When the economy is going through a period of very low unemployment, companies need to compete for scarce talent. New research has shown that in the current labour shortage conditions there is a growing mismatch between what employers are offering and what the young talent they want to hire might be expecting.
This is one of the key takeaways from the World’s Most Attractive Employers 2022 report from the team at Universum. For this study, the researchers surveyed over 185,000 business, engineering, and IT students from across nine of the world's largest economies from September 2021 to May 2022. Participants were asked which employer characteristics are most influential as they consider future employment, and which employer brands they most admire.
The goal was to determine which employers the students hold in the highest regard and what factors most influence that choice.
Across all groups of students surveyed, compensation is a growing priority for them as they consider their career options. Similarly, work/life balance and flexible working conditions have both bounded quickly up the attribute preference rankings to become significant priorities.
In both Canada and the US, quality-of-life factors rank in the top five priorities for young workers.
Although the students expressed having an increased focus on high pay, flexibility, and work-life balance, the Universum survey suggests it is actually rare to find a company that offers all of these at the same time.
A small group of Big Tech companies comes the closest. The perception that Big Tech offers both high pay and quality-of-life benefits is no doubt one of the reasons they continue to dominate the employer rankings across all student groups. Regardless of industry, the top three most attractive employers for the survey participants were Google, Apple, and Microsoft.
The top ten employers for business students
- Apple
- Microsoft
- Amazon
- L'Oréal Group
- Deloitte
- JP Morgan Chase & Company
- Goldman Sachs
- EY (Ernst and Young)
- KPMG
For engineering and Information Technology students, Google, Microsoft, and Apple also make up the top three most desired employers.
While these organizations do offer high pay and flexible working conditions, there is also an expectation that team members be up for a fast-paced, challenging working environment. And this is where the expectations between candidate and employer tend to misalign.
When asked to rank their top priorities in a future employer, young people were less likely to choose challenging work in 2022. That factor dropped 2.5 places in terms of relative importance, the largest one-year drop in the survey's findings.
This general trend was also reflected in the increasing number of students who say that they are looking for a combination of job security and work-life balance rather than challenging, high-performance work.
This lower emphasis on challenging work and/or high performance could be seen as an
extension of "quiet quitting." This is the recent trend of people who feel undervalued at work expressing their dissatisfaction by putting in the strict minimum amount of effort – rather than going "above and beyond" as their employer might expect.
The trouble is, the companies that young people most want to work for are also the most associated with high-performance workplace cultures. In a recent study of roughly 500 employers about what they look for in new hires, the top sought-after aptitudes were all about the workers' ambition. They want to hire hungry, dynamic go-getters. Participants said that "drive/work ethic" and the "ability to take initiative" are the top attributes they want to see in candidates.
So, whether the students surveyed are looking for a less demanding work life or simply a healthy balance between their work and their personal life, the reality is that the working environment they seek usually comes with higher performance expectations.
This means that many companies will need to carefully craft their employer brand messaging to communicate not only what potential recruits can expect to "get" from their employer, but also ensure that candidates are realistically informed about what they are expected to “give” in return. Otherwise, new hires may find themselves entering a working environment that does not match their expectations or desired lifestyle.
While the Big Tech brands such as Apple, Google, and Microsoft will likely be able to recruit the talent they need regardless of labour market conditions, smaller or lesser-known organizations are feeling the crunch.
Many companies are anticipating hiring slowdowns and cost-cutting measures for 2023, which makes it increasingly challenging to be generous with both compensation and quality-of-life benefits. And while salary is a top priority for students considering their career choices, there are some troubling signs on the horizon.
A separate study from Mercer found that US employers are planning average pay increases for 2023 of 3.8 percent. While this is up from the average of 3.4 percent offered in 2022, these increases don't keep pace with inflation, which is likely to generate dissatisfaction among employees.
One of the top pet peeves of job seekers right now is a lack of clarity in job descriptions. Candidates want to know upfront when they apply what the details of the role are and how much it pays. To compete in tight labour market conditions, employers need to clearly communicate their expectations of new hires from the outset and consider offering flexible work, hybrid and remote options, and as much of a healthy work/life balance as can be reasonably accommodated while still living up to the demands of the position.
