To say 2022 was a wild ride is an understatement. We’ve seen the job market go from flaming white hot to fairly tepid.
High growth markets, such as the genetics space, have seen a correction from the blistering hiring pace we saw in ‘21 & the first half of ‘22. Looking back, it was clearly not sustainable as we routinely saw candidates getting 30%-50% salary increases. Similar to when the housing market gets overheated, at some point there had to be a correction. When money gets tight, i.e. interest rates go up, companies/industries that are years away from profitability have no choice but to cut back as they enter survival mode. Large shareholders/executives do not want to completely dilute their stake in a company by raising money in such a tight market. Given those dynamics, companies start conserving cash and that usually starts with payroll reductions.
If you’ve spent a large portion of your career in one of these markets, it can feel really bleak. There are few “job postings” out there and your phone is likely not ringing off the hooks with prospective opportunities.
However, all is not lost. We’ve seen a stable hiring environment in more mature markets and companies. Most of our “mature” clients are continuing to hire. These are companies that have been growing high single digit percentages for years. These are also companies that did not throw out crazy salaries to attract crazy talent during the 18 month hiring frenzy we just went through. Yes, they adjusted their salaries to be more competitive but they did so within reason and with a long term view on the market. Many of these companies are viewing the current environment as an opportunity to grab market share through expanding their commercial teams while their competitors are sitting on the sidelines or downsizing their teams.
One surprising outcome from all of this is many executives come to us still having a hard time finding talent for their team. While there are a lot of “feet on the street” right now, if your company is not in one of those high growth sectors, that is likely not the case. In a recent speech, the Fed Chair Jerome Powell shared their research showing the U.S. labor market is short 3.5 Million workers (2M from excess early retirees & 1.5M from working-age COVID deaths and reduced immigration). In a lot of healthcare niches, it is still a tight labor market. If you want ‘plug & play” talent and operate in a mature niche, you likely need to attract passive candidates within your space as the candidates applying directly to your company will likely come from other industries.
If you are seeking your next opportunity and not having much luck, don’t lose faith. Based on the conversations we’re having with executives across the healthcare space, we expect the job market to free up a bit in Q1. Be open minded and creative in your search. To use an earlier example, if genetics is where you have the most experience and where you think you provide the most value to the market, think more broadly about your background and the types of companies that could benefit from your skillset. Some questions to ask yourself include: what types of physicians have you worked with, have you scaled teams, worked in private equity, worked for an international company, built something from scratch, succeeded in turning around a business/team/region/etc. Bring these types of experiences to light on your resume so companies from other niches understand the potential value you could bring to their team.
We have seen some wild fluctuations in the labor market in the last three years. We expect the next few years to be more stable but due to the looming demographic changes of the workforce (mass retirement of the baby boomer generation with a shortage of replacement workers), we expect the fight for talent to remain fierce for years to come.
