Despite looming recession fears, iHire’s latest research suggests the talent acquisition space appears cautiously optimistic for 2023.
In surveying over 500 U.S. employers for our 2023 “Hiring & Job Search Outlook Report,” we found that 42.7% were concerned about an economic downturn, yet 68.1% expected to increase their hiring volumes in 2023. Furthermore, 49.5% said they planned to give pay raises in the new year, and only 16.8% were worried about recruitment budget cuts.
So, is the labor market finally softening up a bit after a tough couple of years in which candidates held all the leverage? We have reason to believe the pendulum is swinging back toward a more optimal balance between employers and jobseekers; it’s not much of a difference, but it’s far better for employers than we saw in 2021 and 2022.
While employment trends vary from industry to industry (for example, technology is experiencing layoffs, and nursing is facing critical staffing shortages), our survey unveiled a few statistics that will give hiring professionals reason to be optimistic for 2023. Here are five of those reasons:
1. HR is adopting marketing best practices, driving more efficiencies into recruitment efforts.
Attracting, nurturing, and retaining the right talent requires HR to look through a marketing lens. Our data suggests that talent acquisition professionals are increasingly understanding this notion. For example, 54.3% of respondents planned to increase their efforts in growing their employer brands in 2023. Plus, the recruitment technology employers are implementing in 2023 closely resembles digital communication tools and techniques long relied upon by marketers: 35.5% of companies plan to use text messaging/SMS tools in 2023 to communicate with applicants, and 11.0% will use candidate relationship management (CRM) systems.
Now is a good time to reach out to your own marketing team, whether large or small, and see how they can help you treat your candidates more like customers to foster impactful relationships and create loyal future employees.
2. The labor market’s growing focus on professional development will raise retention and bridge skills gaps.
Today’s workers want to know they have room to grow within their organization, as stagnation can lead to stress, burnout, and 2-week notices. Fortunately, iHire’s survey showed that companies and candidates alike will place a greater emphasis on professional development in 2023. 45.8% of employers surveyed expect to provide more professional development and training opportunities this year, and 54.9% of employees said they would pursue more of such opportunities than they did in 2022.
Make a resolution to introduce or expand opportunities to upskill or reskill your team members in 2023. This could involve offering formal training programs; establishing mentorships, internships, or apprenticeships; or simply reimbursing staff for educational expenses. As a result, you’ll improve employee retention and reduce the need to continuously hire replacements.
3. DE&I efforts will continue to make progress, furthering improvements to organizational performance.
Employers appear to be moving their diversity initiatives forward. According to our survey, 33.5% of employers will grow their DEI efforts in the new year, while only 4.6% plan to pursue fewer DEI initiatives compared with 2022. At the same time, we are seeing more recruitment technology companies invest in DEI-related platform capabilities to even the playing field and attract candidates from all backgrounds.
However, our industry has learned that DEI is an ongoing process, and you won’t see results overnight. That’s why it’s important to avoid letting your efforts stall in 2023. Keep it up, and your company and culture will benefit from fresh perspectives and new ideas from often overlooked talent.
4. Talent pools are getting deeper as workforce participation rises.
Workforce participation hit 62.3% in December 2022. This is partially because more Americans are delaying retirement or are heading back to work in some capacity. Our survey data echoed that trend, as 40.0% of candidates said they were concerned about age discrimination hindering their job search or career growth in 2023.
Although skills gaps will persist in key industries (like tech and health care) and factors such as workers’ evolving workplace expectations and interest in changing careers will influence the labor market, increased workforce participation is positive news.
That said, ensuring your recruitment practices embrace jobseekers of all generations can deepen your talent pool and help you find your next hire quickly. For example, crafting job postings with more inclusive language and removing dates on résumés before reviewing them can prevent discrimination against qualified candidates because of their age.
5. COVID-related complexities in the workplace are fading away in most environments.
A small portion of employers (7.1%) and jobseekers (7.4%) iHire surveyed voiced concerns about COVID-19 impacting their hiring and job search capabilities, respectively, in 2023. Initially, COVID dramatically affected employee satisfaction, operational continuity, and more, but businesses have made significant strides in mitigating pandemic-related challenges. In many cases, they’ve turned these challenges into opportunities.
Now, much of the world is comfortable with remote work, virtual interviews, Zoom meetings, and distributed workforces. Whether we agree or not, society is moving even closer to pre-pandemic normalcy. This will ease stressors and complexity on the hiring front—and that’s a major reason for optimism.
It’s easy to get caught up in negative news surrounding layoffs, a potential recession, and talent shortages, but recruiting leaders on the front lines are seeing plenty of reasons to start the year off with optimism.
Steve Flook is the CEO at iHire.