A Game of Two Halves....

Opening Note: Hello and welcome dear readers, those of you reading this today will likely still be full of hot dogs, burgers, beer, and newfound disdain for your in-laws. Gotta love a Tuesday Independence day.

As always, thank you for spending some time to read my recruitment rambling, I've been getting great feedback on my Newsletter so far, I really appreciate you all engaging. As of this edition, we're 600+ readers strong, with a solid portion (40%+) of those being senior leaders in the industry. I am humbled!

Intro: "A Game of Two Halves":

For the brethren and sister...en(?) from the left side of the great Atlantic pond, this is a popular idiom referring to the game of Football (Soccer) which, quite famously, has two halves. The sentiment being that regardless of what occurred in the half prior the second half is a natural point of reversion, where things refresh and begin anew.

Given this publication is due to be dropped in the first week of H2 2023, I thought I'd capture the low hanging fruit and not only capture it, but dive into it with vigor. So here we are.

Halftime Team Talk:

I'll be honest, this first half of the year was a tough one for the industry, across the board, but also for recruitment specifically. For us personally it was actually quite strong all considered, but it's no secret it's not what it was. Which isn't necessarily a bad thing when you look at how hot inflation was running for the last couple of years, what goes up must come down, every action has an equal and opposite reaction etc etc.

Tough times should come as no surprise, with the massive lay-offs across the sector, consistent rate increases, along with quantitative tightening on a macro scale, it's to be expected. However, I would argue the biggest issue with the recruitment market isn't any of those factors, the biggest issue is a more human one, the increase of indecisiveness. So we'll start there.

Increasing Indecision:

We had our Monthly sales kick off for the whole group this past Monday, and there was some interesting data posed by one of our C-Suite. Where he identified two main trends in H1 of this year that are negatively impacting fee generation:

1) Clients stretching out interview processes, due to fear of expenditure.

2) Candidates apprehensive to move/accept offers, as it's a "Bad" market.

At a surface level, this is economically motivated, but the underlying trend here is what I've noticed being an increase in the culture of indecision. Firms not knowing what they should hire, and candidates not knowing what they should join.

Every candidate is interviewing everywhere they can, because they're panicking and need a job, which leads to them dragging clients on if they're the top pick. Conversely, clients are lacking urgency because there's so many "options" on the market, leading to analysis paralysis.

Now with more context, it seems all the more obvious the driving force behind indecision is human and not financial. Let's dive deeper on both fronts:

Hiring Firm: Why is a slow process lowering your offer Acceptance Rate?

Remember over the last couple of years, when hiring was aplenty, offers were flying out left and right, you kept losing good people to competitors, so you started moving through processes with purpose? Do you remember how much easier it was to have offers get accepted when that happened?

Now we're back to square one. I've personally/anecdotally seen processes go from 2-3 weeks to 2-3 months. It's complete insanity. As someone who helps manage these processes for a living, I cannot begin to explain how much a long drawn out process, with sporadic feedback cycles, kills candidate enthusiasm and thus, the likelihood of offer acceptance. But, I'll try:

Imagine you're 18 again, you're a freshman in college, you just met a cute boy/girl in Calc 101, had a great conversation and exchanged numbers. You talk sporadically, on and off. There's no real purpose in the conversation, just a general assumption you'll be hanging out soon, even though you continuously incline you'd like to take them out and see them again. They "Keep you warm".

8-9 weeks go by, then, finally they ask you out for dinner. Are you excited? No, you're not. Intrigued, maybe, but about a week ago some real cool person in Algebra starting talking to you and you're seeing them soon, super excited for that. So you want to see how that goes first before meeting up. Even though, in a vacuum, the person from Calc 101 was probably more exciting overall.

Does it make a bit more sense now? As the saying goes "time kills deals". No firm is interesting enough to keep an excellent candidate engaged for 2-3 months. A long process is actually counterintuitive if you want to hire top talent.

By design, top talent are the most sought after, which means someone will move fast if you don't. So you're actually screening the best people out of your process by dragging. As generally the best people will get scooped up when you're still testing the market.

Person Interviewing: Why is managing multiple processes affecting your ability to make a decision and take an offer?

This one is a bit more nuanced, in theory, you should be maximizing your chances in a new opportunity. That means, interviewing with a multitude of firms, at a multitude of levels and comps, with a multitude of cultures. The hiring firm is doing the same right? So why shouldn't you? Well, it's not the simple, a plethora of choice isn't always a good thing. I would argue, it's actually a bad thing in most cases.

No firm is going to be perfect, and if you think it is, then you haven't looked at it hard enough. Every business has issues and does dumb things, has toxic traits, annoying colleagues, bad coffee etc etc.

You can sit there and find an issue with every single firm and every single process, which is what a lot of candidates do. So they keep interviewing, comparing everything; "Well, this firm has X." "Oh! But this firm has Y, but what about their Z!?"

Every firm you speak with is additional noise in your decision making process, it's going to affect your ability to make a clear decision and distract you. You're doing yourself a disservice, because every flaw a firm you speak with has is being held to a magnifying glass, by another firm that doesn't have that flaw, but has others.

So what happens? You're less excited for every firm because you have loads of other options, the greats becomes the goods and the OK's become the bad's. Firms and leaders interviewing can feel this is a mile away through a process. So, while you think you're slick "Playing the market" the recruitment team and leaders are discussing it in-house. This is how the conversation usually goes:

Leader: "I like Sandra, she has the experience and she's a great culture fit, but something feels off with her, she doesn't seem overly enthusiastic, if that makes sense?"

Me: "Yeah, I feel the same way, my gut is telling me she's speaking to loads of places and is testing the waters more before she fully commit's to anywhere."

Leader: "Yeah, that would make the most sense. Well, with that being the case, put a pin in her for now, let's speak to John and Ashley next week to see how we feel about them after".

Next week, Ashley comes in and absolutely lights the place up, she brings her A game, she asks really thoughtful questions and the leader see's her working in the firm before she even leaves the interview. They verbally offer her later that evening and she immediately accepts. Sandra is now just another random applicant, when a week ago the job was hers.

I deliver the news to Sandra, at first she's ok with it. However, two weeks go by, and the other opportunities don't pan out, they really aren't the right fit. She looks back to the firm a few weeks ago, how cool the product was, how great the team and the office were.

But it's too late, Ashley just started and now Sandra is back at square one. This happens all the time, and it's all down to indecision caused by other opportunities.

Disclaimer: Now, don't only speak to one firm. My recommendation is Research 8-10 yourself, screen out 4-5 that way and stand true to your decision. Then do intro calls about 4-5, then continue in the process with 3-4. This is much more manageable and will give you a better baseline of comparison. Then, once an offer comes in, if you're 75% happy, just take the job, back yourself and your judgement. 9/10 times you'll be happy you did.

Conclusion on Indecision:

Ultimately, there are firms hiring and people looking, but the real killer is indecision on both sides. If you're looking for a job, be ready to take a job and have realistic expectations. When in a process, instead of thinking whether you should take the job, think how you would feel if you missed out on it.

If you're a client hiring, have an idea in your head or on paper of what the dream hire looks like, and then knock off some points for what your hire NEEDS. Then the moment you meet that person, offer them the job. Don't spend weeks comparing or having them speak to more people, trust your gut. Instead of thinking if the person is perfect, think to yourself, can I let my competitor hire this person? How would I feel if that happens?

From either side, if you properly commit your time and energy into something, approach it with a positive growth mindset, it will be beneficial to both parties. A 7/10 hire or a 7/10 job is still above average.

Firms that have caught my eye:

ActiveViam:

"For over 18 years we have provided the world’s leading financial institutions with a fully-flexible data aggregation and analytics platform. Our solutions continuously calculate risk and performance metrics on large volumes of fast-moving data, revealing greater insights that empower our clients to make better business decisions, optimize their profits and manage their risk."

This is a firm that's been around for a while, and was founded by old Misys Summit staff. It's about as trading tech as it gets. What I like most about this firm is it solves complex problems, at scale, and is a full suite data solution. Firms like this have a natural moat due to the complexity of their solutions, which in an economy like the current, let's them flourish.

Any data centric application that automates process while lowering risk and improving profit probability is a win in my book.

Capitolis:

"Our vision is to reimagine how capital markets operate. Capitolis is the leading capital marketplace that drives financial resource optimization for market participants.

Founded in 2017, Capitolis’ technology enables financial institutions to optimize their resources, execute seamlessly with new market participants, and achieve greater access to more diversified capital, all of which enable fairer, safer, and healthier capital markets.

Backed by world class venture capital firms, including 9Yards, Andreessen Horowitz, Canapi Ventures, Index Ventures, Sequoia Capital, Spark Capital, SVB Capital and S Capital, as well as leading global banks such as Citi, J.P. Morgan and State Street"

Another interesting solution for a complex problem, Capitolis provides solutions to help create diverse and more risk averse financial structures for investment firms when for capital origination.

Conclusion: The Second Half kicks off and it's all to play for

So overall, the first half was a similar story throughout, but as discussed above people on both sides are making excuses blaming macro-economics when in reality it's just them being indecisive.

It's a tale as old as time, the idiom "Never waste a good crisis" comes to mind. People using a reason that's widely accepted as reasonable, although the truth of it is they just can't make up their mind.

So if you are to take anything from this, aside from my incredibly varied pool of memes and GIFs. It's that you need to start being more decisive when hiring or looking, not just you, but create an environment where people have to be more decisive. Tell the candidate this is the expected timeline, this is when you'll make a decision, this is what you want to see. Tell the hiring firm what you want in your next role, when you're planning on making a decision, the type of firms you're looking at, what their process looks like.

In a market rife with with indecision, operating with purpose will make you stand out above everyone else. Take control of your destiny!

The next addition of this will be more Hedgefund centric, so keep an eye out for that. Take care and all the best.

Cheers,

James