Hirematic Hiring & Recruitment Trends 2023
Employers, workers, and economies are changing at an unprecedented rate as we enter the fourth year of the decade. Talent acquisition managers play an outsised role in preparing businesses for future success. 2023 will see these managers continuing to adopt more agile processes and technologies to understand, forecast, and manage an ever-changing recruitment environment.
No one knows what the next 12 months will hold. But we’ve taken a guess and would love to know if you agree with our top 5 trends predictions for 2023.
TREND #1: Unemployment Will Stay Low
Unemployment is historically low while inflation is the highest it’s been in 40 years. Due to rising interest rates and recessionary fears, many analysts are expecting unemployment to increase in 2023 from its current rate of 3.5%, but only by around 0.5%-1%. Even with this increase, unemployment will still be far below historically “normal” levels.
Implication for Talent Managers: Candidate Shortage
Low unemployment rates result in increased competition for candidates. With more jobs available than candidates to fill them, employers will face challenges hiring for open roles in 2023.
This is reflected in the sentiment of 539 employers surveyed recently in the US. Finding candidates is one of the top hiring challenges highlighted by the study. Seven in 10 said they receive too few applicants, and a similar percentage said the applicants they receive are unqualified. Almost eight in 10 anticipate the candidate shortage to continue throughout 2023, despite the fact that a recession is looming for most economies.
The candidate shortages caused by low unemployment rates often affects other trends discussed in this series. It can result in loss of organisational productivity due to skills shortages, drive wages higher, and inflate recruitment costs.
What Can You Do in 2023?
Be Flexible with Job Requirements
Job descriptions typically list specific education and experience requirements that can prevent candidates with the right skills from applying if they lack a certain credential. Broaden your talent pool by evaluating candidates based on the practicalities of the role. For example, consider measuring candidates based on behavioral competencies and technical skills, rather than educational credentials.
The U.S. government is currently using this strategy, advising federal agencies “to limit the use of educational requirements” in federal contracts, and “to increase the use of skills and competency-based hiring for employment.”
TREND #2: Talent Turnover Will Remain a Risk
According to business consulting firm Robert Half’s biannual survey of more than 2,500 U.S. workers, 46% of respondents are currently looking or plan to look for a new role in the first half of 2023, up from 41% six months ago.
Workers said the main reasons they plan to look for a new job in the first half of 2023 are a higher salary (61%), better benefits and perks (37%), and greater flexibility to choose when and where they work (36%). Nearly 3 in 10 workers (29%) are considering quitting their job to pursue a full-time contracting career thanks to an increased demand for contract talent.
Implication for Talent Managers: Employees Are Confident in the Jobs Market
Threats of hiring freezes and layoffs at some companies haven’t affected employee confidence in the job market, according to recent studies. The labor market remains tight, and workers are curious about exploring new opportunities and career paths.
What Can You Do in 2023?
Boost Retention with New Perks
Studies show workers are willing to switch jobs for career advancement and training opportunities. A focus on people development and job enrichment can help employees remain fulfilled in their jobs.
For blue-collar workers, experts predict that employers will offer new benefits that are traditionally only available to white-collar workers. These could include career guidance, education, health care contributions, paid parental leave, and flexible hours. The latter is especially significant since blue-collar workers are increasingly migrating to white-collar jobs in pursuit of remote or hybrid work.
TREND #3: Rising Wages Are Here to Stay
Almost two-thirds (61%) of workers who plan to leave their job in 2023 said they are doing so in search of a higher salary. Six in 10 workers worry that their paychecks won’t keep pace with inflation — which is why many are job-hunting, and more will take on a second gig.
In an attempt to stem the flow of talent from their organisations, 75% of employers plan to increase wages, according to research by CCI Consulting.
Companies set aside an average of 3.9% of total payroll for wage increases in 2022 and pay will continue to rise through 2023 and beyond, especially for blue-collar jobs and manual services due to the shrinking working-age population and low unemployment rates.
Actions Organisations Have Implemented to Help Recruit and Retain Key Talent
Source: CCI Consulting’s 2022 HR Insight SurveyPay transparency is also pushing wages higher for some workers as employers increase the wages of several cohorts to ensure fairness and remove any gender or racial pay gaps. According to Harvard Business Review, a fifth of all U.S. workers are now covered under pay transparency laws, a trend that experts predict will continue to grow in 2023.
Implication for Talent Managers: Higher Staffing Overheads
What Can You Do in 2023?
Adopt Transparent Pay Policies
A culture of transparency can result in workers being less likely to quit their jobs. Organisations that prioritise having ongoing open and honest conversations about determining compensation will also attract the best talent.
Employers should also offer greater clarity and communication around compensation. Some examples include how worker efforts are rewarded, and how their role contributes to the company’s success.
Depending on their location, employers may not have a choice when it comes to transparency — new pay transparency laws will likely result in more employees discussing their compensation with co-workers and more requests to managers and supervisors for pay adjustments to correct differences that employees do not readily understand or accept.
TREND #4: Constant Change is the Norm
According to McKinsey & Co., an organisation that can accelerate its pace of change will see powerful outcomes including:
Change is critical to survival in today’s environment. The success of any organisation will depend on its ability to swiftly adapt, monitor, and adjust to constantly changing environments.
Implication for Talent Managers: Change Management and Agility
Over half (55%) of HR leaders reported “leading change” as a critical skill most lacking in their organisation in CCI Consulting’s 2022 HR Insights Survey.
The ability to adapt to and lead change is based on how agile a team or organisation can be. According to Gallup, the concept of agility can be defined as, “employees’ capacity to gather and disseminate information about changes in their environment, and respond to that information quickly and expediently.”
From a strategic perspective, agility is the ability to combine speed and data-driven innovation to maintain a competitive advantage. The data part is key here: how can talent managers use data and analytics to better understand, forecast, and manage change?
What Can You Do in 2023?
Adopt Smarter Workforce Planning Strategies
According to Korn Ferry, talent managers need to be more deliberate in their demand planning, removing silos and collaborating with business leaders across functions to truly understand their needs for the coming year. The new economy is dynamic and ever-changing, so your workforce strategy should be too.
The use of data in recruitment is not new. But new technologies that incorporate AI and predictive analytics will become more prolific in workforce forecasting in 2023 to help you identify the right roles, skills and geographies to focus on the changing business.
Korn Ferry also recommends that talent acquisition professionals conduct scenario-based workforce strategy plans to prepare for the worst, average, and best-case economic conditions. In each case, it will be critical to focus not only on a potential downturn, but also on the recovery, so organisations can bounce back quickly and dynamically.
TREND #5: Recruiting Costs Continue to Rise
The previous four trends document the challenges talent acquisition managers face in 2023, especially when it comes to sourcing high-volume, seasonal, or blue-collar workers.
These workers often work multiple jobs and seek new work from week to week — meaning talent managers need to fill their recruitment funnel with candidates constantly. In the past, this wasn’t a huge problem — low-cost digital ads and job boards were sufficient channels to keep the funnel full — the supply of workers was readily available.
However, the pandemic led many workers to reskill or move industries, effectively moving from blue collar to “new collar” a new term being used by industry analysts to describe this phenomenon.
And what happens when supply is constrained? Costs increase. The cost of recruitment marketing is increasing as the demand for workers exceeds the supply.
Implication for Talent Managers: Digital Ad Costs Inflate
Recruitment cost inflation is rising fast. The average cost per candidate application (CPA) rose by 43% in 2021 compared to 2020. The cost of sourced applications has risen from $10 app pre-pandemic to $30-$50 today. The cost per click (CPC) on job applications rose by 54% in 2021 — another key indicator of high recruiting costs (By comparison, regular CPC rose by just 11% in 2020).
Even if your ad budgets increase to reflect this new reality, can you be sure you’re maximising the return on your investment. Aptitude Research found that up to 40% of job advertising budgets are wasted due to inefficient CPC deals or manual or low-frequency ad optimisation practices.
What Can You Do in 2023?
Don’t Become a Digital Ads Expert (Use Programmatic Job Ads Instead)
You never signed up to be a digital ads expert. Your passion is connecting great people with great companies. Programmatic job advertising can get you back to that.
Programmatic job advertising is a complicated name for a very simple solution. It’s basically a technology-enabled multi-channel job ad service that helps you find and hire the right people faster, with fewer resources. No advertising diploma required.
The benefits of programmatic job advertising include:
Hirematic is a programmatic job advertising platform trusted but companies like Uber and Amazon. Our smart platform maximises job offer visibility and reach across our vast network of recruiting channels. You can monitor traffic and applications across all channels in real time and optimise as required — or leave it to our team of experts.
An Aptitude Research study found programmatic job advertising achieved 51% better job ad targeting and 48% improved campaign effectiveness, so it’s certainly worth a try in 2023.