First, I want to extend my best wishes to all my friends, associates, colleagues, clients, and readers for a very wonderful year; fact is I think it will be! My long and sometime frustrating year ended with a nice vacation to Maui, which mentally prepared me to face what so far has been a very busy year.
I already can clearly see how many companies are calling me needing new hires, and how the pool of candidates is diminishing from previous levels. Fact is revenue for EDA totaled $1307.0 million in the third quarter of 2010, according to the EDA Consortium. Revenue was up 6.9 percent, and up 11.9 percent over the third quarter of 2009. They also reported that the four-quarters moving average also increased by 4.9 percent. That healthy report supports what I am trying to say, and it is absolutely in line with what I am seeing. Note that it was not the Consortium's reports that lead me to make this wild prediction.
Next let me state the obvious, over the last several years there were way more candidates looking than companies hiring. That is changing drastically and it is becoming harder and harder to find enough (perhaps more rightly said "qualified") candidates to fill all the positions out there.
As 2011 proceeds, I think it is clear that the paradigm will change and it will become increasingly more difficult for companies to find qualified candidates, as more and more folks find new opportunities. So what does this mean to the work force?
Hiring through the years goes in cycles, from companies having a plethora of candidates to choose from to companies looking high and low for good people. And it is the same dichotomy of results for candidates. As for my business, sometimes it is the companies begging me to find them good people; sometimes it is the candidates being choosy because there is more than one option available to them.
I think this is good news on several fronts, especially for the work force. As in the housing market, housing will not go up until there are less and less houses on the market to choose from, so owners can demand and get their price. Similarly, salaries will not rise until such time as companies realize that they will have to pay to attract the right talent. I remember back to my earlier days when I was a partner with the famed Bob Gold. At that time, companies were in the drivers seat, and if you wanted to work with them, you needed to do what they wanted because there was not enough business to go around. (As is obvious, this is quite similar to the recent past, and even still somewhat true, though to a much lesser degree). Then out of nowhere (hence the word cycle above) hiring boomed and companies were begging us to find them qualified people. The dynamic then was changing! We were able to raise our fees because our IP (candidates) were limited and because there were fewer candidates for us to place. We, as good businessmen, needed to maintain our revenue, and just like companies make you work for less during hard times, we got more in the good times. The part many (except of course for the companies) will really like to hear is that at the same time, salaries were going up as well…ahh for the good ole days, may they please come back, and come back fast.
I am hoping (in part) for everyone's sake that I am right. If I am, it means that companies are, and will, continue to hire as business comes back, and clearly the only reason they hire is because business is improving and expected to stay that way. Candidates will be happy because they can consider moves they earlier would not consider. Companies will need good people and even pay to get them. I will be happy because I will be making more money and just like all of you, isn't that the icing on the cake we all (well almost) all enjoy.