So here's the thing. I'm going to do my darned hardest to scrub any USA politics from this and keep this zeroed in on recruiting. You people are bright and will get it. But please, even when you solve the equation, don't try rallying political debate below. I won't play.
Last night while walking the cockapoo, I was listening to the radio and a 50 year old man called the program to explain that his company insurance in Florida was increasing his monthly health care amount from $260 to $790, an annual out-of-pocket-and-paycheck amount equal to $6,000. This happens next August. He can't afford it and he dropping healthcare all-together. He won't have healthcare insurance after August, 2014, because the government cost for the lowest level plan was over $800 per month. He can't afford it.
Those who made it (reading this) to this point, I encourage you to take this text, cut/paste it, and put a meeting notice on your computer's calendar to pop up February 1, 2015. Why? Because we'll see if what I'm writing below will come true.
I am preparing my office for 2014. We operate in the automotive industry and we're a third-party boutique agency. Right now and for the past 24 months or so, this industry has been ripe with job orders (JO's) and the candidates have been scarce. Not an industry for the weak of heart. You spin around in circles working 5, 6, or 7 JO's that go nowhere for weeks. Pretty painful.
Here's my observations about what's to come. Indulge me while I turn some crazy ideas into a blog-post.
AS A HEADHUNTER, when I'm out there sourcing, I bump into different varieties of people and here's the basic breakdown (I'm going to use Greek letters to temporarily label them for ease of writing):
The "Alphas": These are poor people. They pay no taxes. They are unemployed. They are often mentally or physically handicapped and rely on government programs and charity. They are the unfortunate of our society.
The "Betas": These are people who are capable of work but don't for a variety of reasons. The result is that they often (but not always) utilize government programs for sustenance and existence.
The "Gammas": These folks are non-conformists. They may work. They may pay some taxes. They don't "believe" they are part of the structured society. They may pay some taxes to keep the government out of their lives and they are often in the skilled trades, blue-collar workers, or white collar workers. From a recruiting standpoint, it's very difficult to place these people.
The "Deltas": THESE ARE OUR CANDIDATES! They are contractors, blue-collar, white-collar, and salaried employees. For Deltas, work is part of life. Period.
There are roughly 1500 politicians in the USA who have made a grave miscalculation. Everyone from sea to shining sea has been force-fed years of platitudes on how to fix the Alphas, Betas, and Gammas. In fact, these debates have raged since the biblical days.
My fellow recruiters, whether corporate, HR, or agency, think about it. Think of that recent job offer that went out to a candidate who waffled over a thousand or two or four thousand dollars in annual income. I make no light of this. Salaries and hourly pay in job offers is serious business. It's often make or break for the candidate signing up. As recruiters, we often hold are breath during this decision-making process and each of you has your own tactic for dealing with that.
Next year in the USA, a HUGE PERCENTAGE of Deltas are going to see their disposable income DECREASE by $1,000 to $20,000, depending on their situation. This is all due to healthcare prices changing.
This train has left the station folks. And I'm incredibly sorry to sound cliché and here's my prediction: THE WAKING OF THE DELTAS IS THE AWAKING OF THE SLEEPING MONSTER.
What will be the natural rebellion of an engineer who, at a salary of $90,000 that translates to disposable income of roughly $60,000? What happens when the $60,000 turns into, for example, $50,000? So Bob gets a monthly paycheck of, after tax, $5,000. This changes overnight to $4,160. Bob is DOWN $840 per month to live on.
Bob, and his fellow Deltas, are going to grab their telephones and START CALLING US.
Prediction 1: Mark my words! Our phone's and e-mail are going to blow up. How are you to handle that as a recruiter?
These people, the Deltas, are going to be DESPERATELY ready to change jobs to find a higher salary. This will lead to vacancies at companies. Some of those vacancies may be secretly welcome with no replacement. However, HR teams are going to be grappling to fill key positions. Leading to....
Prediction 2: A market adjustment in salaries. What's it going to take to counteroffer to retain good employees? Answer: More money. Divide it up however you want. The company is either going to pay for the healthcare (if that's even legal...I don't know) to offset the increased cost. However, this can't happen in a vacuum...or in other words...just for an individual employee. It would probably have to happen, to some degree, company-wide. But I think that's not possible because of the meteoric affect to the bottom line (profit). So the safe way to retain the employee is by bumping their salary.
Prediction 3: Recruiters will be force to utilize their time wisely or perish. We will not be able to field this massive quantity of calls from desperate candidates. Recruiters who try to console "un-placable" candidates will burn up precious production time. Hence, they will fail. How do we handle the volume while maintaining integrity? I don't have an answer. (But I have ideas that we're working on now.)
Prediction 4: Salary will be King. As recruiters, we often deal with many factors in a candidate changing jobs including relocation, benefits, commute, and other tangible elements. My prediction is that in late 2014 and into 2015, candidates will take themselves into survival mode and be primarily and possibly exclusively "salary driven".
Pre-closing candidates by nailing down specific salary targets is a skill that every recruiter must need to master. Even if this is a standard practice that you do now, we know there is that critical "wiggle-room" factor that we have to exceed in order to keep the candidate from waffling. For employed candidates changing jobs, I believe, for the most part, lateral pay moves will disappear until after 2015.
In closing, if I'm right and our Deltas incur a massive hit in monthly after-tax expendable income, how passive will the Deltas lead their revolt? In the automotive industry, the monthly average cost of healthcare from our salaried, white-collar employees is right around $100 now. Again, that's monthly. So the annual cost is $1,200. Chump change, I would argue. IF this increased suddenly from $1,200 to $5,000, $10,000, or even $15,000, we are looking at the proverbial tidal wave white-collar mutiny.
How can I be wrong? Does anyone out there think that healthcare costs will maintain their present costs. And certainly there's no way costs will lower, at least in the automotive industry. I'll probably be flogged by the naysayers that my fantasies are rooted in exaggeration. Umm. I don't think so. Even one of the recruiters in my office has seen his spouse's healthcare go from $300 per month to over $900 per month starting 1/1/14!!!
The bottom line is that I'm predicting big changes and I'm looking into things around our office that may need a severe makeover. Everything is being evaluated. We are under serious review of our phone system, voicemail system, e-mail storage, databases and ATS, our scripts, and even our office security.
Please don't call me "Chicken Little" until February, 2015.