How to Hire Employees in a Competitive Job Market
With unemployment levels at nearly a 50-year low—at 3.5% in December 2019, according to the United States Bureau of Labor Statistics—there are less active job seekers. That means employers must compete to find, identify, and recruit top talent. A competitive labor market also creates job openings due to increased turnover as passive candidates leave their current roles to pursue readily available opportunities that they may perceive to be a better fit.
The Current Job Market
According to a 2019 report by “Harvard Business Review” (HBR), census data shows that the majority of people who took a new job in 2018 weren’t searching for one—they were approached to apply. Other notable insights illustrating how competitive the job market is include:
December 2019 Census and BLS data shows 95% of hiring is done to fill existing positions. Most vacancies are caused by voluntary turnover.
Hiring talent remains the number one internal concern for CEOs, according to the 2019 Conference Board Annual Survey. It’s also the top concern of the entire executive suite.
PwC’s 20th CEO Survey reports CEOs view the unavailability of talent and skills as the biggest threat to their business.
Employers spend an average of $4,425 per job in the United States in hiring costs, according to Society for Human Resources Management estimates, and much more than that amount to fill upper-level roles. Use this guide to save money when hiring and to hire talented employees who are more likely to stay at your company.
filling existing positions vs new positions
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What Is a Competitive Job Market?
A competitive job market is one in which many employers are searching for employees, but the amount of available talented employees is not enough to fill the total demand. During competitive job markets, job-seekers have more choosing power, and employers need to strategize to attract quality hires.
Factors that increase competitiveness in the job market for employers include:
Economic growth and low unemployment rate
Demographic trends that increase retirement numbers
Technological developments that create new jobs
International trade policies that increase sales of domestic products and services
Immigration policies, which may create new job openings and limit the availability of talent inflow from other countries
A competitive job market means job seekers have access to apply for more open positions than they would in a stagnant job market. Job seekers gain more leverage in negotiating salary and benefits, as well as job selection, since more employers need to fill open positions.
How to Hire in a Competitive Job Market
To hire in a competitive job market, companies must stand out to talented candidates. They first must get noticed by being in the right places job seekers are looking, whether that’s an online job board or on a niche interest site. The job description must capture attention and inspire the candidate to fill out the application. The application process must be simple and straightforward, so that the candidate remains engaged. During the interview process, business representatives must effectively convey company culture and show how it aligns with the candidate.
Attracting and retaining skilled employees is a chief concern for employers today. Stay current on today’s employment trends to maintain the competitive edge:
Read our Staffing and Recruiting blogs
Here are the steps to an effective hiring process in a competitive job market.
1. Measure and Track Current Employees
A company must understand their successes and failures with past hires. Businesses should analyze employee data to determine their most successful past job candidates. Questions to ask might include:
Were they active job seekers or passive candidates?
How has the quality of hire varied by source?
How successful have internal promotions and transfers been for your business?
Track and measure current hiring results so they can apply tactics that worked to future hiring strategies. Look at retention and absenteeism, performance appraisals, and supervisor feedback on employees to discover what has worked and what hasn’t.
2. Create an Effective Job Description
You’ll gain a wider talent pool if you are realistic about how you frame a job description. Posting 50 “must-have” requirements may discourage and deter the exact candidates you’re looking for.
Ask for someone with direct experience in that role (a current employee or manager) for input on job descriptions. You might survey employees about what they do or how they view their roles before open positions are even available, so you have that information to inform future job descriptions.
You might consider working with a professional job description copywriter to create job descriptions for you. Someone with experience about what resonates with job seekers today can create job descriptions that grab attention, are keyword-optimized and keep candidates engaged.
HBR says one benefit to working with professional recruiters is that recruiters who specialize in finding and identifying the best talent can communicate to businesses whether or not their hiring requirements and proposed salary are realistic. You might want to consult with recruitment services to see if your job description is one that will attract the right kind of talent.
3. Simplify the Application Process
Make the application process easy and straightforward, or you’ll likely frustrate candidates. For example, a Jobvite recruiting report found 26% of millennials said the time it takes to complete an application is the factor they care most about when applying for jobs.
Some ways to improve your application process include:
Make the application process mobile-friendly
Use resume parsing so information from uploaded resumes is automatically pulled out and won’t have to be re-entered
Post jobs on LinkedIn, so candidates can apply within the site and connect their profiles
You also want to keep candidates engaged after they’ve applied. Communicate timelines clearly to candidates. Let them know what next steps they should expect and when so they don’t drop off or look elsewhere.
4. Source Internally
Your loyal customers, employees and friends and family are great sources to find talented candidates. A 2018 report by Indeed found 57% of small businesses find talent through word of mouth and recommendations. Create an internal job database, so employees can see open positions. This way, they can refer candidates for jobs, and apply themselves, as well.
Speaking of which, your business can save money and time in recruiting and interviewing by promoting from within. There are several benefits to this. Employees see a tangible way to advance their careers at your company, which can lead to increased retention. You save money on onboarding and training, since the employee is already familiar with company operations.
Post jobs company-wide to give more people at your business the chance to apply. That way, you can learn more about the employee talent you currently have and may be able to make a better promotion choice, compared to selecting one person for a promotion with no applicant process.
5. Expand Candidate Outreach
If you have an open job, you might know to post it on your website and LinkedIn and other popular job sites. But there are other ways to find quality candidates besides the well-known job boards.
The U.S. Chamber of Commerce recommends using smaller communities like Quora, Reddit, university programs, Meetup events and conferences to recruit talent online and in person.
If you’re conducting personalized candidate outreach, make sure to tie the candidate’s experience or why you’re reaching out to them to the job and your company. Make the candidate feel like you’ve researched their talent and believe they’re a good fit for your company because of specific reasons.