Job market in 2016, expectations in 2017

2016 started with a very bullish hiring outlook by employers in India. 70 percent organizations had proposed to increase hiring across all levels in 2016, according to the Aon Hewitt Decoding Hiring Trends Study 2015. When compared globally, India also had the most positive hiring outlook (at 41 percent) in the last quarter of 2015, as reported by the ManpowerGroup Employment Outlook Survey.

It was the strong performance trends in 2015 that laid down the expectations from 2016. We look at some of the key macro-industry trends from 2015 that shaped 2016.

Talent shortage – Creating an imbalance

Although there was an increase in demand, it was met by an almost equal increase in talent shortage, somehow creating an imbalance between the demand and supply of talent. ManpowerGroup’s Talent Shortage Survey, 2015 revealed that 58 percent HR leadersin India had a difficulty in filling jobs last year. Besides the lack of available applicants for jobs, skill shortage, lack of experience, and compensation expectations were the other reasons why talent was in short supply last year, making it difficult for companies to meet their talent needs

However, employers had not taken (or were planning to take) enough measures to address these challenges at the end of last year. Only 2 in 10 employers adopted recruiting strategies for utilizing previously untapped talent pools.

Lack of enough jobs 

2015 had also seen a huge slowdown in terms of job creation – so much so that the quantum of jobs created across 8 key industries had been the lowest since recession. Jobless growth was to become a major point of discussion in the year to follow. 

Slowdown in attrition

Attrition was recorded at 16.3 percent in 2015, according to the Aon Hewitt Salary Increase Survey 2016. What was positive was that this happened to be the lowest since the year 2009, but the negative was that key talent attrition increased significantly from 5.9% in 2014 to 7.3% in 2015. 

There were prevalent gaps in talent acquisition in organizations. And the Aon Hewitt Decoding Hiring Trends Study 2015 revealed that 93 percent leaders agreed they weren’t doing enough to address these gaps.The expectation in 2016 was that the crude situation of talent shortage be addressed.There were also expectations of recruitment metrics to evolve, with ‘quality of hire’ surfacing as a strong competency metric of recruiters, and expected to proliferate even more.

There is still a talent shortage, but the country has come far. The employers reporting talent shortage has decreased by 10 percent vis-a-vislast year – now 48 percent HR professionals in India have a difficulty filling jobs as compared to 58 percent in 2015, according to the ManpowerGroup Global Talent Shortage Survey 2016. And this has happened despite a consistent increase in hiring numbers month-on-month (except October). Illustration 1 showcases the increase in hiring numbers in 2016.

Some industry trends were also observed in 2016, outside the scope of macroeconomic hiring activity.

2016 saw the rise of the “continuous candidate”

Millennials have formed a major part of the discourse in HR for a few years now, with multiple infidelity traits being associated to them. The discussion amplified even further in 2016 with the Deloitte Millennial Survey reporting that two in three millennials expect to leave their current jobs by 2020. This cumulative response of 7,700 millennials from 29 countries around the globe which came at the start of the year was a reality check for most businesses.In India, the number is even higher than the global average– 76 percent in India as compared to the global 66 percent.

ManpowerGroup called this infidel group of people as “continuous candidates”, defining the term as people who are always looking for the next job opportunity. Globally, 1 in 3 candidates is a continuous candidate in this world, the study found out.Compensation and career advancement opportunities were revealed to be their biggest motivators for changing jobs.

Initiation of the gig economy

The ‘uberization’ of workplace or the rise of the ‘gig economy’ as many call it, was also an interesting feature of 2016. With the workforce expected to comprise of 50%millenialsby 2020 and this segment of the workforce favouring a flexible working arrangement, there was an increase in the people working on jobs like they were gigs.The number of contract workers in organizations has risen from 20% to 25% in the contingent workforce in the past two years, according to the India Skills Report 2017. It can be argued though that the majority of these workers are centralized in a select few organizations – with 60% of the employers having less than 10% of their workforce as contractual employees. The India Skills Report 2017 says that India might be a little far away from becoming a gig economy.But with 43 percent employees feeling every job is temporary (ManpowerGroup’s Continuous Candidates Report), organizations may have to move towards that direction.

Focus on candidate experience

Organizations realized the importance of ‘engaging with passive talent’. Aon Hewitt-People Matters Decoding Hiring Trends Study 2016 reveals that with 48 percent organizations stating that when passive talent is engaged effectively by competitors, it is a threat to losing top talent. Gerry Crispin, Principal and Cofounder, CareerXroads in the People Matters Big Interview for August 2016 corroborated this by revealing results of the Candidate Experience Survey 2015. According to the global study, 78 percent of candidates with a positive experience encourage others to apply, but 40 percent of those with a negative experience go out of their way to discourage people not to apply. A positive candidate experience also has a direct businessimpact, especially if the business is consumer-facing. The study had revealed that 25 percent of candidates who have a bad experience discontinue all the relations with the organization, which meant the candidate would cease to be a consumer if not engaged with effectively. Giving the successful example of Hilton’s candidate engagement practice, Crispin said, “Hilton engaged in a white glove treatment of all candidates and the business discovered that over the following year, the candidates they did not hire spent another 130 million dollars with Hilton as the hotel chain’s customers.” This was a critical trend that emerged that organizations had to embrace, and the organizations that haven’t, will have to.

India Inc. continues to be bullish with hiring. Comparing globally, hiring will be strongest in India as 32 percent of organizations report a positive hiring outlook, according to the Manpower Employment Outlook Survey.

According to the India Skills Report, the hiring intent has increased between 7 and 10 percent in India Inc. on an average. There has been a percentage increase in hiring numbers across all sectors, with almost every business in every industry showing an intent to hire at a similar or greater rate than last year. See the illustration to know sector-wise percentage increase in hiring intent.

Besides an increased hiring intent, the talent acquisition function will take a more strategic turn, because it won’t only be the acquisition of key talent that will be a competitive advantage to companies, but how an employer engages with passive candidates and taps the untapped talent pools will be detrimental. People Matters foresees the following trends in talent acquisition in the coming year:

Increased focus on establishing the employer brand

39 percent organizations are increasing their wallet share in ‘branding and marketing’, revealed the Aon Hewitt-People Matters Decoding Hiring Study 2016. 29 percent companies surveyed have cited building and communicating their employer brand as one of the most important activities of the organization. Organizations are also investing in building the employer brand internally to decrease external dependencies for sourcing and using their employees’ networks to source talent. 33 percent companies plan to increase spend to further utilize employee referrals for sourcing talent.

A testimonial of an increased focus on establishing the employer brand was given by Arne Christian van der Tang, the group HR Head of TomTom. In his interview to People Matters, he had suggested the importance of re-establishing the employer brand of the company, which was once the global leader in navigation systems. Given the critical impact of being a top employer, the company had gone ahead to dedicate asix-people marketing team that looks after the employer branding activity of the organization.

Increasing investment in recruiting technology, not recruiting professionals

The Aon Hewitt-People Matters Decoding Hiring Trends Study 2016 also revealed that recruitment budgets are increasing in 67 percent organizations.But the budgetis not being spent predominantly on increasing the size of recruitment team; only 21 percent of companies report wallet share increase for ‘recruitment team cost’, thereby adding to margin pressures.

To aid recruiters in keeping up with the business need of hiring talent, organizations are increasing investment in HR technology/platforms to bring process efficiencies in recruitment processes. 42 percent organizations report an increase in wallet share for this component. Digitizing recruitment processes also creates an opportunity to utilize the skills of the Talent Acquisition team differently. With technology driving the operational part of the recruitment cycle, TA professionals can now play a more strategic role and be ‘trusted talent advisors to business’; something which is the third most important recruitment priority for organizations.

Quality of hire

Organizations are moving towards measuring ‘quality of hire’, with 30 percent organizations wanting to track ‘quality of hire’ consistently in the coming year. So metrics to measure talent acquisition teams will have to evolve. Organizations currently measure quality of hire through “new hire performance evaluation (50%)”, “time to productivity (45%)” and “turnover or retention statistics (43%),” according to the LinkedIn India Recruiting Trends 2016 Study.

In a nutshell, 2017 will witness more of job changes, an evolution of the recruiter role, a focus on quality, and not only quantity, looking at untapped talent pools, nurturing that talent, and getting the best out of the raw talent that the rich demographic dividend of the country possesses.