The Power Has Shifted to the Candidate, So Current Recruiting Practices Will Stop Working

Areas where recruiting must change during 2015

If you are frustrated because your recruiting approaches are no longer producing great results, you will be happy to know that there is a logical reason behind it. I estimate that 90 percent of recruiting leaders and hiring managers have yet to realize that the power in the recruiting relationship, which for years has favored employers, has shifted over to the jobseekers.

The technical term for this change is a shift from an employer-driven market to a candidate-driven market. And The Recruiter Sentiment Survey by the MRINetwork has revealed that 83 percent of the surveyed recruiters have realized that the power has now shifted to the candidate.

Knowing the reasons for shift is less important for recruiting leaders and hiring managers than recognizing that when jobseekers hold the power in the relationship, your current array of recruiting tools and approaches will literally stop working.

Another interesting phenomenon happens after the power shifts.

That phenomena is that your firm’s hiring managers will begin a seemingly endless round of complaints about how candidates have “an attitude” and how there is a shortage of talent or a skills shortage. If you’ve already heard those complaints at your organization, realize that there are actually more available candidates today. But those quality candidates are now acting differently (i.e. poorly in the eyes of hiring managers) because they have already realized that the power equation has shifted in their favor. As a result, these candidates will no longer tolerate weak employer brands, painfully slow application processes, death by interview, and a distasteful candidate experience.

You can complain all you want about the shift in power, but individual firms simply can’t change the power relationship. The only thing you can do is to radically change your recruiting strategies, tools ,and approaches, so that they now better fit the new level of power that candidates now hold.

Now that the power shifted, candidates who only a short time ago would easily tolerate slow hiring, no feedback and hiring manager arrogance will simply now drop out of the hiring process or gladly accept an offer from another firm.

Six Factors That Caused the Power to Shift to Candidates

If you were a recruiter during 1999, you already experienced the last quantum shift in power to the candidate, which occurred during what was known as “The War for Talent.” If you’re curious as to why the power shifts to the candidate, here are the major factors that can cause this shift to occur. The shift occurs when:

  • The unemployment rate drops (the U.S. rate is the lowest since 2008).
  • Turnover rates dramatically increase (turnover rates went up 46 percent last year).
  • Firms are not raising salaries, so employees must seek jobs elsewhere in order to get more money (wage improvements last year barely kept up with inflation)
  • Many more new jobs are open and they stay unfilled much longer (the job openings rate increased 22 percent since July 2013).
  • The competition for talent between firms increases dramatically because, as a result of company growth, the demand for qualified talent in key jobs exceeds the supply. Firms must fight over desirable candidates who now have multiple job openings to apply to, and now that the finalists receive offers from multiple firms.
  • Prospects, applicants, and candidates all realize that they now have multiple options, so they raise their expectations.

When that power shifts and prospects and candidates raise their expectations, currently effective “active-job-seeker” recruiting approaches like career fairs, print ads, large job boards, walk-ins, and your dull corporate career site will simply stop producing quality hires. 

The Top 15 Changes That Are Required to Compete in a Candidate-driven Market

In addition to re-examining literally every recruiting strategy, process, and tool, you’ll need to make almost all of the following changes. These required changes are listed in the order in which they occur during the recruiting process.

  1. Your recruiting strategy must shift — if you have a flexible corporate recruiting strategy, it already has a component that allows it to easily shift all of its components into “candidate-driven mode.” If you haven’t already planned for the shift, you may need to adopt a new “passive prospect” growth strategy. This type of recruiting strategy includes centralized recruiting with a focus on a strong employer brand, rapidly scalable hiring capabilities, proactive direct sourcing, a focus on employed top performers, a talent pipeline, and a strong relationship building and selling component. Because the competition is so intense, the strategy will also have to include a competitive analysis that ensures that your recruiting approaches are continually superior to those of your talent competitors.
  2. Prospect and candidate research becomes essential — candidate needs and expectations will change frequently in this highly competitive marketplace. As a result, market research and survey techniques will be required in order to identify how top candidates look for a job, what criteria they use to select a target company, and what criteria they will use to select their best offer. In a candidate-driven market, your ability to fully understand and to sell prospects and candidates becomes the No. 1 new success factor.
  3. Employer brand image improvement — brand image becomes much more critical in a candidate-driven market. Don’t expect recruitment advertising to work very well anymore; your targets will look for others outside the firm to say good things about you. Without a strong and highly visible viral employer brand image, you may literally have no chance of landing a single top performer.
  4. Shift from active to passive recruiting tools — the recruiting tools that worked on the active prospects who dominate an employer-driven market will not work when you have to seek out and convince employed individuals (the so-called passives) to consider your jobs.
  5. Stronger relationships and trust are required to poach — desperate applicants don’t require a relationship or any courting. But prospects who are in high demand (who already have a job) require a relationship that builds trust merely to get them to apply for an outside job. Obviously the power shift has already increased employee turnover. But because smart firms and managers will dramatically ramp up their retention and counteroffer efforts, it will be especially hard to poach away top employees from other firms.
  6. Your corporate webpage and social media presence must improve — in an Internet and social media world, most will get information about your firm from neutral sources. As a result, your corporate web page and social media landing pages must still be judged as “stunning and compelling” by those who visit it. They must be compelling and clearly superior to your talent competitors. Authenticity becomes a critical success factor when prospects have so many choices. If you are to have a formal application process on your corporate webpage, it must be amazingly quick and painless. Using LinkedIn profiles instead of resumes to apply will give your firm a major competitive advantage in this tight labor market.
  7. Position descriptions must be compelling — because top prospects have numerous job choices, your currently dull position descriptions and job ads will instantly drive them to other firms with more compelling jobs and descriptions. Unrealistically high qualifications will also severely limit applications, because of the large number of firms that are now seeking the few highly experienced/highly skilled individuals looking for a job.
  8. The resume screening process must be more accurate — the current screening process which I label “we have so many applicants it doesn’t matter if we miss a few good ones” can no longer be tolerated because it may have as high as a 33 percent error rate. Sorting software and hiring criteria that have been proven (a high correlation with on-the-job performance) must be used to ensure that no qualified candidates are prematurely rejected for minor reasons.
  9. Referrals are No. 1 because of your employees’ selling capabilities – referrals have become critical because we now have metrics that show that they produce the highest quality hires. But because selling prospects and candidates will become at least 50 percent harder, they must become the primary and highest-funded recruiting source. The strongest feature of referrals is that your employees are the best salespeople for convincing skeptical individuals to come work at your firm. In a candidate-driven market, your top employees are the most effective finding, relationship-building, and selling tool that you have. The target should be making referrals over 50 percent of all hires and the highest-rated source for quality of hire.
  10. The mobile platform is the No. 1 communications platform — after referrals, no recruiting channel is more important than the mobile platform. Prospects and candidates must be able to do everything from applying to accepting jobs directly and seamlessly from their phones. Because it has the highest message response rate, all recruiting communications and messaging must migrate to the mobile platform.
  11. The interview process must be improved — no other recruiting process needs more revision than this one. It must be faster, painless, and you must have a remote interviewing capability. But more importantly, up to 50 percent of interview time must now be spent on selling the candidate if you expect to land a single top performer. If you are slow to assess top candidates, they simply won’t be around when it’s time to make them an offer.
  12. You must speed up your hiring process – when candidates have multiple options and offers, slow hiring will mean that you will lose up to 70 percent of candidates who have other offers. Both recruiters and hiring managers need to work tirelessly in order to take every single delay out of the hiring process. For the few highly sought-after candidates, a one-day hiring process will be required.
  13. Recruiting and hiring manager behaviors must change — you will need better-trained recruiters and hiring managers who have lost their arrogance and replaced it with the ability to excite and sell candidates. You will need higher-quality recruiters who are simply exceptional at selling difficult to convince prospects and candidates. Unfortunately, the demands for excellent recruiters will soon far outstrip the supply (so begin hiring them now).
  14. The offer process must be faster and better — everything about the offer process will have to be made faster. In addition, offers will have to be data-driven and more personalized in order to make your offers more competitive. Exploding offers and identifying and meeting the job acceptance criteria of candidates will be essential. Salary surveys will have to be done much more frequently and they will have to be regionalized and much more accurate.
  15. The candidate experience must improve dramatically — even if your recruiting process doesn’t change, the average recruit’s assessment of your current candidate experience at your firm will shift from okay to dismal, simply because the power shift has allowed candidates to expect much more. In addition, with the pervasiveness of social media, everyone will know almost immediately if your candidate experience isn’t perfect. You won’t be able to make that quantum level of improvement without more accurate and frequent candidate experience measurements.

When that power shifts and prospects and candidates have multiple options, only recruiting approaches that have extremely powerful personalization, relationship building, and selling components”will produce acceptable quality hires. Resources must be shifted to proactive approaches, like top performer referrals, direct sourcing, and identifying talent through their work, approaches that are specifically designed to effectively lure and sell fully employed top performers who are not looking for a job. 

Final Thoughts

In a VUCA world that is volatile and rapidly changing, it only makes sense to assume that the recruiting marketplace will change also.

After numerous years of operating in an employer-driven market where numerous candidates applied, few dropped out during the hiring process, and almost no one rejected your offers, hiring managers and recruiters are in for a shock. The shock will come because my research indicates that most recruiting leaders and almost all hiring managers are not yet aware that the market has shifted. Not being aware of the shift will mean a lot of frustration among recruiters and recruiting leaders when they realize that their recruiting processes are suddenly ineffective. Beyond the frustration, failing to adapt in time will unfortunately cost their corporations millions of dollars unnecessarily as a result of the large number of lost or weak hires.

If you’re recruiting processes seem to have recently become significantly less effective, now you know why and what you must do to fix them.

About the Author

DJS campus headshot

Dr. John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high-business impact; strategic Talent Management solutions. He’s a prolific author with over 900 articles and 10 books covering all areas of talent management. He has written over a dozen white papers, conducted over 50 webinars, dozens of workshops, and he has been featured in over 35 videos. He is an engaging corporate speaker who has excited audiences at over 300 corporations/ organizations in 30 countries on all six continents. His ideas have appeared in every major business source including the Wall Street Journal, Fortune, BusinessWeek, Fast Company, CFO, Inc., NY Times, SmartMoney, USA Today, HBR, and the Financial Times. In addition, he writes for the WSJ Experts column. He has been interviewed on CNN and the CBS and ABC nightly news, NPR, as well many local TV and radio outlets. Fast Company called him the "Michael Jordan of Hiring," Staffing.org called him “the father of HR metrics,” and SHRM called him “One of the industry's most respected strategists." He was selected among HR’s “Top 10 Leading Thinkers” and he was ranked No. 8 among the top 25 online influencers in talent management. He served as the Chief Talent Officer of Agilent Technologies, the HP spinoff with 43,000 employees, and he was the CEO of the Business Development Center, a minority business consulting firm in Bakersfield, California. He is currently a Professor of Management at San Francisco State (1982 – present). His articles can be found all over the Internet and on his popular website www.drjohnsullivan.com and on www.ERE.Net. He lives in Pacifica, California.

  • http://www.medievalrecruiter.com/ Medieval Recruiter

    I’ll believe the market has shifted when wages start going up in earnest. Prices are the one indicator that you can rely on to tell you market conditions; when they go up, that means there’s scarcity. When they stay flat or go down, it doesn’t matter how much people are complaining about a ‘shortage,’ it simply doesn’t exist. Prices don’t stay flat or go down in a shortage, they go up.

  • BeeKaaay

    I call BS.

    If the power has shifted to the candidates, we would see WAGE AND SALARY INCREASES.

    SHOW ME THE MONEY.

    “desperate applicants don’t require a relationship or any courting”

    Because employers discriminate against the unemployed. Then whine when they get their best employees poached.

  • Bill Beattie

    I generally disagree with a lot in these articles, since I am on the external agency side of the fence, as opposed to being a corporate recruiter. But this article rings true to me.

    First of all, there has been some movement in salaries. Not as great as I would like, but there has been movement. Check out the figures from the Department of Labor.
    Secondly, there is a reason the salary movement has been slow. It is a normal part of the process. Very similar to the prices companies charge for their products. For instance, what happens when a company’s sales start to slow down? Do they immediately drop their prices like a rock? No they generally don’t.

    First, they try to ramp up marketing, put more pressure on their sales reps to sell, offer their sales reps more incentives to sell, or create new or redesigned products that the customer might want. If those changes fail, then they would be more likely to lower prices.

    So on the sales side of things, lowering prices is a last resort. On the hiring side, raising salaries by a large amount is also a last resort.

  • https://newsle.com/susanvitale99 Susan Vitale

    I totally agree, John. We at iCIMS dubbed this year “The Year of the Candidate” and put together a presentation that is almost verbatim to the list you noted above. Great minds…! 🙂

  • Jamie M

    This is spot on. I’ve been both a corporate recruiter and a 3rd party recruiter. It used to be the norm to have a candidate interview for hours and sometimes on more than one occasion. Hiring managers were looking for reasons NOT to hire someone and some of the time those reasons were even silly or not directly related to the job at hand (nitpicking communication preferences, candidate attire, etc.). Now — the power is with the candidates. Some hiring managers think that the recruiters aren’t doing their part but they have yet to recognize this shift. I do a lot more selling than I’ve ever had to. Often times, I lose the ones I sell because the hiring managers don’t have time and the interview process is dragged out or dysfunctional. The days of qualified candidates filling your ATS are gone. It’s the employers who have a good company reputation, good employment brand, competitive pay/benefits that move QUICKLY that will be on top. The employers that treat the candidate like interviewing them is a favor and that they should be grateful will be left in the dust.
    BeeKaaay – Wage and salary increases implies you’re speaking about the current employees and their pay as opposed to “the candidate” — what this article is about. When people move from one employer to the next, they see an increase or some other important benefit they are looking for most of the time. Why else would they leave?
    If you meant to speak of companywide merit increase programs — it’s not instantaneous and it’s much bigger than one person’s individual gripes. The catch up/realignment of compensation takes time just as the power switch has taken — often a few years. (1) Companies need to see the lower salaries or benefits affect them and (2) They need to evaluate what should be changed often times using a compensation consultant and (3) recommended changes and obtain approval as they usually affect an entire organization– typically those approvals are for the following year.

  • http://www.bobtuse.com/ Bob MacNeal

    16. If you’re requesting resumes, or if you use resumes to screen people, you’ve already lost.

  • Pingback: Six Reasons It’s No Longer Business as Usual in Talent Acquisition()

  • Pingback: The Power Has Shifted to the Candidate, So Current Recruiting Practices Will Stop Working | Reaource Central Blog()

  • Pingback: The Labor Market’s Better, But Not Yet Out of the Woods - ERE.net()

  • Pingback: The Labor Market Is Better… | | SourceMobSourceMob()

  • Pingback: How to Recruit in a Candidate-Driven Job Market()

  • Pingback: Are You Moving Too Slow for Your Candidates?()

  • Pingback: 6 Reasons It’s No Longer Business as Usual in Talent Acquisition()

  • ginacleo

    We have already seen significant shifts in compensation in key roles. Over the years, when this has happened offers lag because employers hired people in recession years (90-92, 97,2001-2003,2008-2012) when salaries were depressed and now are facing equity compression issues and are unable or unwilling to address those internal salary constraints and so try to shoe horn current candidates into internal structures rather than the going market rate.

  • Sam Velu

    Very True, if you are using resumes to screen and if you are not mobile- you are so far behind.