As we get to the end of H1, we find ourselves often being asked the same question. Is this a candidate or client led market?

Most search firms have seen a dip in revenue in H1 compared to 2022. As we approach July, many are now reporting more favourable trading conditions and forecasting is becoming more positive. Entering the last half of the year, any firms behind budget will pay more attention to cost and employee performance. 

Most search firms have seen a dip in revenue in H1 compared to 2022. That said, many are now reporting more favourable trading conditions and forecasting is becoming more positive. As we enter H2, however, those behind budget will pay more attention to cost and employee performance.

In a tougher market, there is a doubling down on business development from existing and new clients. With many sectors working in less favourable market conditions (especially those aligned to start-ups), firms seek to eliminate risk from their hiring processes. Invariably this means they go back to what and who they know best. For many, it’s a hard slog at the moment and they feel the pressure to produce results quickly.

These trading conditions force people into the market through redundancies/downsizing or a general exploration of what other firms can offer. Great news for someone looking to move people between search firms you may think, but the reality is that there are opposing forces at work. Here are our main observations:

1. A quiet market also affects your competitors

Most search consultants want to specialise; in most cases, their firm/client base demands they do. So when pushed into the market, their driver is to keep their functional or sectoral expertise. However, if you are being forced to look for a new role because of bad market conditions, your choice is limited. Those you have competed against are likely also to be feeling the impact. That creates a lack of available jobs, especially if an individual does not have a network they can commercialise.

2. The process of eliminating risk

In stricter market conditions, employers want to de-risk their hiring process. They want someone who ticks all the boxes. Candidates are the same; they want all their boxes ticked to ensure they don’t need to start looking again after six months. Those forces often conflict, and the two sides struggle to show enough empathy for each other’s plight. A happy ground in the middle is often unattainable. 

3. Misunderstanding the market for top talent

Whatever the market, the best talent will have options to consider. It is a mistake for firms to believe they now hold overriding power in the recruitment process after two years of a candidate-led market. If you combine this attitude with the desire to de-risk the process and increase the number of recruitment stages, you have less sell to the candidate. Unfortunately, slow processes will mean a failure to hire the best talent. Most markets also have a finite number of people within them; it’s not attractive to re-enter the market on multiple occasions with the same role. 

4. Misunderstanding Gen Z

So much is written about Gen Z that we won’t pretend to be an authority, but what we see, more than anything else, is that Gen Z are not career patient. Generations before were happy to build a career with the thought that their ultimate earning potential would be good after 10-15 years in a profession. This is not the case for Gen Z. They want success and high earnings as quickly as possible. They want to understand the progression opportunities and how structured L&D will support this. They want fulfilment, flexibility, and knowing they can achieve their goals with their next employer. Too often, senior leadership teams are guilty of thinking, I had to serve my time; they can do the same. But, to hire the best talent, you must embrace change and understand that different incentives are required.

5. What about diversity?

Understandably, when markets decline or become challenging, hiring managers reflect upon what has worked best. They look for carbon copies of successful employees and new team members can be hired on the wrong set of values /behaviours. Hiring managers want to feel comfortable and safe, rather than who can do the job. Not only does this cut down the talent pool, but it also reduces diversity and once a company loses diversity they will find it very hard to get it back.

So is it a candidate led or client led market? The answer we feel is simple; the firms with the most successful talent strategies and the candidates who can pick their roles out of choice don’t even think about this. 

Candidates with clear ideas on where they want to be in the future, how they want to get there, who network, show ambition and are willing to leave a good impression will succeed. Equally, those firms who understand the process good hiring has to play, are culturally aligned to today’s demographic, are agile, embrace change, show some empathy, and never stop engaging good talent will not struggle to attract the best talent. 

Dan Flynn is a Managing Partner at Dryden Search. To discuss the market now or in the future please contact df@drydensearch.com