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Employers: get ready for the talent surplus

June 2, 2020
Employers: get ready for the talent surplus

Fixating on the ‘talent shortage’ has always been unhelpful.Rising unemployment may finally kick employers into gear.How will your company capitalise on the talent surplus?If your answer to that is, ‘what talent surplus?’, it’s not too late. But you have some catching up to do.The most desirable employers have been hoovering up talent, in recent weeks, as a wave of Covid-related redundancies injects some much-needed liquidity into the jobs market. This may not be a short-term shock. The Economist argues that ‘The new normal will have higher joblessness’ in most industries[i].This should be good news for talent teams, but in reality, most employers are woefully ill-equipped for this ‘new normal’.After 8 years of falling unemployment, the entire talent ecosystem is currently calibrated a candidates’ market: where the employer is powerless, where jobseekers are ‘passive’, and where the recruitment agency database is the only way to recruit for the skills you need.This logic no longer applies.Far from being powerless, employers can be highly effective at acquiring talent. The thinking and the tools needed to do the same at your business are more accessible and affordable than ever before.Even if The Economist turns out to be wrong, and employment swiftly rebounds, the shock of short-term blip will bring the deficiencies of modern corporate recruitment into sharp focus.Professionals worldwide – and not just furloughed and redundant ones – are using the opportunity of downtime to proactively seek out new opportunities.It would be a gross oversight for employers not to do the same.

Out with the old

The idea that talent is difficult to hire, or that jobseekers are ‘passive’, was a universally accepted truth.The scarcity of talent was a truth indeed. Until March this year, the UK was as close to full employment as it’s been in recent memory. It was a candidates’ market[ii].But, like many universally truths, the ‘talent shortage’ adage came with a lot of expensive baggage, of questionable veracity.

It was certainly true that the workforce wasn’t looking. It was also true that this made them difficult to reach, and that recruitment agencies alleviated that problem.But does that mean prospective employees couldn’t be reached? – and does the business world really need three new agencies to open every day?This graph shows new recruitment agency registrations since the 2008 financial crisis[iii]. It’s almost a mirror image of the unemployment figures.Talent outsourcing became the default.

Despite the snowballing costs of agencies, efforts to recruit independently were usually underfunded, half-baked, and prone to becoming scrapped in favour of easy, expensive, outsourced talent acquisition.The cost, and the idea that the cost was unavoidable, became part of the universally accepted truth.Of course, the silver lining to crises or shocks is that they throw ‘truths’ such as these out into the open, and force a rethink.For comparison, consider another universally accepted truth: that a professional organisation needed a fixed workplace.This is partly true; businesses do need offices. The benefits of home working ‘…look likely to be heavily outweighed by drawbacks.’And studies suggest the benefits of working from home only materialise if employees can frequently check in at an office in order to solve problems. Stanford University's Nick Bloom, who has studied working from home, reckons that there will be a sharp decline in patent applications in 2021[iv].But businesses have also discovered they need far less square footage than they’ve been paying for, for the last century.Universally accepted truths, when they are blindly adhered to,  create as many problems as they solve.The ‘talent shortage’ truth has been just as costly. But it now seems a far less pertinent concern.Unemployment in the UK almost doubled in April, and a depression lasting several years is widely accepted to be the most likely outcome of the pandemic.Employers must adapt their approach for this altered state of play.

Talent awakens: an opportunity for in-house recruitment teams

Make no mistake: recruitment is not about to become easy.As of February this year, 72% of UK firms were facing a skills shortage[v]. The jobs market is due a natural correction. Competition will remain stiff, especially for the best people and most in-demand skills.But, as employees start shopping around for roles, the employers which snap them up quickest will be those which are best suited to selling to a newly switched-on audience.Databases are perfect for switched-off audiences. You know most of them aren’t looking - but there are thousands of data, so if job comes up, one of them will bite.A database – and certainly not one owned by a third-party business - cannot tell you zoom in on an entire cohort of newly switched-on professionals, bouncing around the internet, plotting their next move.This is where marketing comes into play.Recruitment marketing was an insurgent trend long before Covid-19 hit. Google search data shows the term ‘employer branding’ in ascent since 2008.The problem was, with the universally accepted dependency on recruitment agencies, employer branding efforts were - as I demonstrate below - broadly patchy, misguided and rarely constituted what would be considered fully-fledged marketing.

Lessons from other industries, however, demonstrate that when audiences start shopping around, marketers soon follow.The travel industry is a good example.Hotels and airlines had always been relatively pleased with the additional direct access to customers provided by travel agents.But two things changed.

  • Technology proliferated. Customers began to spend more time online, and costs fell, lowering the barriers to entry for mass-market sales
  • Online travel agencies (OTAs) pounced, and began to subsume the market. They made things so easy for customers, they even began to claim the territory which had previously been occupied by brands’ direct sales.

Travel brands, late to the party, began to work double-time to recover lost ground.Every company in travel now invests heavily in identifying ‘intent to travel’, in order to become the party that captures the direct sale.So why isn’t your business investing in identifying ‘intent to progress career’?This isn’t radical; it’s fundamental digital marketing. Nor does it have to be difficult, or any more expensive than outsourced recruitment (which, as I explained last month, incurs a massive opportunity cost).The key is to become useful and interesting to jobseekers – and ensure that your messaging populates the places they visit online.

Moving up the funnel

Most employer brands are anything but interesting or useful. They’re more likely to be positioned around the business, than the employee.Consider Netflix: a trendy content business that’s enjoyed rapid growth and hired aggressively in order to keep pace.They’ve attempted to support this effort with ‘We Are Netflix’, a video series with reasonably high production values.Blockbuster titles include:

  • Working Cross-Functionality
  • What is Feedback like at Netflix?
  • How does Decision-Making Work?

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This kind of content is highly-tailored to switched-on audiences.You can draw your own conclusions as to whether anybody is seeking really great cross-functional working in their next role.But if they are, they’ve already become disillusioned with their existing company, or left their previous one, and started shopping around.In short: the focus is too far down the funnel.This is exactly the same growing pain that B2B content marketing suffered in its early days: companies talking too much about themselves (great for a converting a captive buyer) and not enough about their audience (better for advertising in a competitive market).Those few companies, whose focus is already further up the funnel, seem most likely to capture newly switched-on audiences.I like Salesforce’s example.

Within a couple of scrolls down its careers Twitter feed I encountered content on:

  • a thought piece targeting ambitious salespeople
  • helpful advice on how applicants to engineering roles should approach technical assessments
  • a video in which a Salesforce mum shares tips on working from home

By mixing up useful, informative and fun, Salesforce has earned an audience of 45k followers.It only has 49k employees; and only around 22% of people use Twitter[vi] - so it seems unlikely that the majority of people following @Salesforcejobs are current employees.More likely, they aspire to work there, they used to work there and stayed in touch, or they’ve bought into the standalone value offered by the employer brand.Switched-on audiences jobseekers, who encounter Salesforce’s talent funnel, are likely to find good reasons to stick around.

How to compete

The biggest rejection I’m getting on calls at the moment is that hiring is currently on hold – so why would talent advertising be of interest?Three factors ought to force this matter to the top of your CEO’s / CFO’s agenda.

  • If you don’t advertise for talent, somebody else will.

The most powerful firms – particularly big tech companies, whose software and data specialists are also the hottest property in every other industry – are on a hiring spree.Because of their size and prestige; these employer brands market themselves. Newly switched-on audiences are finding their path well-lit, and mostly leading to Silicon Valley.Big tech had long been a powerful talent black hole, leaving every other business feeding on scraps. Without decisive action, Covid-19 will make this problem an awful lot worse.

  • Advertising for talent today helps you hire tomorrow.

Shift focus further up the funnel, and you build an audience for a time when hiring becomes possible once more.Another – and perhaps more striking way of putting it – is that if you don’t advertise before the need surfaces, you’ll find yourself way off the pace.Following the last financial crisis, a report by the Institute of Practitioners in Advertising (IPA) found that brands which ‘saved’ on their marketing budget in the first year of a crisis eventually forwent profits approximately double that sum.Granted: employees aren’t the same as profits, and the employer branding is far, far less evolved now than consumer branding was in 2008.But the principle is the same: people forgot about the brands which stopped advertising, and migrated to those which did.

  • Talent advertising doesn’t have to be inordinately expensive.

https://youtu.be/Ri5mgNmfmXYWhen I worked at OLIVER, some fantastic presentations were held on Friday lunchtimes by the many clever and experienced creative and marketing professionals who worked there.As far as I’m aware, none of these presentations were ever filmed and distribute publicly. Like many employers, we missed a trick. These collective decades’ worth of experience, knowledge and ideas could have made the OLIVER employer brand indispensable to creatives far and wide – however switched on they were.There are other, even easier options.Affordable scheduling platforms such as Hootsuite have ‘teams’ functions which allow multiple stakeholders to post content, whilst your existing social media manager oversees curation and scheduling.This tiny operational cost to your business – around a few hours a week - would help you begin to cultivate an audience which you can easily identify, measure and communicate with when you need to.The software needed to support this kind of effort is now more affordable than ever.Recruitment is already undergoing a broad shift from applicant tracking systems (ATS) to recruitment CRMs. These relatively simple, affordable tools can plug into your company’s existing content ecosystem, without affecting any existing marketing activity.This will allow you understand who, amongst your audience, may be passively eyeing up the next move. It could also help you measure a return on your talent advertising investment.

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These are just a few ideas for how to get started on your talent advertising strategy; a bit of desktop research, and conversation with your marketing team will throw up countless more.The point is, doing something is better than doing nothing – and any cost you incur now should help you save far more on recruitment agency fees further down the road.

Who will move fastest?

Of course, employers aren’t the only ones who can make use of the suggestions in this article. Recruitment agencies can, too.History teaches us that agile startups often out-compete lumbering market incumbents when it comes to capitalizing on new opportunities.Amazon had no place becoming the world’s leading online retailer, when you consider that the first ever online order was placed with Tesco via Teletext in 1984[vii].But they went where the audience was, offered something useful, and came to dominate the market.Crucially, in doing so, they also engendered a virtuous circle which radically altered consumer behaviour in their favour.This should give pause to anyone who thinks the arrival of the ‘switched on’ jobseeker will be a short-term reaction to a short-term economic shock.Jobseekers have never previously been motivated to ‘switch on’.20th-century talent surpluses were characterised by a different kind of worker, and manifested as dole queues and as the closure of mines and factories. When the 2008 financial crisis struck, the economy had shifted in favour of professional services – but the marketing landscape was less evolved, and the tech more expensive. Recruitment agencies stuffed their databases, and grew fat on the spoils.This time it’s different.Employees - whether working, redundant or furloughed – are about to witness the effects of a perfect storm of circumstances:

  • recruitment agency costs becoming unacceptable to businesses
  • branding becoming more interesting to employers
  • tech costs falling, and strategic understanding spreading amongst talent teams – further underling the need to eliminate unnecessary third-party costs.

Employees will experience this in similar ways to how we currently experience consumer advertising:  interesting, appealing messaging, that generates an interest high up the funnel, before the need arises.The question is whether you, the employer, gets that slice of the pie – or if a recruitment agency beats you to it.Agencies may seem less likely to produce an aspirational brand, but they can produce content at least as effectively, and they’re usually more technologically capable than the average HR team.After all, their very survival depends on being the best at what they do.Employers, too, face an existential risk.A 2019 PWC report found that skills shortages are having a direct impact on businesses’ bottom lines; 55% of respondents said that it’s preventing them from innovating effectively.In any competitive market, failure to innovate usually comes at a devasting cost.As jobseekers ‘switch on’, a worrying future looms for employers which don’t do the same.

About Chapter 2

Chapter 2 is the first talent advertising agency: empowering in-house talent teams to attract the best people, without dependence on agencies.We:

  1. audit your social presence and career site, establish how effective it is, and present a detailed report how how to optimise and grow.
  2. attract the right people, with a content strategy tailored to your employee persona, and using the latest tech and marketing methodology to build talent pools around your employer brand.
  3. acquire the best candidates, by providing onsite support for your talent acquisition team.

With the right tools and strategy, we aim reduce your cost of talent to below 9.5%.And by keeping it within your business, you gain the skills, know-how and tools needed to keep attracting the best talent to your employer brand.Visit Chapter 2 to find out more.

References

[i] https://www.economist.com/briefing/2020/04/30/the-90-economy-that-lockdowns-will-leave-behind[ii] https://tradingeconomics.com/united-kingdom/unemployment-rate[iii] https://www.sonovate.com/blog/uk-recruitment-reaches-record-high/[iv] https://www.economist.com/briefing/2020/04/30/the-90-economy-that-lockdowns-will-leave-behind[v] https://www.cityam.com/skills-shortages-continue-to-hit-growth-as-uk-employers-struggle-to-find-the-right-talent/[vi] https://www.omnicoreagency.com/twitter-statistics/[vii] https://www.bbc.co.uk/news/magazine-24091393

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