By: Bill Wednieski
If you’ve known me for a while, you’ve likely heard me use this phrase in both professional and personal situations. It’s one of my favorites. During every March Madness basketball tournament, there are upsets. This year during the men’s tournament, the #16 team Fairleigh Dickinson beat the #1 team Purdue University. This was just the second occurrence in tournament history where a major conference champion, Purdue, had fallen to a small school, Fairleigh Dickinson, that incidentally entered the tournament with 15 losses. Reality set in for Fairleigh Dickinson in round two, when they played another small university, Florida Atlantic and lost. Water always finds its level.
In sports, any team or individual athlete can play nearly flawlessly and beat a far superior team. But can the underdog continue its run or does it eventually revert to how it played its previous 30 contests? What would happen if Purdue and Fairleigh Dickinson played a seven-game series? I’m almost certain that water would find its level and Purdue would not lose again. Not even once. (We will never know because in March Madness it’s one and done, baby!)
What does this have to do with work?
Candidates have enjoyed the upper hand over employers since late 2020 as business boomed following Covid-19 lockdowns and talent became more and more scarce. For a two-year run nearly every single candidate we worked with that countered an offer to request more money had their request honored. Then, in late 2022 the tables turned a bit. Profits started to dry up from inflation, the supply chain woes, and the economy was turning – or at least the perception was that the economy was turning. Executives and shareholders collectively began to take the opinion of, “enough is enough.” My conversations with employers started to take a different turn and budget reality and fiscal discipline entered the discussion. We had five or six offers turned down. We also declined to even present a lowball offer, which is a blog topic for another day. Today, water has begun to find its level in the candidate vs. employer market.
What do the polls say?
We’ve found that polls on LinkedIn are an easy and convenient way to gauge market trends. A little tip for LinkedIn users, if you have personally never voted in a LinkedIn poll, unlike real elections, you only get to see the results if you vote. Recently, the results of two polls we posted really surprised me –
The annual inflation for the last twelve months ending in February 2023 was at 6%, so it blew my mind that more than two-thirds of employees who participated in our poll personally have wages that are not keeping pace with inflation. My theory is that companies had to overpay to keep or entice talent to join them for the past 24 months. Another observation this poll showed me is that companies are calibrating. Did you really think retention bonuses and twice-a-year raises were a sustainable practice? And once again, water is finding its level on raises and candidates are coming back down to reality.
Next, this poll showed me that more than 50% of employees have toned down their expectations. Again, not what I expected to see. First, I was honestly anticipating that our audience would expect the good times to keep on rolling. Second, I was expecting employers to still feel they needed to continue doling out raises to retain employees.
Recently, a candidate informed me that they only received a 0.8% raise for 2023, and he was pissed, to say the least. I asked the guy if he remembers that he countered when offered the job in early 2022 (we did not place him, but he did seek my advice on countering). The employer came up with nearly 5% more than their original offer. Plus, the company needed to offer the guy a 15% raise to entice him to leave his previous employer. I advised the candidate to change his perception and shared that I recently placed an engineering candidate with a more prestigious degree and more years of experience for 10% less than this candidate was currently earning. I gave him some more fine advice and told him, to “suck it, buttercup.” I candidly explained to him how water was finding its level within his own company. Though I am not declaring an end to the candidate’s market; not even close. The fact is that there are still way more job openings than candidates to fill them. And, our firm is in the market every single day, and on many searches, we frequently cannot find even one qualified candidate open to making a move.