You are here
What does an all-time low unemployment rate mean for HR and recruitment?
The Census and Statistics Department of Hong Kong has just announced the seasonally adjusted unemployment rate, and in Q1, it has fallen to 2.8%, which is the lowest in the past 20 years.
What does this mean? Perhaps it signifies a positive job market and high employment rate - something that’s definitely worth celebrating.
However, what does this really mean from a recruitment and HR perspective, and does a low unemployment rate necessarily mean that hiring is becoming easier? The answer is unfortunately, no. On the contrary, a low unemployment rate implies a challenging period for recruiters and HR professionals. A low unemployment rate means that there is more competition among employers, because demand for talent is high. For HR, retention will become a pertinent issue as there is a large supply of open roles in the market, making it an attractive period for employees to switch jobs.
This situation means that candidates are likely to receive multiple offers. On the flipside, employers will need to stay competitive by offering an attractive benefits package in order to snap up the best talent. If you are an employer that is looking to thrive in this talent short market, here’s some advice on what you can do.
Non-monetary benefits facilitate retention
As more millennials join the workforce, offering monetary benefits like a hefty pay raise and attractive bonus to retain staff may be insufficient and unwise. This is because the market will always be willing to offer 10-15% more to attract the best talent. Rather than competing on salary and bonuses, employers should invest further on intangible benefits that set them apart from their competitors like cultivating a distinguishable culture, implementing a solid career progression plan, promoting work life balance, offering benefits and providing training programmes to help employees upskill.
Out of the box hiring
Most employers usually increase hiring during a period where market conditions are positive, conversely increasing the demand for good talents. Business expansion also means that the workload of existing employees is bound to increase, so a reactive and effective strategy needs to be in place. Otherwise, this may lead to a high rate of turnover.
The ‘perfect match’ is rare in every hiring situation, so a piece of advice to consider is for employers to hire out of the box and base their decision on the candidates’ future potential rather than previous experience. Employers should prioritize the key requirements rather than waiting around for the candidate who ticks all the checkboxes.
Hiring based on experience
While looking for the perfect candidate will run the risk of a labour shortage and high employee turnover, lowering hiring standards might put the organisation in a situation of hiring incompatible candidates who are unfamiliar with the job scope and industry. This can lead to instability within the team, ultimately affecting the turnover rate as well. An effective strategy could be to promote existing employees to the vacant position and hire junior to middle level candidates to replace them. Encouraging internal mobility and organic growth can also strengthen your company’s retention rate and it is always easier to look for lower level candidates rather than senior level talent in the market.
Shortening the recruitment process
In the situation of a talent short market, candidates are not going to be available immediately or be easy to come around. The longer the recruitment process, the more likely you will lose the candidate you desire. Employers will need to act fast by shortening the recruitment process, and some ways they can do so is to combine the interview with the HR manager and line manager, or have multiple interview rounds on the same day. Video conferencing can also be another option if the hiring manager is not in town to meet with the candidates. Lastly, the time required by the line manager to get a counter offer approval will need to be shortened.
From talent sourcing to identifying quality candidates, Page Personnel has partnered with numerous companies to help them retain their competitive advantage. Learn more about our services here.