The first part of the year has seen the global economy remain rocky due to rising interest rates, inflation, and the persistent threat of a recession. As a result, many major corporations continue to announce redundancies and hiring freezes.
Despite this, there are sectors actively hiring, prolonging hiring challenges with continued competition and continuing the war for talent. As a result of this busy job market, candidates are often able to secure more than one job offer at the same time as strong counteroffers and buy backs from their current employer.
The difference we have noticed from 2022 is that candidates are less enthusiastic about considering a move and often decide to stay put, even after successfully completing a long and complex recruitment process: leaving the comfort zone of an existing job is a tricky decision to make.
Remuneration has come back to be the deal breaker
Whilst only a few months back smart/agile/flexible working was the priority and seemed to be the ace on the table, now in 2023, remuneration has come back to be the deal breaker. As inflation rises (10% in Italy), life in the major Italian cities has become difficult and attracting talent from smaller cities is getting problematic. Corporates are unable to cover the gap in the cost of living from cities different to Milan or Rome. This further reduces the available candidate pool.
It is not only corporates who are impacted by the war for talent though; recruitment in law firms has been cautious during this first quarter, and they are mindful about talent retention, so much so that many are in the process of reviewing their salaries in order to keep their lawyers.
Moving in-house is becoming less attractive
The combination of increasing law firms salaries, a better work life balance and the recent government policies to reduce taxes paid by liberal professionals, means moving in-house becomes less attractive.
As a result, whilst in-house candidates are enjoying the luxury of a busy job market, the race for securing the best lawyers continues as the pool of available candidates falls and we do not expect this to change.
Corporates will need to find a way to stay abreast of these market changes, review their salaries and remain competitive employers against the law firms. As some will say, if you want it you will need to pay for it!