There is a prevailing notion that during an employer's market—where there are more candidates seeking employment than available job opportunities—companies can successfully hire with lower-than-market rate compensation plans or hire talent who would’ve previously been outside their pay bands. The reality, however, is more nuanced, particularly when filling senior-level roles with candidates possessing niche experiences and subject matter expertise.
Let's delve into the intricacies of the so-called "employer's market" and dissect why acquiring top-tier talent in an employer's market may still not be easy.
The Illusion of Affordability
In an employer's market, many hiring managers see hundreds of applicants and assume they can land high-calibre talent at a fraction of the cost. While this may be true for entry-level or junior individual contributor roles, the dynamics change significantly when seeking seasoned professionals with specialized skills.
These outrageously high application rates lead to the misconception that a surplus of candidates equates to affordability, but that overlooks one key aspect: how many are actually qualified for the role?
Again, depending on the specificity of skills required to succeed in the role, it is highly unlikely that there are even hundreds of experienced and specialized individuals who not only came across the job posting but also applied for it.
The Junior IC Advantage
The abundance of candidates provides employers with a broader pool for positions requiring generic experiences and falling within the realm of junior individual contributors. This creates an environment where employers can be more selective and negotiate favourable terms. However, this advantage diminishes as the required expertise and experience increase.
The Premium for Expertise
Employers often find themselves in a different scenario when seeking someone very senior with a specific set of niche experiences and subject matter expertise. The more specialized and senior the role, the smaller the talent pool and, consequently, the higher the demand.
The pool of qualified candidates shrinks significantly, transforming the recruitment process into a quest for a needle in a haystack (a majority-employed haystack). For these types of hires, the demand remains high and resembles a competitive landscape similar to what we experienced for all roles in 2021/2022. To hire successfully, employers must recognize the value these individuals bring and make offers that show this value recognition.
In the dichotomy of an employer's market, there exists varying compensation dynamics based on the required level of expertise. While generic roles may offer a surplus of candidates and potential cost advantages, the scenario shifts when seeking highly specialized and senior professionals. Recognizing the scarcity of such talent and understanding the competitive landscape remains vital to crafting compelling job offers.