Is greater sourcing sophistication leading to employer brands offering less visibility and less choice?

Try as we absolutely might, it’s hard to ignore the siren voices of Brexit. We are confronted hourly by people, organisations, parties extolling their own opinions and choices – all of which appear implacably at odds with the next person’s. We’re invited to take part in sparsely populated hikes from balmy Sunderland and rather better attended events in the centre of London. Some want Brexit revoked, others want us out of the EU without delay and others want a second referendum. Sadly, during all of this activity, it’s not entirely clear what Mrs May wants, however. What feels increasingly the case, is that very few choices are likely to result in the happiness and agreement of all.

And choice and competition are at the heart of not only a dynamic country, a dynamic economy but also a dynamic labour market.

Let’s take last month’s example of the European Commission’s blocking of the proposed Alstom and Siemens’ merger. The idea was to create a pan-European giant able to compete with global players. The rejection of such a move was backed up by a paper published by a Brussels’ think-tank, ECIPE. The essence of the paper suggested that market competition in Europe (and the US) has been declining for decades – prompted by major M&A activity. According to the Economist, in 70% of all industries, the rate of entry of new businesses (or competition) fell between 2007 and 2014.

This has led to a small number of major firms dominating any number of industry sectors – looking at our own business services and energy market places, it’s hard not to concede that the paper has merit.

The upshot of such an absence of consumer choice is, not surprisingly, greater profit margins, for companies,and higher prices, for customers. What’s more relevant for the purposes of this blog, however, is the labour market impact of having fewer and larger players dominating a sector. The ECIPE paper concludes that such a scenario tends to lead to fewer employment choices and lower wages for employees and job seekers.

But this absence of choice works both ways in today’s talent markets. With a global economic slowdown and the Brexit brake-applying and caution, it’s little wonder that the UK economy is forecast to grow by an anaemic 1.2% this year. However, although some of the pep of the recruitment market has perhaps abated, it continues to throw off market-defying statistics.

Unemployment has now ducked under 4% for the first time since 1975. Employment, at 76.1% is as high as it has ever been. And if you thought that hiring last year was a tough ask, it’s only got more challenging in the past 12 months – with a now record 854,000 vacancies in the economy and another 415,000 people in work, compared to the previous year.

And what does this mean? It means that employers and recruiters have less choice – and more challenge – than they have perhaps ever faced.

And if such a scenario wasn’t already pretty daunting, then between December 2017 and March 2018, no fewer than 6,000 eligible visa applications from skilled overseas workers were blocked by the immigration cap. And, according to a City UK report, domestic employers have seen a net migration of tech graduates moving back to the EU since the result of the referendum was first announced. The ONS backs this up too – they record that in the three months to September last year, the number of EU nationals working in the UK dropped by 132,000 – the sharpest fall since records began in 1997

That might explain why recruitment isn’t the easiest gig in town right now. 

But does such apparent lack of choice and options apply equally to the other side of the talent equation? Do candidates equate today’s labour market with abundance and riches?

Not according to KPMG/REC and their Report on Jobs, which suggested, earlier this month that candidate supply continued to fall significantly in February, contributing to both higher salaries and tougher recruitment.

Do would-be applicants believe this to be a candidate-driven market with choices and options? More pertinently, what line of sight do they tend to have of specific employer brands? For me, the migration of employer brand messaging online and away from ambient and offline channels has contributed to a decline in such visibility.

More recently, the move towards greater in-house sourcing activity gives the impression to many that organisations are not actively recruiting. Because there is no tangible sign of an employer externally marketing its vacancies – unless you happen to be a recipient of such sourcing efforts – then it can be very easy to assume that such recruitment simply isn’t happening.

I’ve been lucky enough to work recently on external research on behalf of a major police force and a sizeable London council. The key takeaway from both pieces of insight? That external candidate audiences have little line of sight of either organisation (and such observations are absolutely not restricted to these two employers) being in active recruitment mode – because they see little obvious tangible evidence for this.

In the absence of such active recruitment, it can be only too easy to assume that those organisations are not, in fact, hiring.

In fact, this touches on the theme of my previous blog – organisations can appear to be insular in their approach to talent marketing. Such talent, with the caution of Brexit and some high-profile organisational failures in the back of their minds, can easily assume that such insularity is suggestive of an employer not interested in adding headcount.

This, in turn, leads to a vicious circle – if would-be talent perceives that few organisations are actively, physically and tangibly recruiting (because so much of that activity is now targeted and sourcing-based), then they are likely to lose interest in the recruitment market, making candidate availability even tighter.

And what about the choice that an ambitious individual feels they have with their current employer?

Does your organisation offer great talent the choice and opportunity of taking their careers in any number of different internal directions? Or do people feel like trapped talent? Do they feel as though internal moves are encouraged, welcomed and positively promoted across the organisation? Or do they feel as though such moves only mysteriously open up when they come to hand in their notice?

Quite rightly, we rarely attach positive associations with an absence of choice. Last week saw the publication of the Furman Review into digital competition. Among the key out-takes from this was the recommendation, interestingly, not to see the break-up of the likes of Google, Apple and Amazon, but rather to see the market entry barriers lowered in order to provide more choice and more competition.

I count myself hugely lucky to continue working in the EVP space. Less positive is that such projects often tend to view external, candidate-driven research as disposable or a nice-to-have. Gauging the perceptions of candidate audiences can provide hugely actionable insights into how such talent views an organisation and its opportunities. Even to the extent of posing the question whether an organisation actually has any current opportunities.

Modern resourcing has quite rightly become more sophisticated, more targeted and more specific.

In doing so, however, it can lead to an employer brand becoming less visible, less front of mind and less obviously, well, recruiting.

Neil Harrison believes employer brands should be informed by authenticity. It's awfully hard to arrive at such authenticity without having a topical understanding of what your employer brand is challenged with, what it has to offer, how it's perceived and what it's up against.

Neil has been lucky enough to work alongside exceptional brands such as Sainsbury's, Transport for London, Pizza Hut, HS2, The AA, BA, Heathrow, Virgin Media, the University of Sheffield, Telefonica, Santander, Unilever, Prosafe and Subsea7.

Today, he works with both clients direct and via agencies and RPOs. Such work is increasingly used to drive both diversity and internal engagement initiatives. The ability of an organisation not only to retain but to get the most out of its people has never been so important. We are also doing some interesting work in the exit journey of potentially departing employees.

Neil is a key member of the DANGERFIELD team.