|Gardner's Accounting and Finance Update January 2014|
Obstacles to Hiring in 2014
Happy New Year! We hope 2013 treated you well and that your 2014 is off to a great start.
We had an unusually large number of clients reach out to us in Q3 and Q4 to inquire about the perceived shift in the job market that began to take place at the end of Q2. As organizations began to see sales increase, the hiring landscape began to change at a pace not seen in many, many years. We are now trending toward a candidate driven market where there are more job openings than there are interested candidates. There are unique challenges that a candidate driven marketplace brings to hiring managers and we've decided to dedicate our first Gardner Resources Group Newsletter of 2014 to this topic.
Where are the candidates?
There are many factors at play today which contribute to the lack of candidates entertaining new opportunities:
1. Unemployment in the Accounting and Finance sector: Many people still have the misconception that ‘everyone’ is unemployed which could not be further from the truth in the Accounting/Finance/Tax/Audit sector. 98% of our candidate base is currently working in permanent roles. In fact, our pool of temporary employees is at an all- time low.
2. Timing: Q4 is typically the busiest quarter for most companies. As year end approaches, budget season is in full swing and the holidays are looming. Potential candidates aren't available to conduct job searches because they are simply 'too busy.' This is something we see year in and year out. That said...
3. Bonuses and Promotions: In addition to being ‘flat out’ at work, bonus season and raise reviews are now at our doorstep. Having worked all year to receive their bonuses, many candidates will not entertain leaving their current employer until they receive their bonus and/or know about potential internal promotions. Many companies now ‘grant’ bonuses in the December/January time frame but do not actually pay them out until the end of Q1, creating a situation where employees ‘stay put’ for at least another quarter to collect the bonus they earned the previous year.
4. The devil you know: Our economy has shown signs of growth in many areas but it is still not what any of us would call booming. While many candidates tell us they are not happy at their current jobs, they also claim they feel more comfortable staying with their current employer versus venturing to the unknown. Accountants, by nature, are not the risk takers you may find in other sectors so cautiousness rules the day when the economy is not booming.
5. Level of Hire: Depending on the level of candidate your organization is looking to hire, you may be looking for much longer than you anticipated. For example, the candidates most challenging to find in any economic cycle are those with 2-4 years of experience. These candidates are, in essence, just beginning their careers. They are at the stage where they should be getting their first of hopefully many internal promotions. Unless there is a real impetus to leave an organization, these candidates are content to stay and begin to ‘climb the corporate ladder.’
6. Public Accountants: In the past, candidates working for the Big 4 or regional firms would get their audit hours, pass the CPA exam and leave for industry. Historically there was a mass exodus at the three year mark. Those days are long gone. We saw a very noticeable shift from this pattern beginning five years ago. Most of the CPA firms in the Boston area, (and certainly the Big 4) are doing a terrific job retaining their employees well after three years by creating a better work/life balance which, in turn, is keeping public accountants from entering industry. Because of this, It is getting increasingly more challenging to find mid level candidates with a blend of both public accounting and industry experience.
7. Location, location, location. More than ever, a significantly shorter commute is one of the main factors candidates state when seeking a new job.
Job Order Disconnects in this Market
When a job description has numerous, stringent requirements which an applicant 'must have' to even be considered for an interview, the already narrow pool of applicants gets even further reduced. This lack of flexibility greatly expands the length of time it takes to find an acceptable hire. Here are some of the 'must haves' that result in companies being unable to fill their open job requisitions:
o Requiring ‘X’ number of years experience (and no more or no less)
o Requiring a CPA
o Requiring a specific GPA or only considering candidates from certain universities
o Only considering candidates from either large, medium or small organizations. Again, the narrow field gets even smaller when clients strip away two-thirds of the available pool of candidates. In our experience, the best candidates are able to transfer their skills to any size organization.
o Experience with a specific software or ERP system
o A title that does not match the content of the job spec and is perceived by candidates to be a step back
o Requiring a candidate to perform junior level tasks (i.e. transactional accounting) as well as more complex, senior level duties. For example, a role where a candidate handles A/P and A/R but is also responsible for financial statement preparation, consolidations and analysis will not appeal to those individuals whose careers have advanced beyond basic transactional responsibilities
o Seeking a candidate who has a blend of experience that is rarely found. For example, seeking someone with both SEC and Tax experience or requiring both Finance and Audit experience. While some candidates have this unique blend of experience, the already narrow pool of talent becomes drastically reduced when clients seek these type of unusual blends of experience
o Lack of a bonus is often a show stopper for those who currently earn one. The overall trend is for employers to offer bonuses so when a company doesn’t, it sends the wrong signal and is a deal breaker for many candidates. This situation is greatly exacerbated at the managerial level where most organizations offer bonuses. In today's market, those organizations that don’t offer bonuses at this level and above are putting themselves at a real disadvantage
o Considering only those candidates with recent particular industry experience further reduces the pool. It is important to remember that smart professionals can learn the nuances of a new industry. In addition, a fresh set of eyes often provide a valuable new perspective. A client's willingness to train a candidate on industry greatly increases the size of the applicant pool
In our experience, the best solution to hiring in this market is to find candidates who have the capacity to learn the skills they don't yet have and to train them on the nuances of a particular role or industry. In addition, finding people who share the company's intrinsic values ensures a solid cultural fit which is a key element in hiring long term employees.
If you would like to have a conversation regarding today's marketplace and how we can assist you with current or future hiring, please let us know. We wish you and yours all the very best that 2014 has to offer!