In any market, even during really bad recessionary economic times, there are certain categories of jobs and skills that remain extremely hard to come by. In one market it might be a certain kind of engineer, another time and place it might be nurses, or it might even be seemingly something as simple as truck drivers. Many of us are now facing this market with various kinds of IT professionals (Developers, Analyst, etc.). Through all of these gaps in inventory of skills something remains very common and predictable — the cycle that takes place.
Here’s what the cycle of a Hot Job market looks like for a certain ‘specialized’ need: (let’s use Bakers for our example, no one really ever would feel we would lack for Bakers, right!?)
1. Companies begin by hiring up to ‘full employment’ with in the market category. Usually 3% unemployed Bakers would mean ‘full employment’, those last 3% no one really wants there the folks who don’t really want to work, have other problems (like substance abuse, harassers, etc.).
2. Companies begin taking ‘fliers’ at the bottom 3% that are on the market. “Come guys, Billy is a good Baker and he says he won’t put Crack in the Cupcakes anymore!”
3. Companies begin to feel pain of not enough Bakers. Their overtime is going up, positions are taking longer to fill, product quality goes down a bit, etc.
4. Companies begin brainstorming on how to get more Bakers. They add a Baker apprenticeship (we can build our own Bakers!), they add retention bonuses to ensure they keep their Bakers (Free cookies!) and they start coddling to all the Bakers needs (you need a new baking hat!? You got it!).
5. Bakers start to get calls about jobs. Those jobs are paying much more than they ever imagined they would make, plus you get free cookies and cakes!
6. People start to hear stories about Bakers making six figures! Wait, I want some of that baking cake money! I would love to bake cakes for a living! How do I get me some of that baking cake money!?
7. Bakers start demanding things they never thought they could. 4am is too early for me to make the cupcakes, I only want to bake cupcakes after 6am. I don’t bake cupcakes on Sunday. I only work on wedding cakes, not birthday cakes, I’m a professional!
8. More and more people start coming into the market to become bakers. It’s the ‘hot’ field, the best and brightest want to be bakers. There are TV shows about Bakers. Bakers are cool. Baking is ‘the’ profession to get into. USA Today has Baking as the growth profession to be in the next 10 years. (USA Today announcing anything as ‘hot’ is the key that it’s probably on the backside of being hot)
9. Good and bad Bakers, alike, start to become arrogant. This is the tipping point of a Hot Job Market — Arrogance.
10. Companies don’t like to be held ‘hostage’ by any certain skill set, so they ensure the market will get flooded with candidates. The pain of not having enough talent has gotten bad enough to ensure companies will fund whatever it takes to get them out of this pain.
The Wall Street Journal announced recently that Silicon Valley has an arrogance problem. Those IT professionals that all of us need and can’t do with out, are beginning to feel their market power. Some of you might say, well this has been going on for 10 years, and you would be correct. It has been a hot job market going on a decade and continues to be hot. The arrogance isn’t even new for many. But it is now becoming common place.
I have quick story. In 2001 automotive designers in Detroit could have a different job every day if they wanted and they named the price they wanted to make. The market was on fire. Thousands of people start to flood the market. Designing wasn’t easy, but you could get educated and start at the bottom and learn the skills it took to become a good designer. It was ‘system’ based, meaning you had to learn certain computer systems to learn how to design, plus some other skills. Today, designers are still making less than what they were 15 years ago.
Basic economics will tell us these ‘hot’ markets will eventually work themselves out. The cycle is always the same. The ending is always the same. In the history of civilization there has never been a ‘hot’ job category that hasn’t, eventually, been figured out.