How would you describe the recruitment market now?

Kirk: Trying to talk about today needs context. The last normal year we had was 2019, and we haven’t had a normal year since.

Everyone knows what happened in 2020. If you’d said to me in the summer of 2020 - when I and most other people sat at home wondering what was going to happen in the world, and we’d never seen anything like this before -  “Don’t worry, Nick, in 2021 and 2022 you are going to see the greatest recruitment market of your entire career” — which for me spans 31 years at Michael Page — I would not have believed you. Nobody would have believed you.

There was no indication we were about to head into the greatest recruitment market of all time, but we did. Based on the results of not only our organisation but a number of our competitors as well, there was, through that two-year period, the greatest volume of movement of white-collar workers ever.

Candidates came to market having reassessed their lives during the pandemic and decided that now was a good time to move. They felt they wouldn’t put up with their boss anymore or that they could do better. At the same time, a whole lot of organisations were transforming as a result of the pandemic. Retail organisations were moving from bricks to clicks and therefore needed to get rid of store assistants and rehire e-commerce experts.

So there was mass transformation across multiple companies and a whole load of talent coming to market that hadn’t done so before. It was a perfect feeding ground for recruitment consultancies. We, like a number of other companies, benefited.

We had our all-time record year in 2021 and then beat that in 2022. It was never better.

I remember being with the leadership team in our Chicago office in September or October 2022. We were chatting about the types of offers candidates were getting. One of the managers told me he had a candidate go in for an interview, and after 20 minutes the client contacted the consultant and said, “He’s perfect. I’m going to offer him the job.”

The consultant said, “Why don’t you spend another 40 minutes selling the job to him? Because he’s already got three other offers.”

That’s how hot the market was. Candidates were moving for 15 per cent, 20 per cent, 25 per cent increases in salary. In addition to that, they were getting job titles they probably didn’t deserve, roles with responsibility they probably hadn’t earned, and flexibility around their relationship with the office like nobody had ever seen before

What has changed after that hiring boom?

Kirk: What we then started to hear was this phrase called “internal equity”. Organisations suddenly recognised that they had hired somebody on a salary 20 per cent higher than everybody else. Existing employees would come into their appraisal and say, “He’s not 20 per cent better than me, so why are you paying him 20 per cent more? I want a pay rise, otherwise I’m going to leave.”

In order to make it fair and equitable across the team, companies had to increase salaries for everyone else. It was costing companies so much money.

Companies started coming to us and saying, “We just can’t afford the impact of hiring one individual on so much more money than everybody else.”

So offers suddenly started to go back to what I would call normal — somewhere between 5 per cent and 8 per cent on a global scale, although it varied by market.

Nobody told the candidates that.

We went into 2023 and candidates were coming to market expecting the kind of increases they had seen colleagues receive a year earlier. When we told them they could probably expect a 5 per cent to 8 per cent increase, they didn’t believe us.

They would go through the entire interview process, get to the end, receive a 7 per cent or 8 per cent offer and turn it down. They would think, “It’s a one-off. The next process will get me 15 per cent or 20 per cent.”

It was only after doing that two or three times that they started to realise those increases had gone. Then we started seeing more candidates accepting those offers.

The problem with those types of offers is that if I’ve only got a 5 per cent salary increase and I come to resign to my boss, and my boss values me, he’ll probably put my salary up enough to keep me. So buybacks became a very big issue

Coming back to the first question, how would you describe the hiring market today, considering the geopolitical uncertainties?

Kirk: We’re probably more optimistic in terms of the outlook than we were 18 months ago.

Eighteen months ago, 5 per cent of the countries we operate in were in growth. As of the end of Q1, 40 per cent of the countries we operate in are in growth.

Markets like the US have had six quarters of growth. China has started to come back online.

The great thing about being here in India is that the one business that has performed throughout and delivered record after record after record is this one.

Is geopolitical uncertainty affecting the job market?

Kirk: Naturally, whenever you have any kind of macro event, it creates uncertainty.

Our target area is white-collar professionals. They are educated, typically risk-averse, they’ve had good careers, and they don’t want a blemish on their CV.

If there is some kind of macro event that makes them feel uncertain, often their reaction is just to sit on their hands and stay put.

Without doubt, unhelpful headlines around anything that might lead to higher oil prices, inflation, interest rates and so on do not help.

But all I can do as CEO, and all I ask my employees to do, is control the controllables. You cannot control those elements.

Would I like the macro environment to be more settled? Yes. Is it in my control? No.

The US is also seeing a turmoil. Which sectors are hiring most aggressively there?

Kirk: For us, 55 per cent of our business in the US is in construction.

We only do three job titles there (in construction), all white-collar leadership roles: site superintendents, project managers and estimators, which we would call surveyors.

That market is red hot right now. Whether it’s data centres, multifamily housing or airport redevelopment projects, there is a lot of work going on.

In Q1 we saw around 14 per cent growth in our business there.

The other area performing well is manufacturing. Some of the political policies that have come out more recently have created demand for organisations to move manufacturing back into the US from places like Mexico or Southeast Asia.

A lot of companies can’t move a factory overnight — it may take three to five years. But what they can do is start showing intent by bringing leadership roles back to the US.

We’ve benefited from that.

Outside those areas, though, for complete clarity, we haven’t seen a substantial recovery in corporate functions such as legal, HR and finance. Our performance over the last six quarters has been driven primarily by construction and manufacturing.

Which sectors are driving hiring in India?

Khandelwal: It’s a slightly similar story because of the policy focus on infrastructure spending.

Real estate, infrastructure and renewables remain very high-growth engines for us. Data centres are another area with very high demand.

GCCs have always been a flavour, so we haven’t seen a shift in that. However, what we are seeing is more European companies viewing India as a real option rather than just playing with the idea of setting up a GCC.

Europe has been tough overall, especially France. In the past there was hesitation from line managers about having technology teams based in India. Today they don’t really have a choice because financial performance is under pressure.

Either you grow the top line or improve the bottom line. GCCs form part of that story.

To build confidence, we’re often introducing companies that are considering a GCC to another company from the same country that already has one operating successfully in India.

That is also giving rise to growth in Tier-II cities because some companies don’t want to be in Tier-I locations where the cost arbitrage starts becoming a question mark.

Bengaluru and Hyderabad continue to be very strong.

Financial services also remain very buoyant. Financial institutions, both buy-side and sell-side, as well as Indian NBFCs, insurance and reinsurance companies, are doing extremely well.

How do you see the talent market evolving around AI and the recent commentaries on slowdown in hiring?

Kirk: There’s only a limited pool of candidates who can do what organisations want them to do today because that skill set hasn’t had time to work its way through the workforce.

The top companies will get the first crack at those candidates — the people who are ready-made and can add value from day one.

What second- and third-tier organisations are having to realise is that they will need to bring in people who show the right soft skills and the willingness to develop, and then invest in training them.

The candidate who joins won’t necessarily add value from day one. It may take six to 12 months before the organisation sees a return on that investment.

For some organisations, that’s simply something they have to accept.

How is AI changing hiring patterns in India?

Khandelwal: In technology, AI is having the biggest impact on the developer side, particularly at the more junior end.

Full-stack talent is still very common and very much in demand.

Infrastructure support functions are where we see more automation being deployed. That skill set is now moving into prompt engineering and AI-related roles.

Analytics remains very important because AI’s predecessor is analytics. AI only functions well when the data is accurate.

The biggest problem for many organisations that have deployed AI is that the data is not correct. If the data is not correct, the output does not match expectations.

I met five or six customers in Pune last week, and their biggest frustration was that they had deployed multiple AI projects and none of them were working the way they expected.

The reason, in many cases, comes down to data quality.

As a result, we are seeing strong demand for data analysts with good technology backgrounds.

Some organisations have become very good at understanding which skills are transferable and are redeploying talent accordingly. Others have not, because AI, analytics and technology often sit in separate silos.

Some jobs have moved to the Philippines, particularly voice-led technology support roles. But at the same time, high-end GCC technology work is coming into India, and that’s a growth engine.

If you look at the types of jobs coming into some of the newer GCCs, they may appear basic compared with organisations that have been operating in India for 10 years, but for those companies it’s a starting point.

What we’re seeing is not necessarily a sharp decline in job flow. If I compare our Q1 and Q2 pipeline so far, it is very similar, although the mix of technology roles is changing.

Would you say that GCCs are contributing to some kind of a brain drain in taking away talent?

Khandelwal: No, I don’t think GCCs are a brain drain. They create employment opportunities and different types of jobs.

What you’re seeing now is that European companies, because of the macroeconomic environment, are finding it harder to create a growth story. The GCC model gives them flexibility and helps improve competitiveness.

It’s actually a redeployment of talent. People who may be coming out of one organisation because of layoffs are finding opportunities elsewhere.

Is India still a bright spot for the PageGroup ?

Kirk: The simple answer is yes.

We saw 10 per cent growth here in Q1 — another record.

India is our largest business by headcount in Asia. In revenue terms it’s around our tenth-largest market, but that’s principally because of currency.

Ultimately, we can scale this business significantly. We can double the size and become a top-five business globally.

There is very, very high potential here. As I said before, we’re 15 years into the journey, but I still feel like we’re only at the beginning