Anticipating Labour Market Trends with David King, Senior Managing Director at Robert Half

In this Snippets episode, David King, Senior Managing Director for Canada and South America at Robert Half—the world’s first and largest specialized talent solutions and business consulting firm—takes us on a deep dive into the post-pandemic landscape of talent recruitment and labor markets. Don't miss this opportunity to stay ahead of the curve and make informed decisions for your organization.

With an astounding tenure of 29 years at Robert Half, David shares his take on current labor market trends and predictions for 2024. He also shares valuable insights on talent decision-making factors and priorities, the dynamics of hybrid work environments, the impact of AI on the workforce, and strategies for achieving high levels of engagement in a workplace. Additionally, he highlights the advantages of adopting a six-quarter forecast strategy. 

If you’re interested in our Snippets podcasts or The Way Forward live webcasts, please take a moment and visit us at peo-leadership.com. Guests have included Stephen Poloz, Avi Goldfarb, Dr. Michael Roizen, Morgan Housel, and Professor Janice Stein. We’ve covered such topics as growth, uncertainty, mental health, leadership, the new world, and a host of others. 

If you’d like to learn more about our leadership community, please feel free to contact lgoren@peo-leadership.com. 

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Transcript

Special thanks to Robert Half for helping us bring you today's PEO Leadership’s Snippets podcast. Welcome to our Snippets podcast. I'm Leon Goren, CEO and president of PEO Leadership, North America's premier peer-to-peer networking and leadership advisory firm. Today, I'm very excited to welcome David King, senior managing director for Canada and South America at Robert Half.

Founded in 1948, Robert Half is the world's first and largest specialized talent solutions and business consulting firm that connects people with meaningful work and provides companies with the talent and subject matter expertise to compete and grow. In 2023, they were recognized as one of Fortune's world's most admired companies and one of Forbes' world's best employers.

They're a public company operating in over 400 locations with annual revenue greater than 6. 6 billion. David joined PEO leadership several years ago and is part of one of our advisory boards led by Ian Smith. David, it's great to have you with us today. 

Hey, Leon. It's a pleasure to be here. Thanks for having me.

So, I'm going to open this up because I'm going through LinkedIn and I see David King, I already know David, but 29 years at Robert Half, and I'm thinking, I've been working with all these leaders and I don't usually have someone who lasts more than 4 or 5 years. That could not be, maybe it's not good for us, but the typical average tenure, 4 to 5 years. 29 years in the recruiting industry. I was just like floored. 

Yeah, it is a bit shocking to me too, actually. And you're right. It's pretty unusual, even amongst my peers, you know, the reality is just before I got into this business, I did have a couple of shorter stints through different financial services organizations and I just didn't find the passion that I found until I got into this business of recruiting. I found the right home at Robert Half. And it's, uh, it's been a passion ever since. So yeah, 29 years in the same firm. 

You know, it probably speaks a lot to the culture. ‘Cause you were also telling me that some of your more senior executives have been with the firm 20 years as well, which is unbelievable.

Absolutely. Yeah. The guy who hired me, uh, just celebrated his 30th. He's still with us. My boss is over 30 years and the average tenure of my Canadian senior leadership team is certainly over 20 years as well of those dozen leaders I have in Canada. So we have the benefit of having great stability on the leadership team, great knowledge, and insight into the business. The passion still remains quite high for that group. So it's always good when tenure correlates to success. 

What do you, what are you feeling in the marketplace? Like we're coming to the end of the year. It's been a sort of a, a pretty bouncy year, a tough one. And I'm just curious from a talent perspective, what you're seeing as we close out the year and then curious also, what is the first couple of quarters of 2024 look like for us?

Yeah, it has been a very interesting year. Certainly. I mean, as we continue to experience economic indicators and headlines that suggest uncertainty still, although recent headlines suggesting maybe 2024 looking a little better by way of both inflation rates and interest rate practices by the central bank. We've got caution really on both sides of the labor market. We've got caution on company side because they're still a little unsure as to when things will stabilize for them and when they can possibly get into some growth mode. And then we've got caution on the employer side, because while we're getting a lot of insight from individuals suggesting they're ready to move to a new career opportunity and to a new organization. They're a little cautious because they don't want to move at a time of uncertainty for fear of being the last into a bad situation, because that typically means you're the first out. So there's, there's demand on both sides of the equation, but both are in a bit of cautionary mindset right now on decision making, and that's creating a little pause.

In the transactions in the labor market, that being said, we've gone through an economic cycle where unusually, though there's been a poor economic cycle, the labor market has remained pretty positive and the unemployment rate has remained relatively low, certainly in the professional spaces that we operate in finance, accounting, IT, legal, etcetera. The real effective unemployment rate is somewhere in the 2. 5 percent range. Not the five plus percent you're seeing in the broader market. So almost full employment in professional spaces. And so, as we see the economy moving to 24 and the anticipated marginal uptick and stability and possibly, therefore, growth-oriented decisions by companies. We do anticipate hiring will start to accelerate. With that, we will start to see individuals ready to make the move to new organizations. And we believe that's going to put a lot of pressure on the hiring environment. 

Once again,  going back, it's been what, about 12 months since we've seen that crazy, the talent war. Really, and everybody was in a panic. It drove inflation. Do you see the same thing coming back? Because it's interesting because wages are a big component of the inflation factor here. Indeed. So, getting to this talent war again, do you just see the thing again, reversing. 

We see it coming back probably quicker than most would anticipate there. There's still a structural challenge in the labor market, obviously, and there's limited talent out there for organizations to capture. So it's a very competitive landscape for companies to attract the talent they want. And we're doing it in an environment which has more factors involved for individuals than just compensation anymore.

I think what's been the reality of post post-pandemic labor market is that individuals have started to prioritize very different things in their world when it comes to which job I'm going to take. It's not just about compensation or career growth or benefits. But it's how does it impact my personal life? How does it allow me to prioritize personal and professional obligations in this new organization I'm about to consider joining? And so I think it's going to become very, very competitive and unlike maybe a decade ago, I think it's going to also become an emotional decision as much as it is one about compensation and benefits.

You know,  we talked a little bit about purpose and environment that people, these leaders are creating their, their firms. That is going to be 1 of the big factors a little bit more than, I mean, everyone's talked about compensations and really not the deciding factor. It's always come down to the people, your boss, the culture, and we sort of sit there and go, yeah, I heard the questionnaires, but is that really true? We saw the talent war compensation. People were flipping jobs all over the place. 

There's a theory that compensation is a factor till it's not a factor, right? And so, you know, everybody has their own sort of number in mind. And once they achieve the number, then all these other things become significantly more important. If you are in a situation where you need a financial number to be achieved, you may accommodate some other things in order to get to the number. But once you have the number, Now you're going to start to prioritize other things such as flexibility and ability to manage personal professional lives through through choice, maybe a little bit of remote work, etc. And so once you've got the financial obligation covered, now other things start to move up with regard to your consideration and your decision-making. So that leads me to sort of my next question, which was also the big hot topic. It was, we're coming back to the office or working at high in hybrid environments, or we're going to be working still at home.

Everyone, it just kept getting delayed, especially if you think about downtown Toronto, right? Supposed to be 1st quarter 2023, everybody back in, then it was supposed to be the fall of 2023. It seems busier downtown Toronto these days. But what's your sense of that in terms of where we're going in 2024?

Yeah, it's a great question because it's, you know, probably one of the first questions that get asked of us of anybody who's considering a new opportunity with an organization is what's the policy on hybrid work structure and what's the vision for the organization going forward? And this question is being asked of us by the most senior executives.

It is not just the mindset of lower-level, mid-level staff, it's, it's all across the board. I think what we're going to see is that as the labor market continues to heat through 2024, a bit of the power of negotiation may go back to the employee again. And when that happens, there's a little bit more ability for them to demand and request.

Accommodation and flexibility by way of their engagement with the workplace. A lot of organizations, I think, are trying to decide quote unquote, how many days in office, I think the organizations that are maybe becoming more forward-thinking with this are shifting that narrative from how many days in office to how do you engage with the workplace?

How do you be present? With all the stakeholders you need to be present with in your organization, how do you ensure that you can achieve business objectives? How do you ensure that you can create a positive culture? One of growth? How do you ensure that you can commit to your stakeholders and shareholders? What their expectation has been of performance? And if you can achieve all those things, then is it really about number of days in office? Or is it about how you engage with your stakeholders and your communities in your professional space? I think that that's a healthier discussion because we all recognize you can be in the office and still not be engaged. Or productive, how do you achieve high levels of engagement is really the key question, and it's not as easy an answer as it was a decade ago. 

No, and it's funny in our groups, right? It's constantly coming up over and over again, right? Anyway, it is interesting. And I find actually at the executive level, sometimes it's more worrisome because they got used to, it was funny. The millennials introduced us to the concept of somewhat of a life balance. And the, the older individuals are like, no, no, no, we're working 1st, then comes COVID and then all of a sudden, what you see is, oh, my God, this isn't so bad. I could work from home. They, they've been leading the pack a little bit too.

It hasn't been easy for those executives. No, I, you know, I think it's interesting, you know, not unlike the, the interest rate strategy, where it takes various cycles of quarters to, to see the result and the impact. I don't think we're going to know the real impact of what's happening with hybrid work until we get another year or two down the cycle. And when I say that, you know, you worry a little around what it's going to mean for the newer cohorts of workers. What does it mean to them with regard to learning the trade, if you will? How do they get onboarded properly? How do they learn their profession? If they're not spending time in person with people who understand their business or with the leadership team, and so I think that there are things that we don't yet see evidence of as a result of what's happening that will only become more evident to us in another year or two, and I think that the future is likely some certainly state of hybrid and flexibility and choice that we've never seen before the pandemic.

But I do believe that organizations will find purpose to bring people together in person in a more prevalent way than we're maybe seeing debated in the market today. And I believe organizations will become more sophisticated in how they engage people to their quote unquote workplace, such that there's value in being together. Maybe different than they would have seen historically. 

So, I'm just going to ask you 1 other question. There's a couple of things I wanted to get to, but AI and talent today. Everybody's been talking about Canada's poor productivity and we got to make some changes and stuff. We have AI coming in. It is influencing different jobs. Do you see that as a factor or in the coming year? Are we still too early? Maybe that's the offset to the demand in talent. I know companies are going to start thinking about that. Can I reduce my staff? Do you see that? Yeah, I mean, we're certainly seeing it implemented now through various ways. That being said, I don't know that it's a genuine fear to worry that I'm going to lose my job due to AI and advances in technology.

I think that. Long term has been held a vision that ideally what we see is moving individuals than from more, you know, less value added tasks, more repetitive tasks that can be now achieved through a I and moving them to more value added and contributing roles within organizations. That's what we're seeing more than anything. And that's what we're hearing from our clients more than anything. And it's what we've also seen even within our own space. Historically in the recruiting business. It was a very labor intensive exercise to find people for opportunities to join our clients because you had to work the phones. You had to connect with people very traditional means now we're able to spool up available talent for a particular role literally instantaneously based upon AI generation of various different algorithms we use to both look at historical individuals we've worked with with clients.

And also what's happening out there in the social media space with people we've never even talked to yet who are showing us through their own actions that I'm interested in looking at a particular opportunity. And so that just creates efficiency for us. It creates value for our clients. And so the time that we would have spent just picking up the phone and calling people, we now spend in person with a shorter list of people to vet out their interests and create value for our clients and for the individual looking for the role. So just a small example of how it's generating benefit, not replacing people. 

All right, my last question, because I think this is a value to the listeners too. You've moved to a six quarter forecast where you're constantly rolling six quarters. And I think that would be interesting for a lot of our members.

Now, you have to do this. You're a public company, so you're more stringent in the governance is there. But tell me some of the benefits or tell us some of the benefits of doing something like this. So what we've heard both internally and from our clients is that adopting a rolling forecast, which stretches out for six quarters ahead of where your budget cycle would be.

It allows for a more forward looking view of what's anticipated in the market and Really, we all see that the last couple of years, the market's been less predictable, much more erratic with regard to ebbs and flows, and the cycle of extension on forecasting allows for you being able to pivot and be much more nimble around how you make decisions within the organization to optimize market opportunity and clearly to then be able to achieve the budget that's been set on a fiscal basis.

Well, David, I want to thank you for your time. That was great. And thank you for sharing your insights. If you're interested in our live webcast, the Way Forward live, and or any other Snippets, please take a moment and visit us at peo-leadership. com. You'll find on our site various previous recorded webcasts that include guests such as Stephen Poloz, we were just talking about interest rates, Avi Goldfarb, Dr. Michael Roizen, and Morgan Housel. The list goes on and it covers such topics as growth, uncertainty, mental health, leadership, the new world, and a host of others. Thank you for joining us today, and we want to wish you all the best for the holidays and a healthy, happy new year. We'll see you next year.