Looking back at 2020, it can seem like a year where hardly anything has gone to plan; a year where we have been forced to transition into a new way of working, meeting and thinking about business. While many would probably appreciate a ‘New Year, New Me’ scenario, COVID-19 leaves a mark on the year 2020 which is carried through to 2021.
COVID-19 has impacted the talent and hiring landscape globally, with additive manufacturing being no exception. Alexander Daniels Global, recruitment company for additive manufacturing, highlights five factors from 2020, that will shape the hiring and talent landscape in year 2021.
1. Handling crisis differently: start-ups and scale-ups versus larger established businesses
The response and reaction to the economic crisis following the COVID-19 pandemic has been significantly different between high growth start-ups and scale-ups, and the larger more established businesses. The former appears less impacted by the situation and continue to hire at pace, as they are far less dependent on revenue and much more focused on growth in order to hit their next investment round. Oppositely, the larger more established businesses have resized teams, bringing their costs back in line.
According to LinkedIn, since the onset of COVID-19, internal mobility in businesses has increased by nearly 20% year-on-year, which is likely to continue. Thus, in 2021, we will likely see start-ups growing their teams, while larger multinationals are more likely to resize and focus on internal hires and team optimization.
2. Increased amount of additive manufacturing professionals
From 2019 to 2020, the total number of professionals employed in additive manufacturing grew significantly. In North America, there was a 36% increase in number of AM professionals, with Europe seeing a 26% increase. This growth can especially be attributed to the latter half of 2019, where there were increased investments in new technology and material development. As the industry grew, so did the talent pool. Moreover, we saw more companies opening up and hiring new talent coming into AM from aligned industries like Robotics and Industrial Automation. This growth of professionals was all pre COVID-19.
Going into 2021, Alexander Daniels Global expects to see this growth in number of professionals flatten out, as a result of the hiring freezes, insecurity and layoffs that have happened over the course of 2020. In the worst case, the number of professionals will decrease from 2020 to 2021 as talent may have been lost to other industries in which layoffs and cuts have not been as hard.
3. Fewer jobs – a shrinking talent gap?
Because of the coronavirus pandemic and the economic setback, the AM job market has shrunk. Compared to 2019, there are 60% fewer available jobs within AM, posted on LinkedIn, in North America. Similarly, Europe is experiencing a drop in available jobs with 62% compared to prior year.
This decrease in available jobs paired with an increase in number of available professionals and an increased amount of professionals open to new job opportunities, leaves a more favorable candidate-per-job ratio compared to the previous years. Alexander Daniels Global has found the current candidate-per-job ratio in North America to be 20:1. That means, that for every job posting, there are 20 candidates in the whole of North America that could potentially fill that job. That is a significantly higher ratio than the 5:1 ratio of 2019. In Europe, that ratio is even higher, specifically 24:1 compared to the ratio of 4:1 of 2019.
For 2021, this presents a challenge to both organizations and the professionals looking for new opportunities. With so many people generally looking for work, whether they have experience in additive manufacturing or not, the organizations will receive a lot of applications. The problem is that 95% of those applications will be unsuitable, but companies will still have to screen them all to find the one diamond in the rough.
Secondly, professionals will face more competition and longer hiring processes, increasing the uncertainty of the job market. This could potentially contribute to the professionals seeking outside the industry, contributing again to a loss of available professionals in 2021.
4. Talent Scarcity Remains
Despite a higher candidate per job ratio, the talent scarcity in the industry remains. While there may be more candidates actively looking and applying for jobs, some roles remain highly challenging to fill, with few suitable candidates available. Conversely, while talent may be more actively looking for new roles, they are also more selective of their next career move, due to the uncertain global situation; they want to be sure they are joining a stable business and, for many candidates, relocation has become much less attractive or even impossible. This uncertainty increases the complexity of many hiring processes.
In 2021, Alexander Daniels Global expects to see more complex hiring processes and more compromise and flexibility required, despite the market currently favoring the employer. In terms of specific areas, they expect to see a scarcity and demand for Software professionals, Mechanical Design and Controls, together with Sales and Application Engineers with knowledge of and experience in additive manufacturing.
5. Dissatisfaction with compensation
In a talent market, where people are hungry for jobs and the market generally favors the employer, organizations are historically likely to try and reduce salaries. This presents a challenge if the market shifts back to favoring the employee; then, the short-term benefit of cutting costs by offering lower than market-rate salaries may result in disgruntled employees who leave before they begin to bring value to the company. Data from Alexander Daniels Global’s upcoming 2021 AM Salary Survey, with data gathered in 2020, suggests an already increased dissatisfaction with the salary levels offered in the AM industry.
In 2019, 30% of professionals answered that they were either not paid fairly or not paid fairly at all. In 2020, that amount has increased to 40%. Thus, 40% of AM professionals feel they are being underpaid.
Pre-register to receive the 2021 AM Salary Survey from Alexander Daniels Global (released early 2021).
A consequence of salary levels that do not match the expectations of the talent could be unhappy employees that leave the companies, and in worst case leave the industry as a whole, in favour of higher paying industries. This is not an ideal scenario for an industry that is talent hungry, and where the lack of talented professionals has historically slowed the growth of the industry. However, this may well be a consequence and a trend we will see in 2021.
Companies must consider these factors and trends when hiring new talent, and be wary of taking advantage of the employer favourable market, as it may have long-term consequences for the talent scarcity of the industry.