As a boutique finance recruiter businesses, both large and small, approach Resourcery Group to advise on why recruitment processes are failing and what can be done to enhance the efficacy of resourcing and talent acquisition.
In the last 6 months, we have witnessed a general trend emerging of clients struggling to find talent for value. Put bluntly, businesses seem underwhelmed by what they are getting for their money and unwilling to pay a premium for perceived mediocracy.
There feels like a disconnect has formed between businesses’ expectations of what the market has to offer and candidates’ experience levels. This is being manifested in the pricing of roles. As someone said to me the other day, “businesses seem to think they can pay pre-recession salaries for post-Brexit skills”. The market has changed so why haven’t expectations?
The mis-pricing of roles and/or the over-expectation of candidates is causing many businesses across the North West a bit of a headache. Pricing of roles is having a significant impact on the length, efficiency, and cost of the recruitment process. Despite what you may have read about Generation Y and Generation Z, and the rise of the Millennials/iGeneration, salary matters. Yes, today’s market is as much about Engagement and Training & Development as it is Flexibility, but it is also about Reward and salary still has a significant part to play in decision making.
As such, as we are now firmly entrenched in Q1, a time traditional for many recruiters to proffer their expertise by way of salary survey (in a veiled attempt to gain your contact details), I thought it pertinent to ask: How often do your recruitment processes stall on the basis of salary?
Are you paying market rate? Have you lost candidates to counter-offers? Are you struggling to justify breaking internal salary bandings? Are you recruiting based on what you can afford and not what you need?
When recruiting, many businesses use the current incumbent’s salary as a starting point and look to justify continued relevance by comparison to external salary surveys. This is where the problems start.
Salary surveys are deliberately ambiguous around salary bandings as many factors can influence pay – location, size of company, ownership structure, complexity, breath/autonomy of role, etc. As such, it is not unusual to see a similar sounding role priced markedly differently by two seemingly similar businesses. A combination of confirmation bias and human nature means we tend to err towards the lower number in a salary band and justify our decisions.
So, whether you are a candidate looking to value your worth and benchmark against your peers, or a client looking to understand how much “bang you get for your buck” on the external market, it can be a labyrinthine journey to understanding salary.
From a client perspective getting salary right is critical. Do so and you can not only retain your most valued and value-adding employees, but also you allow yourself to compete sufficiently to attract the very best talent available. Whilst you wish to compete for talent you don’t necessarily wish to overpay for it; no one wants to be held to ransom and neither do you want to upset the status quo of your existing team. There is also the cost and budget ruminations to be mindful of as well.
From a candidate perspective, the topic of salary can be difficult. You want to be paid your worth but you don’t wish to make the basis of your acceptance of a role on money alone and been seen as mercenary. After all, the benefits of a bigger salary rarely (if ever) out-weigh the benefit of a more expansive role, supportive culture, or attentive mentor.
So, salary is a complex topic and getting it right is crucial.
To put this into perspective, I recently had a situation with a client whose budgeted salary was £50k inclusive of package, as this was the exiting incumbent’s leaving salary. Said incumbent had been with the business 10 years and their salary hadn’t moved with external market rates. The exiting incumbent got a job offer at £58k plus £6k car allowance.
Immediately there is a problem.
A £50k salary attracts a £40-45k candidate wanting a pay rise. My client was thus comparing the skills and ability of a £45k candidate with those of someone worth £64k on the external market. And they wondered why they felt underwhelmed by the quality of candidate they had met.
This “expectation gap” is where we at Resourcery Group are seeing the most pain in recruitment processes in 2017. To bridge this gap, you need to consider your approach to positioning salary very carefully and manage your own expectations as well as those of the market. With almost 30 years’ experience advising clients on all aspects of the recruitment process, we at Resourcery Group would ask you to consider the following questions when needing to recruit:
- How long was the previous incumbent in their role?
- Has their internal salary moved at the same rate as the external market?
- What is the salary and role they are moving to?
- Was the previous incumbent good at what they did?
- If not, what else would the next recruit need to bring to the table to add real value to your business? And how much does this skill set cost?
- How important is sector-relevant experience to success in the role? Is this critical to success?
- And if so, are we in a niche sector in the region?
- How important is ownership-specific experience required i.e. you must have worked in a PE environment before for example?
- Consider the breadth of role – the degree of cross-functional influence as we as the seniority of stakeholders being influenced – why and who are you influencing?
- How much autonomy is this individual expected to have – what does the individual have to deliver?
- Is this role critical to the successful delivery of the Target Operating Model and Shareholder ROI?
- What are your expectations on deliver from this role – is it a BaU role or a change and transformation role? Do you need role-specific experience – ERP implementation, M&A work etc.
- How urgent is your need to recruit? – you pay a premium to hire good people quickly.
- How niche is the skill set you need?
Whilst the above is not an exhaustive list nor a panacea for all the ills of recruitment, it can serve as a soothing salve for the pain of some recruitment processes.
If you have recently experienced some challenges in identifying and attracting the best talent on the market perhaps now is the time to stop and re-evaluate your offering and your expectations.
Time for a pay rise anyone?
For more Thought Leadership and insight into the wonderfully opaque world of Qualified Finance recruitment, why not pick up the phone and speak to one of the leading professional recruitment and career consultancy businesses in the region, Resourcery Group. With a combined 30 years’ experience and extensive network of contacts, we are confident we can add value to your career management, job search and the efficacy of your recruitment processes. Servicing the North West qualified finance recruitment market, we are interim and permanent specialists who provide a genuinely open and honest service to those willing to keep an open mind. Why not find out for yourselves at www.resourcerygroup.com or by calling 0151 345 9040.