continue to be a tremendous shortage of candidates in the market. In fact, the shortage could become even more pronounced in the years ahead, especially considering the rate at which the Baby Boomers are retiring.
So what are the far-reaching implications of this candidates’ market?
- It could last for years to come.
- The shortage of high-quality candidates could become more severe.
- Methods for sourcing candidates will become even more important.
- The fact that top candidates know they’re in short supply could complicate the negotiation process for employers and their recruiters.
- Hiring managers and employers could continue to be slow in reacting to current marketplace conditions, resulting in lost hiring opportunities.
Sure, a candidates’ market is far better than a down economy. However, it presents plenty of challenges of its own. Only those recruiters who are able to meet and overcome those challenges are the ones who will benefit the most from what this market offers.