At the start of this year, the level of counteroffers we were seeing was causing havoc in the market…
With firms desperate to hold onto their existing talent, we were finding that an unprecedented of the offers we were receiving wound up being countered by the previous employer, often successfully. It could be argued that the press around counteroffers within both the Insurance sphere and the wider recruitment network exacerbated the actual situation and played a part in creating a sense of mass hysteria. Some individuals may have even capitalised on the situation and, knowing that their company would want to keep them on, saw an opportunity to drive their salaries up.
But we always knew this state of over-offering couldn’t last forever; at some point, the bubble had to burst. We have definitely seen a significant reduction in the frequency and level of counteroffers over the latter part of the year, which is a real relief. Whether this is down to companies not being able to afford to make these offers anymore, or if shareholders have finally begun to say no because the salaries being offered are now eating into profit, is unclear; either way, counteroffers have definitely cooled off.
But candidates’ expectations don’t match up…
In spite of clients dialing back on their offering for new staff, as well as their counteroffers, there is definitely a disconnect between what candidates perceive their value to be, and what clients are now willing to offer. We often find that clients would prefer candidates to come in at a lower level and would usually rather pass up on candidates than offer more. It seems that there is a lot less panic from clients to try and get candidates over the line: there is a lot more confidence that there are candidates out there who are looking for a new opportunity and, as such, there is a lot less competition from the same clients looking to secure the limited available talent. This change of overall mindset from the client side is probably one of the biggest shifts we’ve seen over the course of the year.
But, from the perspective of the candidate, this is creating issues. Where the start of the year saw a significant increase in salaries on offer from clients desperate to secure talent, candidates now have an inflated sense of worth, which means that their salary expectations aren’t necessarily in line with the experience they have. In Q1, it felt like the mindset was that money wasn’t really an object if it meant securing the right candidate: clients may even have been prepared to take on the candidate that most closely fit their requirements and pay a hefty salary to ensure their acceptance, even if they didn’t quite tick all the boxes. However, now that the general mindset has shifted, clients are not only being pickier about who they take on but are also in some cases realizing that they have paid a high salary for a candidate who hasn’t actually been able to deliver a return on their investment. The issue is that now when these candidates are then let go, they have the sense that they need to obtain this same level of salary in their next opportunity. This has created a definite disconnect between client and candidate expectations in the current market.
Why are candidates looking elsewhere?
We have seen a shift across the board where candidates in the sector are being asked to return to the office. Corporates in particular seem to want their staff to return to the office for 3 days a week as a minimum, if not more; but all businesses seem to be implementing more days in the office. This is creating some stumbling blocks to hiring for businesses, where the opportunity is the right fit for the candidate but doesn’t offer the level of flexibility that the individual requires.
We have also seen an increase in career moves due to the prevalence of Mergers & Acquisitions in the market. We are continuing to see independent firms being bought up by larger corporates, and this is having an impact on the talent available: in some cases, offices in various locales are being closed, forcing individuals to seek alternative employment. Individuals may simply not want to work for a larger corporate firm, preferring the culture and atmosphere of an independent firm. This can either lead to an influx of talent on the market or in some cases, those individuals may seek to set up their own independent firms. The talent that does become available in these instances usually winds up being snapped up quickly.
Equally, overwork is a common cause of seeking alternative employment; for loss adjusters in particular, the caseload is a crucial factor in deciding to move. When individuals become overloaded and their workload becomes unmanageable, it is easy to become burnt out, and this is a key motivator for candidates looking elsewhere.
A reset to normal…
It certainly feels like we are ending 2023 with somewhat of a reset; we have returned to a more ‘normal’ hiring market, where if you are able to find a candidate the right opportunity and they gel well with the client, they are likely to accept and make the move. It seems that people are genuinely looking now, from both sides: it is less about filling a gap out of desperation for clients, and more about finding opportunities that candidates are genuinely bought into. Clients are willing to wait to find someone who has the right mindset and culture fit for the business, rather than pay for someone who is out of kilter to plug the hole. For us, it’s all about finding clients the right candidates at the right price, who are able to commit to the right level of hybrid and in-office work. Equally, candidates want to ensure they’re committing to the right company and culture for them, as well as a job that offers the progression they’re looking for. So, while salaries will always be important, these elements have become the key drivers once again.