As we approach the end of 2022 and look back on the past year, it is worth summarizing our thoughts on the key factors that have influenced the Building Materials recruitment market, as well as the trends that we expect to continue into 2023. As recruitment specialists solely focused on the Building Materials sector across North America, we have a unique, unfiltered view of the wider industry, and have summarized (from our perspective of vacancies and hiring), the key elements, opportunities, and pitfalls affecting the industry when it comes to identifying and acquiring talent.
Continued Momentum
Despite the uncertainty of the economy heading into 2023, the Building Materials industry continues to show strength in hiring activity and momentum – both ongoing and plowing ahead into Q1.
November and December typically usher in the anticipated end-of-year slowing of hiring activity as clients focus on annual planning and trade shows, however, 2022 has turned that assumption on its head and we have added a record number of new positions within our Building Materials group. Sales positions have made up most of those roles. Interview activity on open roles also remains very high with start dates only now starting to be pushed into the beginning of January.
While individual reasons for each vacancy vary, our clients are extremely focused on hiring Sales Representatives in Q1 of 2023 to service and maintain their current market share, and to ensure their ability to withstand any potential dips in the economy. Having a strong external sales force that can mine for every dollar of business is key for both fast and slower markets – our clients are preparing for whatever the 2023 economy has in store with strong representation out in the field.
Scarcity of Candidates
“Unicorns”, “Purple Squirrels” – whatever you want to call them, top talent and candidates with the X-Factor are increasingly difficult to find. Even if you do find them… reaching them confidentially, enticing them to explore a new role, closing them to accept a new opportunity, and then weathering the all-too-frequent “buyback” from their current employer, makes nailing down a skilled candidate a very difficult and time-consuming process. If done directly, nabbing talent from the direct competition can also present unforeseen issues and ill-will within niche market segments.
While good people are certainly always “out there” and can often be attracted to consider the next job if approached about a relevant role and brand correctly – these candidates more often than not know those good opportunities will come to them, not the other way around. This has been the market now for the past 2+ years. Strong candidates who are excelling in their current roles are not applying passively to postings on job boards. For employers, relying on a strong network that will give you candidate referrals, a capable in-house recruitment team, or an agency that is deeply established within the industry is increasingly important in the fight to win talent.
We don’t see the demand or talent letting up, or candidate supply increasing in the new year. Employers are going to need to be even more targeted, aggressive and creative in their approach to attracting and retaining talent in 2023.
Fun Recruitment Fact.
Targeted headhunting generated over 90% of the candidates that we placed into Building Materials industry roles this year at DMC (2022).
Succession Planning
This is hardly “new” news, but it is a major ongoing factor that continues to influence the hiring landscape within the Building Materials industry. As the Baby Boomer generation moves towards retirement, the Building Materials industry is facing an aging workforce and increased pressure to plan for succession. This shift has created challenges for employers, as they must identify and develop the next generation of leaders.
The industry must balance its historic desire to hire “like for like”, experienced individuals who bring a similar wealth of knowledge and connections within the industry to the table, with the reality of the market, and the scarcity of skilled individuals to replace at the rate of retirement.
Hiring individuals with no direct industry knowledge, but who have strong transferable skills will be key to plugging the gaps left by individuals aging out of the workforce. A willingness on the part of the employer to accept this market shift by focusing on general talent in order to spot transferable skills, and investing in in-depth, robust training and support to get these individuals up and running will be key. This is certainly more time-consuming at the outset – but is ultimately the only way to increase and strengthen the volume of individuals being brought into and retained within the industry workforce.
In ideal circumstances, new hires entering into the Building Materials industry can be onboarded with a strong handover where they can learn and inherit some of the knowledge and experience from the retiring employee. Relationships, especially client ones, are most seamlessly handed over in this manner. Many of our clients wait too long and this handover period is too short to be effective, or they miss it altogether.
Bringing Sexy Back
The Building Materials industry continues to suffer from its lack of cohesiveness and disjointed efforts to appeal to younger generations. Lack of coordination between trade associations, stop/start efforts at enhancing the industry’s image, and the difficulty of coordinating individual organizations to collaborate in these efforts mean that little tangible ground has been gained in enhancing the appeal of the industry to potential candidates working in other sectors.
The irony is, is that the industry has a proven track record of providing long-term stable careers, it has the security of massive, ongoing demand for its products due to the need for housing across the country, there are huge opportunities for new technology, and systemization (see comments on Private Equity below), and it is an industry that still values the importance of relationships between people. These are enormous selling points for the industry in the battle for talent, but there remains a desperate need for increased cohesion and marketing of building materials as an attractive career path for the aforementioned reasons.
Compensation & Competition
2022 hit the pocketbooks of our clients hard. From rising to meet the compensation expectations of new employees coming into their businesses to retaining existing talent – the overall remuneration across the Building materials industry rose significantly this year. The increased cost of living, scarcity of talent in the market, and abundance of job options available have all created a perfect storm of high compensation demands.
Expectations have jumped significantly, and lateral moves are almost nonexistent. Candidates are very in-tune with the market and what they perceive their worth to be – employers either need to pay it, or they will continue to look elsewhere.
The uncertainty of when is a “safe” time to make a move is also a contributing factor to the scarcity of candidates on the market – ultimately contributing to the increase in compensation expectations. The high cost of living, scarcity of talent in the market, and lots of job options have all directly contributed to these high compensation demands. While employer “brand” and having a strong corporate culture remain strong deciding factors when considering a job move, cash compensation reigns supreme (especially with guaranteed variable amounts for the first 12month+). Candidates who are open to exploring the market want to do so with guarantees for their security if the economy dips temporarily.
Private Equity
2022 has seen an increase in Private Equity activity and investment within the Building Materials sector in Canada, a trend that we expect to continue throughout 2023. Despite economic uncertainty, the strong foundation, growth potential, and opportunities for consolidation and innovation are likely to continue attracting significant interest from investors.
2022 has seen several well-known brands bought, sold, or consolidated which has impacted hiring. New investment means change, and change means different talent requirements.
Whether it be hiring new leadership, altering corporate structures, or finding specialists to manage the transition, there are inevitably hiring requirements when we see organizational changes due to investment. Changes in one business often have a knock-on effect on other similar businesses, as talent is pulled from one to another and this means that movement in the employment market for building materials is likely to continue so long as the external investment is attracted to it.
We do not have a crystal ball and, if the last few years have taught us anything, predicting the future is a fool’s game. However, we can guarantee that, whatever the outcome, DMC Recruitment is committed to strengthening our long-standing partnerships within the building materials industry as we help manufacturers, distributors, buying groups, and dealers to find talent into 2023 and beyond.
Wishing you a very happy holiday season, and a healthy and prosperous 2023!
Alex Mather
Partner – Building Materials
DMC Recruitment