The world is a very different place than it was a year ago! Living in Texas, I can tell you that not everyone got affected equally by COVID 😊. Anyways, this isn’t a piece about Covid and its effects, but rather a simple answer to the 2 most frequently asked questions I get from my customers -
1) How have salaries gone up so much and so fast?
2) Why are candidates declining offers or dropping out?
Here are some interesting facts and insights to help you connect the dots…
Women leaving the workforce – As per Fortune publication, there came a point during this Pandemic, when the number of women employed was 57% lower than the previous high and it actually dropped to what it was in 1988. Some articles state the number to be as high as 3 Million. When a household income drops and expenses continue to remain the same, it’s natural for the only earning member to seek more.
Inflation – With all the stimulus money pumped into the economy over the last year, someone is going to have to pay for it. As per Kiplinger, overall prices are expected to rise by 2.5% in 2021 as the pandemic recedes.
Travel and Millennials – Remember how cool it was when Millennials wanted to spend on travel versus buying a house? Well, when travel stopped last year because of the pandemic, living in small apartments eventually got uncomfortable. This, combined with WFH resulted in home buying.
Outnumbering the Baby Boomers – Millennials have surpassed Baby Boomers as the nation’s largest living adult generation. Their needs, consumption, risk-taking appetite, loyalty to an employer are on a different level altogether.
Housing Market – The last piece to the puzzle is the ability to buy a house versus the need to buy a house. We have seen the fastest pace of rising home prices since May 2020 in comparison to the last 15 years! Why? Because now Millennials (largest population) are interested in settling down. WFH is pushing people to upgrade or buy bigger homes. While the interest rates may be low, people need more money to buy and maintain these bigger homes.
The 2021 talent market is as HOT as the real estate market. The availability/inventory of quality candidates is way too low while the demand, owing to the ever-growing number of jobs, is way too high. Throw in the work permit sponsorship reductions for legal immigrants into the mix and the situation gets worse.
Just like you are having to pay 10 to 15 percent above the asking price to get that beautiful home, employers have no choice but to pay more in salaries and compete for the same limited talent. Candidates have more options today and carry a low tolerance for poor hiring experience. They rather drop out or decline if they are not happy about the process or sold on the opportunity. Wake Up! It is a 'Candidate Driven' market today.
A well-connected and social media savvy realtor who understands the pulse of the market is a must to help you compete in today’s housing market. Likewise, you need to employ a modern thought process to attract and acquire the best talent in today’s market. The latest and greatest tools or a bigger recruiting team is not the answer. It’s the creative approach, participation in talent communities, genuine effort into a great candidate experience, and the swiftness of your recruiting process that will help you compete and become successful.
If the candidate is sold on the company and the role and you have managed to keep him motivated and engaged through the hiring process, salary may even become a non-issue.
So get creative, ensure outstanding candidate experience, and stay humble, especially in 2021!