Tom Sweeney

It's a coming of age tale….

Posts Tagged ‘Supply and Demand’

Equilibrium: Apparently it applies to more then grade 10 science class…

Posted by sweens on March 23, 2009

Today I had a coffee with a professional who has a similar profession to my own.  During our coffee chat it was pointed out to me that there is a sense of equilibrium that exists within the recruitment world and the labour market.  This relationship is as follows:


The labour market always has either too many jobs with too few resources or too few jobs for too many resources (supply and demand). 


I thought this was an interesting way to look at the recruitment world because it is an accurate statement.  If the labour market were ever to balance out – where we would have an equal number of jobs to resources – there would be no need for the recruitment industry.  So what can we say when the industry is on either side of this equilibrium?


It seems to be common knowledge that when you are in the recruitment industry and the economy is booming and people are hiring – the times are great.  Money is to be made and it has been described as shooting fish in a barrel.  Smaller recruitment companies are formed and there is a lot of competition.


When times are bad, those smaller companies tend to fold or down-size and the whole industry is affected.  When the number of placements drops there is less to go around for everyone in the industry so things obviously decrease in size.  The larger companies can often look at this situation in a positive manner because smaller companies are more likely to fold during this time and offer them less competition during a recession and once the market comes out of the recession.


All in all, the recruitment industry is heavily reliant on the economy and depends on the fact that employers can not satisfy their own staffing needs, either due to too many or too few candidates.    

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What’s my current market value….

Posted by sweens on January 21, 2009

Today’s blog entry is about the market value any position has in the IT market today and where that may or may not go.  With the recent layoffs by many Information Technology companies in Ottawa, the simple ‘supply and demand’ equation comes to the front to help us look at this issue.  Supply and demand states that in a competitive market, salary will function to equalize the quantity demanded by employers and the quantity of hires made by the market conditions.


So, with more and more people being let go as of late, we now enter a situation where the supply of candidates exceeds the demand employers have on the labour market.  Some people would have suggested prior to this economic downturn that current salary expectations were a bit higher then where they should have been and that new-grads were demanding too much coming out of school.  That situation was made possible by a lack of candidates to fill employers’ requirements – which allowed candidates to demand more from their new employers.



We are now entering a situation where there are too many candidates to fill a limited number of positions which MAY lead to people taking a salary cut in order to find employment.  This ultimately could lower the salary expectations once the Information Technology sector begins to grow again as people may begin to join companies at a lower salary range then they are currently in.




I think the suggestion I can make is that you should seriously consider what you are willing to accept in terms of compensation for any offer made from this point forward.  I say this for two main reasons.  The first, being that companies who are still going to hire people may be a little nervous about a big salary and would be more comfortable going with a moderate salary.  Secondly, with more people actively searching for a position at the moment, your competition for each position just got tougher, and if you won’t accept a position that pays lower then your last position did, someone else might.


And where would that leave you…

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