“If the U.S. economy is slipping into recession, nobody told the labor market.”
Those are the words of Chris Varvares, co-head of U.S. economics for S&P Global Market Intelligence, just after the Bureau of Labor Statistics released its December 2022 jobs report.
At last count, there were about 10.5 million open positions nationwide, yet some employers are hitting the breaks on hiring given the uncertainties of the economy.
Given the continuing tight labor market and the race for talent, how will employers recruit and hire talent in 2023?
Here are what I believe will be the top 10 trends this year that can help employers recruit for success:
- Candidates will remain in the driver’s seat. Jobs are plentiful, and candidates, particularly passive candidates, will want assurances that making a job change will be in their best interest. As recruiters learned last year, job prospects will be seeking positions with a healthy salary, flexibility, a culture where they can make a difference and a clear path for advancement. To attract talent that is the best fit for their organizations, companies will need to do more than “post and pray.” They must reach beyond old methods of unearthing candidates and establish new ways of getting noticed in a crowded field. In addition to external recruiting efforts, they must tap into their employees’ vast networks.
- Recruiting will not be a one-size-fits-all endeavor. I just told you what candidates want in a new position. However, recruiting is not a one-size-fits-all endeavor. It is essential to know your audience. Gen Z is entering the workforce with an entrepreneurial mindset and a need for ownership. They want to work for an organization that invests in upskilling and reskilling. Knowing what different generations of candidates are looking for from employers is critical. So is how recruiters and hiring managers communicate with them, whether it’s by phone, email or text. The key will be building relationships and keeping them engaged in the recruiting process.
- DEI will be more than a buzzword. Companies will charge their hiring managers and recruiting agencies not only to fill open positions but to recruit for diversity too. Recruiters with diversity training and certifications will have an edge, as clients rely on them to help build a diverse workforce from a variety of backgrounds, experiences and perspectives.
- Effective branding will give companies a competitive edge. Candidates continue to be selective about where they work. They want to be part of a winning team at an organization whose work makes a positive difference. As such, employers that want to stand out from the pack must captivate candidates in their brand. They must clearly define what their organization stands for and how a candidate can propel them to a higher level. They must also be mindful of their organization’s online reputation, considering that an estimated 86% of job candidates research potential employers and their reputations before considering an open position. But branding alone will not help attract best-in-class talent. The difference will be organizations with people brands. When Church’s Chicken set out to build out its global people brand a few years ago, it did so by engaging its employees in the effort. The results: improved customer satisfaction ratings, a greater sense of employee pride in the organization and a double-digit reduction in staff turnover.
- More emphasis will be placed on pay transparency. Two states — California and Washington — followed in the footsteps of New York City and Colorado in posting salary ranges for open positions. Pay transparency has sparked an interesting debate among recruiters, even at our company. Is it better to be open in sharing salaries as a way to vet talent for given positions, or, as a recruiter, do you want to get candidates interested in all the job has to offer (fulfillment, an opportunity to grow into more a more responsible role and more) before sharing what may be perceived as lower-than-expected pay. Regardless of how you feel, pay transparency is poised to grow in 2023, with more states enacting laws and companies establishing policies of their own. Initial results indicate that pay transparency is good for companies and candidates alike. Employers are becoming more effective in setting salaries, and by doing so, are noticing that candidates are a better fit for given positions. Economists applaud pay transparency, too, in closing wage gaps and reducing wage disparities.
- Remote and hybrid work will become the norm. The pandemic revolutionized life as we knew it, including the way we work. That isn’t about to change anytime soon, despite some employers eager to get their teams back into the office. During the next two years, 48% of the nation’s total workforce will do their jobs in a mobile or hybrid fashion, according to a report from Omdia. That’s good news for recruiters who can promote this benefit to potential new hires. What’s more, the report shows that more than half (54%) of organizations believe that employee productivity has improved, thanks to mobile and hybrid work.
- Employers will continue to promote from within. Finding the diamond in a dwindling talent pool will drive employers to do something they may have overlooked in the past: to look from within. Doing so would be a smart move, knowing that there are ambitious and hardworking individuals to grow with your company. Considering internal candidates boosts employee morale and can save organizations recruiting dollars too.
- Employee retention will become an even bigger focus. According to reports, the cost of replacing an employee is about six to nine months of that individual’s salary. For an employee earning $60,000 per year, that equates to $30,000 to $45,000 in recruiting and training costs. It's no wonder why companies are working harder to find and hire the candidate who is the best fit for the job at the start and to invest in more benefits and other perks to keep its existing workforce in place.
- Recruiting will continue at high levels. The economy is slowing down to quell inflation, but that doesn’t mean that recruiting will follow. Given the talent crisis, I believe recruiting will continue at a steady pace with collaboration between hiring managers and their recruiting partners.
- Companies will be mindful of budgets. That said, recruiting dollars will be carefully scrutinized, but by unbundling tasks, hiring leaders can determine which tasks they can handle and find ones that are best managed by their recruiting partners.
Some of these trends will require us to sharpen our skills, while others will empower us to think and act in new ways.
As recruiters, we must also be ready to search for the jobs of today and tomorrow. At my firm, we are busy filling roles in healthcare administration, manufacturing and technology. Although Microsoft, Google, Meta and other high-tech firms announced layoffs earlier this year, software developers, engineers and leaders in emerging fields such as electric vehicles and alternative energy are in demand. So are positions in the nonprofit sector, including in the executive ranks.
These jobs, like the thousands of other positions we help fill each year, are critical in bolstering our clients’ businesses. It’s what makes our work so fulfilling and our relationship with clients invaluable.
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