The year 2022 marked a significant transition in the labor market. Job openings surged while applicants decreased dramatically. In fact, there are two open jobs for every unemployed worker in the US today. As a result, HR teams found themselves struggling to keep up with a rapidly growing number of open roles and declining candidate pools, causing talent acquisition budgets to skyrocket by up to 51% from 2021. Now that job seekers have gained authority over the employment market, employers need to continue putting in more effort to stay ahead of the competition of top talents in 2023 and the years beyond.
Adequate planning can put you ahead of the game when it comes to attracting skilled and qualified candidates from a sparse and competitive talent marketplace. To start on the right foot, you need to re-evaluate and change the way you approach recruitment to adapt to the needs and demands of the current workforce, which has been forever changed by the pandemic. Stay on top of the upcoming recruitment trends to ensure your plans are in line with what job seekers are expecting from you. With this in mind, we’ve created the 2023 Recruitment Trends Report that will give you comprehensive insights into the trends and challenges that will shape the recruitment world in 2023. This article will outline the key takeaways from the report and share some important tips on how to prepare for these changes in the year ahead.
1. The unstable economy
The global economy is still recovering from the impact of the coronavirus crisis. While the recovery is expected to take several years, we have already seen significant improvements, especially in terms of unemployment. In fact, a study projected that unemployment in the US will drop to an annual average rate of 3.6% in 2025 from a whopping 6.4% at the beginning of 2021. What a promising sign of things to come, right? However, the economic landscape remains volatile and the risk of another economic downturn remains high.
As a matter of fact, many economists have already predicted that the world economy is headed for a recession in 2023. This means we may expect mass layoffs, widespread hiring freezes, and a decline in job vacancies as companies tighten their belts and adjust their operations to meet the new market conditions. But despite the recession fears, job seekers will still have the leverage in the job market as companies’ strong need to hire will remain. One main reason for this is the increasing population of aging workers, narrowing the talent pool across several countries. As a result, we believe that competition in the employment market in the coming years will remain tight. With this in mind, we expect companies to be more strategic in their recruitment and hiring efforts to win the ever-challenging war for talent.
2. Remote work remains popular
Over the past two years, remote working has become very popular with many companies switching to this approach to cope with the challenges of the COVID-19 pandemic. During this time, not only employers have seen and felt the benefits offered by this new way of working, but so have employees too, as they enjoyed the flexibility that comes along with it. For this reason, we have seen a remarkable increase in the demand for this trend, especially in the technology sector. In fact, it has become one of the most desirable benefits job seekers want from their employers, with 80% of them saying that they would decline a job offer without remote work options. So, to meet both the business needs and workers’ demands, we expect this trend to continue, even now that the economy is on its way to full recovery.
With several reports proving that remote work can tackle some of the key challenges in recruitment, we believe that this can also be a good solution to the upcoming recession where saving money is every company’s top priority. According to Global Workplace Analytics, companies can save an average of $11,000 yearly for each part-time remote worker. So, rather than pulling back on hiring or cutting back on the workforce, companies should continue to embrace remote work and make the most of its benefits. Because aside from reducing your business expenses, it has also proven to make employees happy, more engaged, and more productive, maximizing your competitiveness during economic uncertainty.
3. Internal mobility is becoming more important
Retaining talents is as important as attracting them, if not more so, especially since the supply of skilled workers is still and will likely remain tight in the coming years. With job openings remaining high despite the conversations surrounding an upcoming recession, employees are leaving their jobs more than ever before, even without another one lined up. According to the 41% of global workers surveyed by McKinsey, one of their main reasons for quitting is that they perceive limited possibilities for advancement, making them feel undervalued. This is why internal mobility is again gaining some traction and we expect to see much more of it in the next couple of years.
A LinkedIn study revealed that employees provided with opportunities for career growth and upward mobility are 41% more likely to stay longer. This demonstrates how critical it is to give employees access to the right development opportunities and expand their career options to make them feel valued, satisfied, and fulfilled at work. This will not only increase your retention rate but also offers a great solution to fill skills gaps within your workforce and strengthen your talent pool while cutting down on recruitment and other related costs. Most importantly, your company will become more appealing to job seekers who desire growth opportunities.
4. A renewed focus on employee engagement
People perform at their best when they are motivated and emotionally connected to their work. However, when employees work in different locations and time zones, it can be difficult for them to feel connected and engaged. This is especially true in a distributed workforce where teams are often dispersed across different countries and continents. While the benefits associated with it can be great for employees and employers alike, it also comes with its own set of challenges, more specifically when it comes to engagement. For instance, the team’s inability to meet face-to-face can have a negative impact on their morale and overall performance.
As the demand for flexibility in the labor market continues to grow, we can see that workplaces will become more distributed and diverse in the future. So, in 2023 and beyond, we expect companies to build a culture that is more focused on ensuring that their culturally diverse and geographically distributed employees feel that they are seen, valued, heard, and supported by colleagues and managers. This may involve putting proper remote working practices and tools in place. In relation to this, we suggest evaluating and refining your employee engagement approach continuously to ensure everyone is set up for success and maximize the value and productivity of your workforce.
5. The workforce desires a culture of belonging
The majority of candidates consider diversity part of an ideal workplace. In fact, a study revealed that 72% of 18 to 34 years old workers would consider declining a job offer or leaving a company that doesn’t support diversity, equity, and inclusion (DEI) initiatives. As the population of aging workers continues to increase, younger workers entering the job market proactively seek out companies that will allow them to bring their authentic selves to the table and celebrate differences. With that being said, we believe that building a culture of DEI should be one of every employer’s top priorities.
The young generation of workers is expected to make up approximately 75% of the global workforce by 2025. So, employers that want to differentiate themselves in a competitive labor market need to be intentional in embracing diversity and inclusion to truly create a culture of belonging. We also anticipate them boosting their DEIB efforts to ensure all employees feel included. For example, providing benefits that are applicable to all demographic groups, such as emotional wellness programs and flexible working arrangements to demonstrate to employees that you care about their specific needs and demands both within and outside of the workplace. This can result in greater on-the-job effort and high employee performance.
Make sure to download our 2023 Recruitment Trend Report for the in-depth insights and how you as a hiring manager can utilize these to maintain a competitive advantage throughout 2023 and beyond.
Live session on January 31, 10 am
Gain an edge in 2023 with our exclusive webinar featuring Karin Bergström and Albin Malmberg. Learn more about the 5 key HR & Recruitment trends that will shape the future of hiring and get personalized advice from our experts.