Fall 2009 Is the Employer’s Time!
- By Sergey Salikov
- Sep. 02 2009 00:00
Under the new economic conditions, the recruitment services market has generally been in a slowdown from January to July 2009. Recent months, however, have set very optimistic trends. The number of requests for personnel selection from top companies is in steady growth. At this moment, compared with the first quarter of this year, the labor market is quite lively. About 70 percent of vacancies frozen early in the year were re-activated in summer. Sales and pharmaceuticals remain the traditional leaders. The number of requests from such sectors as real estate and construction, retail has declined.
The pre-crisis period was commonly referred to as a “candidate’s market”: one vacant position attracted, on average, 1 or 2 candidates. Specialists were able to choose the best offer from those available in the market, looking narrowly at an employer. Oftentimes, when only embarking on a job search, they already had 2 or 3 offers at hand. Starting from last fall, the situation changed dramatically as the demand for many skills plummeted. Those to suffer most were people specializing in finance, economics, HR, as well as marketing and logistics professionals. As far as technical, engineering, and administrative talents are concerned, they enjoy a stable level of demand. Technical (engineers, IT specialists, etc.) and sales skills remain in traditionally high demand. The medicine and pharmaceuticals sectors remained nearly unaffected by the crisis and keep on actively developing.
Overall, the HR market is again dominated by the employer, who is the one to dictate the terms. Employers currently have a huge choice in candidates, which they did not have over the last few recent years. If previously, faced with staff famine, companies could be indulgent towards a candidate’s English language or PC skills and a specialist was given time to raise his the skills to the required level, now this is out of the question. Employers are increasingly frequently tightening requirements for candidates.
In addition to employers’ requirements, the terms they offer have also changed.
Today, it is a rare case to see a company carry on with promotions, preserve bonus payments, and index salaries. A pay raise is generally a rare occasion. There are individual players who feel rather securely in the market and raised pay levels early in the year or are doing this now. But this is rather an exception rather than a rule; most companies are still in a wait-and-see attitude mode. When hiring new staff, companies seek to set the salary at a level, which at this time is a market average, but is certainly below the pre-crisis figures. Those to be named among the stable sectors, if any, are medicine and pharmaceuticals.
For example, despite the turbulent economic conditions, in the beginning of 2009 all representative offices of foreign pharmaceuticals manufacturers implemented a traditional annual indexation of salaries of about 5 to 15 percent. At the same time, however, they cut their HR costs through other elements. For example, we see some companies being very conservative in allocating budgets to various kinds of HR programs, forgoing the invitation of external business trainers to train their staff.
To summarize, it can be said that generally, in today’s circumstances the management are confident that their staff, in order for the sake of keeping their jobs, are willing to be paid less than before the crisis. We are also seeing that priorities of employees themselves have changed as well: they are ready to take a salary that is in line with the market average.
So, over this last year the market has turned from being candidate-driven to being employer-driven: Today, the key role in the hiring process is assumed by the employer (as regards requirements, duties, pay level), whereas previously, conditions used to be dictated by the candidate.
The labor market has visibly stabilized since the first and second quarters of 2009. Many companies have implemented restructuring and are allocating a budget for the selection of new employees.
As the HR market is imposing its terms, candidates have changed their demands from the previous year. Specialists have lowered their requirements to employer, including salary expectations. Candidates have become more mobile and willing to consider offers involving relocation — this is especially true for top- and middle-tier staff.
It is increasingly often that experts predict a second “wave” of crisis. Potentially, the largest damage may be suffered by the manufacturing (mechanical engineering) and financial sectors, while retail, agriculture, food manufacturing, pharmaceuticals will pass through the second wave relatively well off.
The last nine months suggest that we have entered a new economic reality and need to learn to live under the new conditions!