It's the economy, stupid

I'm a little surprised by how many people who have spoken to me about new roles lately are surprised that the market isn't great right now.

I can only conclude those people don't read the paper or watch the news much. Or perhaps they do, and they fail to make the connection with their own jobs and careers? Anyhow here are the major factors influencing (depressing) the job market at the moment:

• You've got the European debt crisis and the fiscal cliff taking all the confidence out of the private sector
• You've got the Aussie dollar at $1+US, which makes offshoring a massive cost saver
• You've got the federal government trying to minimize spend to hit a surplus number
• You're coming into a time of year where the market starts to soften up. And I think that soft phase will be longer for the aforementioned reasons
• You've got a couple of state goverments (esp. QLD) swinging the axe hard
• A lot of the big employers are also cutting - Telstra, CBA, Westpac, Woolies, Optus, IBM, Macquarie Bank, Vodafone – they've all let significant numbers of people (be they contractors or perm staff) go in recent months and have a low appetite to hire

It's all forming a bit of a perfect storm for the local market. Take a look at today's ANZ job advertisement numbers. Long story short - 17% down on this time last year. Bleak.

And for those in the IT sector, the news is even worse. The analysis from ZDnet's Phil Dobbie shows that the IT jobs now comprise only 20% of the total job market, down from 25% five years ago. So between that and the drop in total job numbers, you come up with a real drop of 40% in the numbers of new IT roles as compared to 5 years ago. (Dobbie goes on to suggest this reflects significant structural reform in the local IT industry, something I tend to agree with).

People need to know that changes like this have an impact on them and their careers. This stuff is on our doorstep. The fact that you are good at what you do, earn x dollars per day on your last contract, or had no problems landing a role a few years back is somewhat irrelevant because the rules of the game have changed.

 

Contingency vs Customer Service

The bulk of recruitment is done on a contingent basis. That means if you don't place a candidate, you don't get paid. Which is pretty brutal when you think about it - you can spend a solid two weeks on some searches, so to not get paid a cent for that work is harsh. By far the worst cases are when a company decides to withdraw a role - it's one thing to be beaten out by another agency, but there's that real sense of futility when a job gets pulled. You can do everything right and still get stiffed.

Now this isn't a "oh woe is me" moment. I accept contingent business is how recruitment works. That no-placement-no-fee structure does though make one focus all their efforts almost exclusively on doing everything to find and engage the best people that are in the market. And this is probably why customer service from recruiters for many candidates falls down the cracks.

It's probably the single biggest complaints candidates have about recruiters - they sent their CV, or left a voicemail, and they never heard a thing back (other than the obligatory automated response). I understand that would indeed be frustrating, but if you're not right for the role, it's incredibly hard for us to justify spending the time ringing up to tell people they aren't right. It doesn't help us find the right person.

You could argue this is a short sighted approach, and that if we gave candidates a better customer experience that would pay dividends long term. Sadly I don't think that's actually true - in my experience a large percentage of candidates actually get p##sed off when told they aren't right for a job.

So spending a lot of time calling unsuitable people doesn't help you fill roles and nor does it do anything for your reputation.

Are you a great candidate?

If you were paying the bill for a recruiter, I'm sure you'd expect them to go out and find you great candidates for your role. People who fit the brief technically, who will fit into the team and company culturally and also come in under the budget. And indeed that's what we always aim to do.

So if you are not getting a lot of traction with recruiters, ask yourself this - are you actually a great candidate?

Just about everyone's automatic answer to this is Yes. "Hey, I've got 6 years of Windows server admin experience, I've got an MCSE, etc, etc". But saying you have x years of experience or certs y and z doesn't really answer the question. We've all seen people in the workplace who aren't very good, in spite of having experience, certs and degrees. Are you genuinely good? 

Reflect on this for a moment - 50% of people are worse than average. And recuiters are trying to track down that top 5 or 10%. That's 9 out of 10 who don't make the grade. Here are some questions you might ask yourself as to whether you are a great candidate:

• Are you an excellent communicator? Articulate, engaging, able to speak directly to the point. 
• Do you actually answer the questions you are asked?
• Is your CV polished, well formatted and sensibly structured?
• Is your career history stable? Good tenures in roles, with no major gaps in your experience.
• Have you worked for well known, well regarded organisations?
• Have you moved to different organisations across your career to prove yourself in different environments?
• Have you kept your skills up to date and relevant? (Keeping in mind it's commercial experience that counts)
• Are you certified in the technologies and methologies that you consider your core area of expertise?
• Are your pay expectations reasonable given your experience?
• And finally, the big one - Are you actually as good as your peers? (and how have you benchmaked this?)

The answer to more than one of two of these questions is no, you might now know why you aren't getting much traction.

My own personal feeling is the people that have the worst experiences with recruiters are in fact the worst candidates.

So Who Owns the Margin? (and the pizza analogy)

Contractors often feel recruiters are cutting into their margin. "I'm being paid $60/hr, and they're being paid $75. What a farce. I should be getting that $75."

Suffice to say I don't see it that way.

For a start, that $75/hr includes payroll tax and stat costs like workers comp, PI and PL insurance - that's about $4 of the $15 margin gone straight to the government and insurers right there.

#2. Clients expect to pay more for a candidate sourced through an agency. We eliminate a lot of the hassles associated with recruitment, we mitigate a lot of the risk of making a new hire, and source better candidates than clients can source themselves. Clients don't expect that to happen for free - they expect to pay more for a candidate sourced via an agency. That $75 they are pending to source via an agency will be significantly less if they go the DIY recruitment approach.

The clients aren't paying just for the candidate. They're paying for the process - the search, the shortlisting, the interview facilitation & the ref checking. And the margin also has to pay for the contingent nature of recruitment, and the cost of establishing a relationship with the client in the first place.

It's a bit like ordering a pizza from Pizza Hut rather than making it yourself. You're paying not only for the ingredients of the pizza, but also for the convenience of it being made, cooked and home delivered.

Head Hunting

There are few things that are better for your professional self esteem than being head hunted. Getting that call out of the blue to discuss a new job opportunity is a wonderful, flattering feeling. Who doesn't like to feel wanted or in demand?

Unfortunately though, there is an extremely low rate of converting that positive first up discussion into landing that same job. Now admittedly a lot of conversations go no further than that first phone call - it's not the right role or the right time. The focus of this article though is to explore those conversations that do go further, and why they don't finish with someone securing a brilliant new role.

It's fair to say head hunting people is much simpler in this day and age. Between networking tools such as LinkedIn and some of the more advanced search functionalities within Google, it's never been easier to track down names, titles, numbers and email addresses. As such, it's very much becoming a more routine means of sourcing people for roles, and that's a significant change. It flips around the whole dynamic of being head hunted - quite simply it's not the big deal used to be. Yet often candidates who have been head hunted will approach the recruitment process in a somewhat cavilier manner not realising head hunting is another tool in the recruitment arsenal, and that's never a quality companies want to see in candidates, regardless of how they have been sourced.

Some specific examples of the cavilier approach may include:

• Asking for a ridiculously large increase in salary
• Failing to do your due diligence around the company
• Not preparing thoroughly for interviews
• Just going through the interview process for the sake of it even though you don't want the role

One could say given you've been approached rather than applying, you've got the luxury of driving a hard bargain and being more relaxed about the process. The problem being that the Australian IT community (and for that matter recruitment community) is a comparatively small one, and you never want to burn any bridges unnecessarily. Always treat the recruitment process and the people it involves with great deal of respect.

The other trap headhunted candidate often fall into is not taking the time to thoroughly think through the logistics of changing jobs. When you actively search for jobs, you tend to search for jobs at a time that suits you, in locations you are comfortable with. You've probably drawn your line in the sand on salary expectations. You've typically discussed changing roles with your partner and possibly your family. All of that can go out the window when you are head hunted - you can get caught on the hop. And these can be the sort of things that can come back to scupper a deal when they are brought up at offer stage.

Here's a bit of a checklist of things you should be considering and factoring in before progressing with a role:

Remuneration: what's your base, when is your bonus due and what is the bonus structure, what benefits do you get beyond base + super + bonus (e.g. car allowances, stock options, subsidised insurances), when is your salary review due, are you walking away from a long serice entitlement
Starting a new role: what's your notice period, do you have any annual leave planned
Travel: are you confortable with the new location, what does that mean for your commute, does it suit your family
Visas: will moving jobs impact on your working rights or those of your family

Interesting Article in Sydney Morning Herald

This article was published in Saturday's SMH. It's basically a Bio on Matt Barrie, the guy behind Freelancer.

The article itself is an interesting read, though of particular interest are the comments regarding the trends toward offshoring. We've already seen a lot of low skill, low pay jobs (such as manufacturing, call centre and accounts) go off shore, but the current assessment is that this was just the first brick in the wall. A lot more of what are known as the knowledge workers (e.g. accountants, lawyers, web developers, etc) are all likely to follow a similar path.

When the Aussie dollar is running at $US1.06 and also smashing it against the Euro, it paints a slightly bleak outlook for the Australian job market in the medium term.

Right now you can actually outsource a call centre to England and save money........

Full article here:

http://www.smh.com.au/technology/technology-news/the-aussie-making-a-motza-from-offshoring-whitecollar-jobs-20120220-1thyc.html

Why can't we help?

Candidates often feel let down by recruiters when they have a history with the agency and/or the consultant. "I sent them my CV and I never even got a single call about a job".

In some cases this is indeed purely bad customer service, though in many cases I think there's very a willingness to help but a lack of ability to do so.

Recruitment tends to be very much a client driven business. By that I mean we go out and search for what the client is looking for, and thus I am somewhat limited in terms of what I can put in front of my candidates. Even if I reckon you're the best Red Hat Engineer in town, unless one of my clients wants to hire a Linux Engineer, I probably won't be able to help.

And even if I do have a Linux role on, I'm still going to go to market and try find the best three Linux guys I can find. Obviously you'll have a head start given you're known to us, but that doesn't guarantee you'll make the shortlist.