As 2011 winds down, it seems only fitting to look ahead to 2012 and highlight key trends for those who are hiring and executives who seek to be hired. We are not alone in gazing at the crystal ball. Googling the term “hiring trends for 2012” yields over 3 million results, many of which confirm what we have already observed in the fourth quarter of 2011.
1. Companies are hiring and recruiting. Companies who have postponed hiring for executive roles in 2008-2010 have begun retaining search firms and beefing up their staffing function. Look for this trend to extend to smaller companies who previously avoided hiring to preserve capital out of fear that a hiring mistake at the executive level could be catastrophic. The company that said “we would rather have a B-player rather than risk hiring someone who turns out to be a C-player” will no longer want to settle for the B-player. Additionally, expect to see executive-level positions open due to an increase in retirements. Many executives who postponed retirement because of a deterioration of their nest egg will see it rebuilt enough to pull the trigger.
2. An increase in contract positions. Many companies under headcount constraints or who are uncertain about their future business prospects will look to hire senior-level people in contract roles. While professional contract employment has long been a practice for information technology positions, it will spread to other sectors such as compliance, regulatory, financial and other project type positions. Look for businesses to convert contract employees to full-time as confidence and hiring continues to build during the year.
3. Compensation will look different than before. With the increase in competition for high performing managers, companies looking to retain top talent will be more likely to hand out larger salary increases to keep their best people from considering all the new options presented to them. Companies recruiting external candidates will find that candidates are more interested in the cash portion of the compensation package rather than what turned out previously to be (the illusive) incentive compensation. Similarly, executives who are changing companies will be more interested in job security and what the employer can provide in the way of contracts, guaranties etc.
4. Old positions with a new twist. New positions combining old positions. As confidence grows in the economy, companies will be bolder in how they think about their business and future challenges. Many traditional positions require the same skills, but now demand that candidates must have proven experience as a change agent or have experience restructuring or rebuilding a function. Similarly, positions that were common in one industry will migrate to other industries. For example, many law firms are now seeking senior-level managers in Business Continuity, Business Development and Practice Management and specialized information technology positions. Similarly, companies who once hired only attorneys for certain compliance positions are now separating compliance from legal and creating positions that no longer require a JD.
5. Global experience required. Demand for professionals with international experience – especially in areas such as staffing, finance or law – will continue to intensify as companies continue to expand globally. We’ve seen this to be the case already in 2011, particularly in the human resource function. HR executives need to be able to manage a diverse, dispersed, global workforce now more than ever.
As mentioned above, many of these trends started to emerge in late 2011 and they should continue and build. Why the asterisk in the title? Looking into a crystal ball is a risky business. So here is our qualification. We have seen in 2011 how the ongoing Eurozone crisis has had and can have huge implications for the US economy. The Presidential election may create uncertainty based on who wins and what changes they will make. Moreover, so much of what happens in hiring is dependent on confidence. We have seen in the past how a crisis of confidence can wipe away gains in the flash of an eye.
Our view of 2012 is optimistic and we believe (and hope) it is correct. In that spirit, let’s raise a glass and toast the improving economy.
Happy New Year from all of us at The Alexander Group!