Dr John Sullivan Talent Management Thought Leadership

This Inflation Caused Recruiting Opportunity Explained

Over the last few years, during the “great resignation,” recruiters have been blessed with the opportunity to pick from a large talent pool who were eager to quit for a better job after the frustrating Covid lockdown.

However, over the last 2+ years, inflation has made it difficult for the average employee to pay their bills on their current salary. Rather than providing their employees with chances to earn more due to corporate belt-tightening, corporations have actually cut back on the available opportunities for their employees to earn a little more money.

Corporations consciously reduced their employees’ chances by using salary and promotion freezes, reducing work hours, and limiting overtime. And with no relief in sight. Now, up to 50% of a company’s lower-paid workers may now be willing to leave for a new job that merely pays enough to cover inflation. 

This willingness to leave has created this latest great recruiting opportunity. I label this opportunity as hidden because few hiring managers and even fewer recruiters are aware of it. Fortunately, there is a way for smart recruiting leaders to take advantage of this suddenly expanded talent pool. I call that strategy “the Beating Inflation Strategy” or BIS.

The Foundation Elements Of The “Beating Inflation Strategy” (a.k.a. BIS)

The foundation elements of the BIS strategy that I recommend include: 

• This new and unique recruiting opportunity only occurs after at least a year of high inflation. And after corporations lag in their effort to provide employees with more pay to cover inflation.
• This large recruiting pool includes top employees who only recently have become frustrated – your recruiting targets are currently employed people. These have proven valuable because they have survived their company’s recent layoffs. Fortunately, you should expect to find many of these potential targets.
• Compensation expectations have changed dramatically – recruiters need to understand that today. Compensation expectations (which have always been important) have just recently become the #1 attraction factor. The one where employee/candidate expectations have changed the most.
• The primary attraction factor is offering enough money to keep up with inflation – for recruiters, the “more money” that these candidates seek is only enough to allow them to stay ahead of inflation. Inflation covering the amount they expect in a new job is seldom more than 5% of the candidate’s current salary. 
• You will face minimal recruiting competition – because most recruiting leaders are still unaware of this emerging opportunity. You will likely face only minimal competition from your traditional talent competitors. And your competition will target a completely different talent pool (the unemployed). So, the candidates you are targeting won’t likely be on the radar of other recruiters.
• Most of your recruiting targets will be eager to leave – of course, most of the frustrated employees you are targeting will have looked internally first for “more pay” opportunities. However, when they find that most of those internal opportunities have recently been eliminated, that may cause these employees to feel that they are being pushed out, and that feeling will make these employees even more eager to leave. 
• Convincing them to yes will be the most difficult recruiting component – because your employed recruiting targets already have a job. They will stay in their current job if you don’t make a compelling argument.

For Those That Decide To Implement A “BIS” Recruiting Strategy

Implementation Action Steps That You Should Consider

It’s true that because of budget cuts, little has changed over the last several years in the recruiting processes at most organizations. So, in today’s complicated world of talent management. You can only expect to generate great recruiting results once your recruiting leadership changes its current recruiting process. That new process must be tailored to take advantage of this “inflation-created opportunity.” If you are considering implementing this BIS strategy, the highest-impact action steps that you should consider are listed below.

• Focus on currently employed candidates (and not the unemployed) – under this strategy, your primary recruiting target will be the currently employed who want a little more pay. You target them (instead of the unemployed) because those currently working are much more likely to have updated training, skills, and experience. This strategy allows you to stand out because 95% of your talent competitors will target a completely different recruiting target, the unemployed candidate. 
• Prioritize and then focus on candidates that work in jobs highly impacted by inflation – this recruiting approach doesn’t attempt to treat all jobs equally. Because those who work in some jobs are less affected by inflation (i.e., most well-paying, executive, and management jobs). In many cases, those most affected by inflation will be hourly or part-time jobs. Then, focus on any broad job families that are typically underpaid (i.e., those in customer service, call centers, and retail).
• Look for creative ways to increase the salary for your open jobs – it’s a mistake to assume that nothing can be done internally to raise either your salary ranges or your salary offers. Instead, work with your own compensation experts to ensure that your job analysis and salary surveys for each targeted job are up-to-date. Also, thoroughly explore whether job enlargement, a periodic COL adjustment, or adding advanced skills might allow you to offer more inflation-canceling money to your recruits. 
• Treat your employed candidates gingerly because they can simply stay where they are – when approached, many of your currently employed recruiting targets will quickly become active candidates. Even though they might actively pursue an open external job opportunity, most won’t be as desperate for any job. This is because these currently employed candidates have multiple choices. In some cases, they will need to be treated like non-active job seekers, which means they may have to be convinced to apply formally. Candidates may need to be shown early on that your opportunity for more pay is real. And, they may also need to be completely sold that your new job will meet most of their additional job expectations (i.e., remote work, no burnout, more job security, and learning opportunities). Finally, you will need to provide each employed target with a positive candidate experience that contains no errors. A negative candidate experience will likely cause them to stay put.
• Target each of your talent competitor companies with low pay percentiles – several companies in every industry are known for routinely paying their employees below-average salaries. And because these employees are already lowly paid. In many cases, it will be easy for you to offer them a higher salary than they currently receive. So, work with your recruiters and compensation professionals to identify each of these low-paying organizations. Then, proactively target each of the low-paying companies that are also known to have high-quality talent.
• Target retirees because they will be eager to learn about “more money” opportunities – because you can be almost 100% certain that both the already retired and those approaching retirement are already fully aware of the impacts of inflation on retirees. This is because this older population is usually quite large. You should specifically focus a portion of your recruiting on it. And that could mean using “close to retirement” sources (like AARP) to get their attention. Finally, you should also encourage your older employees to make referrals from among their older external colleagues.
• Emphasize employee referrals – unfortunately, there is no central recruiting source that lists current employees who are seeking jobs that pay more. So, to identify these recruiting targets effectively, I recommend that you focus on employee referrals. Do that by educating your entire workforce on who you’re trying to attract. Next, you must tweak your existing employee referral program so that it quickly identifies this type of candidate. Encourage your employees to look for colleagues who have either recently been denied a raise or have publicly complained about needing more money due to inflation.
• Be sure to offer them “right now” guaranteed money – incidentally, these candidates don’t actually want more total compensation. Instead, they need more cash to spend today. So don’t expect much of a positive reaction if you instead offer them “maybe later,” not guaranteed compensation (i.e., future bonuses, long-term benefits, or possibly added stock value). Instead, give your finalists more cash through a higher base salary or the promise of more overtime hours. Remember that you can also give new hires a higher salary when you offer them an opportunity to immediately move up into a “next-level job (and the higher salary that goes with it). 
• Make sure that your BIS recruiting process is data-driven – realize that for all modern recruiting processes to be effective, they must be data-driven. So, require that each of the important decisions that will be made at any time during this process be supported by data.
• Finally, work with your retention experts to reduce your internal turnover due to low pay – of course, your corporation will need to do much less external recruiting. Incidentally, delayed exit interviews are the best way to identify the real causes of turnover. Once you determine that inflation is a primary cause of your turnover, work with your retention staff to proactively reduce your “need more money” driven turnover.

Also, consider these additional (but less impactful) actions that might make a difference.

• Include accurate salary ranges in your job postings – in the jobs where you actually pay more than most. Make it easy for employed potential applicants looking for “more money” to learn the compensation range for each job easily. Include the salary range in your job postings and website job descriptions. And in the cases where your benefits are powerful. Show your currently employed candidates your benefit coverage in healthcare, commuting reimbursements, and student loan repayment, which will also likely save them significant pocket money. And in the cases where a candidate will have to relocate. If there is a lower cost of living there. Show them how their relative pay will actually be higher in this low-cost-of-living area. 
• Realize that because you are recruiting employed candidates, you will receive some extra benefits – because you are hiring currently employed individuals, there are other benefits that your executive should know about. The first is that by hiring talented individuals away from your competitors. Not only are you gaining talent, but at the same time, you are directly hurting their capabilities. Also, realize that by recruiting the currently employed. Each new recruit will also bring along with them the best “next practices” and the latest ideas from your competitors. 
• Ask each top candidate what “more money” means in dollars – don’t be subtle about meeting a candidate’s requirements. Instead, directly (before the first interview), ask each candidate to directly list their top five criteria for finding a better job. Although, in many cases, state laws don’t allow you to ask a candidate how much they are currently making. You can always ask them to provide you with their minimum salary requirements.
• Research inflation’s impact on your diversity numbers – in organizations where developing and maintaining diversity is a key goal. Have a talent manager leader assign someone to research whether your current recruiting approach is hurting your diversity ratios. And where those diversity hiring ratios would actually improve under this new “BIS approach. 

If you only do one thing – conduct delayed, post-exit interviews with a handful of your top employees who have recently quit. Use that information to determine to what extent inflation pressures majorly cause turnover at your company. Then, use these numbers as a “proof of concept.” And for estimating how large your talent pool will be at other companies you will target.

Final Thoughts

In my view, you must develop a competitive advantage in recruiting by being the first in your industry to develop this high-impact BIS recruiting process. And quickly because this BIS recruiting process will only be effective as long as inflation rates are high.

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