The talent market has been in overdrive for much of 2021 and ‘Help Wanted’ signs can be found across almost every industry and function. With stock indices setting new valuation records weekly and with IPOs and VC financings also at record levels, the technology sector is suffering an acute shortage of talent and the shortage is only going to get worse.
Completing assignments has taken longer and become considerably more challenging. Candidates are exercising greater caution and discretion when considering new opportunities.
In our year end review we look at issues and trends impacting the talent market this past year while looking to the year ahead.
Mass Resignation or Headline Hype?
By now we’ve all seen the headlines – Canadians and for that matter employees across North America are resigning and heading for the exits in droves. Is that what’s really happening or is it mere headline hype? From our vantage point the evidence suggests the latter.
The recent unemployment rate sits at 6.7%, just 1% above the prepandemic rate and according to Stats Canada the ‘job switching rate’ is below prepandemic rate. A recent Globe and Mail article noted that the proportion of adult Canadians who voluntarily left jobs and didn’t immediately resume working is roughly in line with 2019 levels.
This is consistent with what C-suite clients, including Heads of HR and Talent Acquisition leaders at both private and public companies have shared with us over the past few months. Specifically, employee churn is consistent with prepandemic levels and most point to increasing headcounts in 2022. While ‘mass resignation’ may be more prevalent in certain industries such as hospitality, widespread resignations are simply not borne out by the evidence. Even in industries where resignations are higher, the evidence suggests that such individuals have resigned to retrain and acquire skills to enter growth industries such as the tech sector.
Work From Home
With a high proportion of Canadians fully vaccinated and summer drawing to a close, it appeared that the worst of the pandemic was behind us and companies were planning to bring employees back to the office in stages. The first quarter of 2022 would be telling on the extent to which the WFH experiment had taken permanent root. And then the Omicron variant emerged and all bets are now off until more is known about the efficacy of the vaccines and boosters.
While it is difficult to speculate the degree to which the WFH experiment is permanent, it is safe to say that a hybrid model is preferred by most employees and will be adopted by most companies at least in the short term. As well, it’s become clear that a ‘one size fits all’ policy isn’t the ideal approach as employees have differing personal circumstances, needs and desires which evolve over time.
Increasingly, prospects seek flexibility in where they work and are not shy to ask about a client’s WFH policy before considering an opportunity. Flexible, hybrid models are no longer a nice to have and companies that resist offering the option will diminish the talent pool available to them.
Diversity candidates continue to be in high demand and almost every search we undertook in 2021 involved a request for a slate of diversity candidates. The supply of such candidates with the requisite skillsets, however defined, are simply in short supply. What to do? One approach is to work with clients in reframing the requisite skills in a manner that broadens the pool of ‘qualified’ candidates. Unless employers rethink roles in this way, highly capable candidates will be overlooked. Another option is to look laterally within the organization to find proven contributors to promote or cross-train thus grooming successors and diversity candidates from within.
Competition from Foreign Employers
Competition for talent from foreign companies, especially tech companies in the US has become more acute this year. With companies offering employees a WFH option this is sure to continue. Conversely, Canadian companies can now acquire talent they might otherwise never have considered possible, albeit in USD. Interestingly, Canadian law firms and investment banks found that their American counterparts were able to attract highly qualified and talented Canadian lawyers and iBankers with 50% – 75% pay raises, allowing such talent to remain in Canada. To stem the loss of talent, Canadian employers have had no choice but to offer pay raises, semi or quarterly bonuses and other incentives including vacations.
2022 promises to be another busy year on the talent front and we look forward to reconnecting with you in the New Year. In the meantime we wish you safe, happy and healthy holidays!