What Has Caused the Talent Market to Change So Much

And What Recruiters Can Do

For several decades, recruiters, hiring managers, and organizational leaders have maintained a relatively consistent view of the labor market. To them, it seems as if there are plenty of qualified people who are actively seeking opportunities. A recruiter’s job is to screen out the many applicants and present to management only those few who are best qualified, according to often arcane and confusing criteria.

We now know that this is not the case. Many qualified workers no longer believe that organizations are the only or the best environment to be creative or fulfilled. We know there are skills shortages. We know that many highly skilled people do not want to work for large organizations. And we know that we need a different process and message to attract good people.
The pandemic has accelerated the changes in the labor market, but the roots were already growing. We could have seen the signs of change by finding the disruptors and trends that drove it.

The Landscape of Labor
Historians may write that the definitive differences between the 20th and 21st centuries are about peoples’ attitudes toward work.

Much of the 20th century was focused on discovering how to find and extract raw materials, efficiently transport them, and transform them into consumer goods. The previous 19th century had been different. It had been a century of pioneers, farmers, loners, entrepreneurs, and explorers. For the most part, individuals controlled their own time or followed the course of the seasons. Large firms employed only a handful of workers.

In the early decades of the 20th century, this quickly changed. Large numbers of hired hands began to move off farms into cities, looking for higher wages and less strenuous work. People were a readily available and abundant resource. Jobs in industry promised more incredible wealth and some level of security, although for a price in lack of freedom and control over working times and conditions.

And as factories began to produce more machinery, much of it aimed at farming, farms needed even fewer workers, further increasing the available supply of workers. Therefore, the supply of unskilled but eager workers rose rapidly, fueling the growth of industries that produced wage earners keen to spend money on consumer goods.

The control of raw materials, the growth and domination of shipping and distribution channels, and the accumulation of information about making or doing things became increasingly valuable. Ensuring control over proprietary information required developing a set of laws and practices which included everything from patents to tenured working relationships.  

As a result, organizations controlled the amount of time people worked, what they did, how they did it, and how much they were paid. Workers had few rights, could be fired for any reason, and had few safety or health protections. Unions, government regulations, and human resources practices slowly changed the landscape, but only after decades of work.

It seemed natural for people to work for an organization. Success was defined by how long a person worked for an organization or by their title. We believed that only a handful of professionals and exceptional people could work for themselves and be financially successful, and then often, only after years of study or working for an organization to gain experience and credibility. We believed that organizations and even government should protect and even nurture us.

The 21st century dawned with many people feeling unhappy or unfulfilled in working for an organization. Their discontent and ability to work independently have led to mass resignations and made it difficult to hire.

Here are some of the disruptors that have driven this.

Disruptor #1: Everyone an Entrepreneur
Today there is less value in simply owning data and more value in how it is shared, understood, and applied.

Ownership of patents and other forms of intellectual property has been a cornerstone of financial success for many organizations. That is beginning to change in several ways. Wikipedia is an example of how many people collaborate and share their knowledge to create a free, unlicensed, and open encyclopedia. Also, by opening up and sharing information and collaborating, many firms are increasing profits. We are more aware today of the power of integration and collaboration. The most profitable firms have learned that success comes from interdependencies and collaboration. Recruiters need to be open to sharing candidates, working in a cooperative way with other recruiters, and lessen their proprietary hold on candidates they can’t hire immediately.

Disruptor #2: Crowdsourcing
Historically decision-making was confined to a small and usually local group of people because of the limitations imposed by travel and communications. Today the scope of knowledge gathering is genuinely global, and people anywhere can be asked to contribute data, information, ideas, or opinions to any issue.  

Today there is a groundswell of interest among the recruiting community in leveraging the friends, associates, and colleagues of potential candidates to assess their suitability for a particular job, as well as a growing variety of tools that allow recruiters to ask who might be a good candidate and about the character of a particular candidate. And while this is akin to what we have always done – ask other people about people they know and we don’t –technology has vastly expanded our reach and the quality of the end decision.

Disruptor #3: Technology Enables Scale, Reach, and Innovation
The pandemic has illustrated to everyone the power of technology. Technology moves us forward, pushes us out of our comfort zones, and challenges the established way of doing things. The growth of artificial intelligence, machine learning, neural networks, and natural language processing have opened up new ways to find, recruit, communicate with, and assess candidates anywhere on earth.

We can find, communicate with, and assess people from anywhere without ever seeing them in person. We can assemble virtual teams to improve the quality and diversity of business results. We can send work anywhere making the entire world the workspace of the future.

Chinese-owned Lenovo, one of the world’s largest makers of computers, has no physical headquarters. Its staff is dispersed geographically and works wherever it makes the most sense. Likewise, Hanna Concern, a strategic consulting company, also prides itself on having no physical headquarters and in harnessing a global team of experts who work where and how they wish to meet business goals. Other companies follow this model because technology makes it possible to tap into the world’s most creative people, locate scarce skills, get a broad array of diverse thinking that crosses cultural barriers, and provide everyone with a choice in how, when, and where they work.

Technology has already transformed the methods we use to create our brand and build relationships with candidates. But we have just begun our technology journey.

Disruptor #4: People Analytics
Data includes all information no matter how it is coded – whether in audio files, video, film, email messages, or books. Big data refers to the totality of information available. Today the amount of data available and the amount being created is so large that the actual number is meaningless.

Artificial intelligence makes it possible to scan through all the data about a single employee. It can scan everything they have written, all their photos, phone calls, emails, and social media posts, and then draw correlations with performance. No human could do this in a lifetime, as the volume of data is too large.

This makes it possible to learn more about who our best employees are and what traits and skills are associated with performance. This data can then be applied to candidates to help us select those most likely to perform well.

To Rebuild and Attract the Best
Somewhere during the past fifty years, perhaps because of a surplus of people or jobs needing lightly skilled people, we lost the part of recruiting about building relationships, creating mutual trust, and giving respect.

We turned recruitment into an administrative process, often treated candidates as commodities or disposable assets, and we lost our humanity. The new breed of recruiter will need to focus on communication, influence, and education and have a deep appreciation for the power that talent has over the profits and success of every organization.

Fortunately, the pandemic combined with more enlightened leadership, advanced technology, and the relentless pressures of global markets combined with skill and people shortages may have put us back on course.  

We need to ensure everyone understands that successful recruiting is about giving candidates and employees respect, building a trusted relationship, and sharing authentic information. Whoever writes the history of this century will judge how we did.

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Related Links

How Recruiters Can Adapt to Major Shifts in Candidate Attitudes

The global talent market: the new land of opportunity is anywhere

Adapting To Shifting Candidate Attitudes