In late September Staffing Industry Analytics (SIA) released a report comparing expected demand for talent in 2013 against pre-recession high in 2007 and 2008. The results for those who use finance and accounting professionals look good on the surface, but taking current market conditions into play they point to an impending shortage of financial professionals.
The report indicates that SIA expects the demand for financial and accounting professionals to make up 87% of the historical peak in 2007. But while there appears to be significant room in the market to meet the demand, conditions have changed dramatically and the pool of viable candidates is just not as large as it was in the boom. Here’s why:
- Expectations of Candidates Are Higher – One of my pet peeves during the recession is all the people who would say things like “Wow, you must be awash with candidates!” The sentiment is that since so many people are out of work it should be easy to find candidates. Hiring managers have taken on this assumption and as a result they have dramatically increased their expectations of what they want to see in a resume. A candidate who we could easily place in 2007 will no longer get consideration. Hiring managers are looking for candidates with a consistent work history, progression and measurable accomplishments. These standards rule out a significant portion of the available population, making the actual pool of candidates much smaller than it may seem.
- Skill Atrophy – Consider this statistic from the December 2012 issue of Harper’s: in a recent poll, 44% of recruiters find that candidates with at least two years out of the workforce are very difficult to place, whereas only 31% of recruiters find that to be true for candidates with non-felony criminal records. With a significant amount of candidates who have been out of work for 26 weeks or longer, this phenomenon is much more commonplace than at peak employment, with serious effects. Obviously employees who have been away from the workforce are not able to keep abreast of changes in the market place, and many managers are concerned that long periods away from the office will result in the erosion of the candidate’s skill set.
- Candidates Have Left The Building – Many financial professionals who have difficulty finding work have given up or gone into other industries. An accountant with a yearlong stint with an auto parts manufacturer will not necessarily be welcomed back at a bank.
So even though we are using less than 90% of the need in 2007, we are now playing on a field where the expectations of talent are much higher. There is certainly room for growth, though not with the current standards. Of course, hiring managers may loosen up on those standards but only after spending a significant period faced with the prospect of not getting the quality to which they have grown accustomed.
Companies looking to acquire high-end talent will have to partner with recruiting firms that have a highly developed understanding of recruiting passive candidates and working with social media to get referrals, and who have the wherewithal to create recruiting programs that go beyond job postings. Connection between recruiters and line managers will need to become stronger so the cultural factors and opportunities for advancement that a particular group offers can be understood and used to attract talent.
Furthermore, the Patient Protection and Affordable Care Act will bring more talent to the market in 2014, as candidates in direct-hire positions will be more likely to consider consulting positions with benefits. That will start to bring more talent into the pool, but 2013 promises to be a challenging year for recruiting.
Fortunately, necessity is the mother of innovation!
By Peter Laughter, CEO at Wall Street Services