Who holds the Bargaining Power, Job Seekers or Employers?.
The balance of who holds the bargaining power in today’s job market is a complex and ever-evolving dynamic. In recent years, job seekers have experienced a significant shift due to in-demand skill shortages, improved benefits, a tight labour market, and evolving employee expectations.
Job Seeker Negotiating Power
First and foremost, job seekers hold growing in-demand skills and expertise that employers actively seek. In industries facing talent shortages or a high demand for specific skills, job seekers with in-demand qualifications have the upper hand. They have greater bargaining power in negotiating salaries and benefits, such as working from home and having enough free time outside of work.
In fields such as technology, healthcare, and engineering, highly qualified professionals often find themselves in high demand. As a result, they have greater leverage in negotiating compensation packages, benefits, and flexible work arrangements, driving employers to make more enticing offers and leading them to having to adapt their strategies to be more flexible with the roles and benefits they have to offer.
Online Presence and Job Seeker Bargaining Power
Job seekers also have more influence due to the increase in digital channels for professional networking. Anyone with a strong online presence, such as a personal brand on LinkedIn, online portfolio or website, has an edge over the competition. As technology is forever evolving, having someone tech savvy is perfect not only for a certain role but for helping bring in better online presence for the brand. Job seekers have the power to show employers how their experience can help grow the businesses online presence.
Additionally, the rise of online job platforms and professional networking sites have made access to job opportunities easier for job seekers. They can now reach a vast pool of potential employers, widening their options and increasing their chances of finding suitable employment. This means employers need to raise the stakes and analyse what it is that job seekers are looking for and make sure the offer is competitive.
Employers also need to prove to the job seekers that their brand and workplace culture is attractive. Due to there being a high volume of open vacancies, employers need to ‘sell the brand’, the working environment and their culture to the job seeker. By creating a positive culture and brand image, organisations can become employers of choice and organically attract top talent to work with them.
The prevalence of employer review platforms and social media has empowered job seekers with the ability to research and assess potential employers. This transparency allows them to evaluate company culture, work-life balance, and other crucial factors before making decisions. As job seekers become more discerning, employers must invest in their employer brand and provide positive work environments to attract and retain top talent.
When is the Power in the Employers Favour?
When unemployment rates are high, people are more in need of immediate job offers, meaning employers have more power as they have a large volume of candidates applying for the same role. Job seekers may face more competition and fewer options, making it difficult to secure desirable employment.
For the UK, in the three months to March 2023, the unemployment rate was 3.7%, one of the lowest rates since 1974, meaning employers are less likely to have as much power than when unemployment rates are high.
While job seekers have gained more power, employers still retain significant influence in the job market. As the gatekeepers of job opportunities, employers hold the authority to determine hiring decisions and shape the terms and conditions of employment. They possess the ability to define job requirements, conduct interviews, and select candidates who best fit their organisational needs
In certain industries, locations or during periods of economic uncertainty, the power dynamic may shift in favour of employers. When there is an oversupply of job seekers or a decrease in available positions, employers may hold the upper hand and have the ability to negotiate more favourable terms. This scenario can create a power imbalance where job seekers face heightened competition and reduced bargaining power.
Achieving a Balance
Power dynamics in the job market are fluid and subject to various external factors. Economic conditions, technological advancements, industry trends, and cultural shifts all influence the balance of power between job seekers and employers.
To establish a healthy equilibrium, it is essential to recognise the mutual interdependence of job seekers and employers. A successful job market requires collaboration and understanding on both sides. Employers need talented individuals to drive their businesses forward, while job seekers seek fulfilling employment opportunities to support their professional growth.
Is There a Clear Winner?
The answer to the complex topic of whether job seekers or workers hold more power relies on a variety of variables. Across the UK as a whole, job seekers hold more bargaining power due to low unemployment rates, the rise in remote work, improved benefits, salaries and talent shortages. However, it’s important to note, that some locations and sectors in the UK hold more job opportunities, whilst other areas and sectors are more competitive and may sway towards employers holding the power.
The power dynamics between job seekers and employers in the job market are intricate and subject to constant change. While job seekers have gained more power due to advancements in technology and the demand for skilled professionals, employers still maintain significant influence over the hiring process and employment conditions. Striking a balance between the needs and aspirations of job seekers and employers is crucial for a thriving job market. Ultimately, successful employment outcomes depend on collaboration, effective communication, and mutual respect between both parties.
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