The Hiring Market Sucks, But Old-School Employers Are About to Get Left Behind
I've got some good news and bad news this week (but mostly good).
The bad news: The market for job seekers sucks right now ??
I'm hearing it directly from my subscribers AND seeing it in industry news.
And for the people who get lucky enough to get responses to their job applications, I'm hearing stories about them going through six rounds of interviews, giving away FREE projects that take considerable work, and attending in-person, all-day leadership panels...
And STILL not getting the job. Weeks of life and energy wasted.
It's rough out there.
Case in point: Check out this crappy looking report on employment trends:
Yeah, that chart looks downright TERRIBLE. Down and to the right always sucks.
But, there is good news.
Actually, there are TWO big pieces of good news. Let's talk about them.
Good news #1
The hiring market is VERY cyclical, and we're possibly going through the eye of the storm.
Look at the ups and downs we've seen over the past 40 years:
You can count on cyclical trends doing their thing. This isn't unusual and it's NOT permanent.
But what that means for job seekers is that companies currently have the upper hand.
It means they get to be very choosy about the candidates they're interested in, which is one of the reasons why job seekers are having a hard time getting responses to their applications.
It also means that cyclical trends are just that: Cyclical. They change.
It means this chart COULD look something like this in the next five years:
So hang in there and keep plugging away, historically speaking, things have always turned around.
Good news #2
Companies are understanding that treating their employees well is ACTUALLY in their benefit.
Who. Would. Have. Thought.
But what does "treating their employees well" mean? That statement may mean many things to many people.
For some, the bar for "good treatment" may be as low as not having to ask for permission to leave their computer for a moment (true story).
The only way to know what something so subjective like "good treatment" actually means is to look at lots and lots of data on what companies are offering employees in terms of perks and autonomy.
Which is exactly what I've done.
Over the past few years I've looked at thousands of careers pages and job listings and created a database of the 250+ of the very best companies. And I've collected LOTS of data on each of them.
The most prominent theme that has emerged through this research is that the top progressive companies are taking an "employee-centric" approach to their business model rather than a "revenue-centric" approach.
WTF does that mean?!
I'll explain.
Revenue-centric models
Old school companies that take a revenue-centric approach see employees as a means to generating profit, like a machine in an assembly line. All operations are built around and optimized for that model.
In order to keep that kind of machine running, they need a lot of rules enforced on employees to sustain the outcomes the companies want.
You might recognize a few of these:
The list goes on, but most of these aspects come down to one simple concept: Control.
Now, that model can and has worked for years, so technically it's not "wrong."
Without getting deep into the rabbit hole of morality (which I have strong opinions on), we should instead just ask: "Is this an optimal model?"
Probably not.
We're starting to see that humans simply aren't optimally incentivized through control and fear. It does "work", but not well. A potentially stronger alternative is an employee-centric model.
So what does an employee-centric model look like?
Progressive companies taking this approach believe that empowering and trusting their employees results in them being more dedicated to the company's success, taking full ownership over their lane, and not leaving the company.
They're playing the long game.
Now don't get me wrong, the leaders of these companies aren't sitting around a drum circle in a collective hoping love and happiness will put food in everyone's bellies.
They're realistic about the way of the world, and capitalists through and through. These companies exist to generate profits to feed themselves and their employees. These moves are very calculated.
The difference is that they're playing the long game. They're putting their pennies in the bank by investing early in employees and waiting for the long-term payoff.
There is no better example of this in action than what you'll see on Conversion Rate Experts careers and company culture pages.
If you're wondering if this is just an idealistic pipe dream, consider the following statistics:
When you look at these bullets above as an organization head, think:
All in, companies with happier employees are ~21% more profitable.
This is a tough concept to swallow for old-school execs. In many ways, it's counterintuitive. You have to give up control to gain control. They have to learn to manage to results rather than through attendance and control.
Because attendance doesn't matter, results do.
Old-school execs need to trust their hires to do what they need to do. And that scares some of them, for personal and professional reasons.
It threatens their complete belief system of what creates value in an organization. It may threatens their job security, exposing how little value they create. It may threaten their egos and sense of self-importance.
These people want butts in seats and fingers on keyboards.
This way of thinking is still pervasive and brazenly ineffective.
On the complete other end of the spectrum, you have companies like Toggl who say:
I'm sorry but the above makes too much damned sense.
If you're an employer and think that you would rather have your employee pretending to work the additional 10 hours per week to hit the magic number of 40, I ask you, why?
So what are the best companies offering to attract the top talent? Let's take a look.
Perks I'm seeing offered to employees
?? Flexible hours: Letting employees work whenever they want for as many hours as they need to get the job done. Here's a blurb from the careers page on Toggl I found the other day:
?? Workspace stipends: Companies are paying their employees to buy the office equipment and laptops that will make them more comfortable and productive. Here's a good one from Automattic
?? Health and wellness stipends: Companies are giving employees money for gym memberships, meditation apps, massages, etc. Here's one from Doist
?? Paid learning stipends: Companies are giving employees unlimited book budgets, paying for courses and conferences. Here's one from Ghost Foundation
?? 4 day work weeks: Fridays off, every week. Here's what Knowledge Futures and Piktochart have to say:
??? Unlimited vacation: Requires no explanation. From Adalo
?? Asynchronous work: Letting employees work from any timezone and communicating with coworkers via Loom, Slack, and other asynch tools. From Mindbloom
Of the 250+ companies in the database, here's the prevalence of these perks (all of the companies let you work fully remote):
These perks are popping up more and more as I continue to review new companies. (Also, I'm tracking 19 unique perks, message me if you want to see the rest.)
What's in store for the future
We can only speculate on which aspects of an employee-centric model eventually takes and which don't, but we can say for certain that companies are actively exploring new ideas. In my opinion, it's too logical to fail. Reward-based incentives always triumph or punitive-based incentives.
This feels A LOT like the Uber versus taxi battle from a decade ago...Uber just made more sense.