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HR Predictions 2023: Recruitment

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The last three years has been a period of rapid transformation for Talent Acquisition (TA), culminating in a new era of work. And in 2023, organizations face challenges such as a shrinking global workforce, skills shortages, and new workforce/workplace expectations. Alongside, broader business survival challenges (navigating an economic recession, availability of resources/supplies, etc.) and pockets of COVID prevail. Organizations will face conflicting forces in addressing these challenges; for example, local versus global, headcount contraction versus expansion, contingent versus permanent hiring, new platforms versus existing tech optimization.

Several of the hot TA topics for 2023 include:

Borderless and remote workers

While many organizations are prioritizing the use of localized (onshore) business suppliers, in contrast, their TA activities will become more globalized. 2022 exacerbated companies’ over-reliance on a handful of lower-cost international suppliers as accessibility to goods was severely curtailed for various reasons, showcasing the risks of putting all their supplier eggs in one basket. In 2023, organizations will look at local alternatives: partly to de-risk themselves while thinking about broader ESG issues such as reducing their carbon footprint. Businesses will cast their nets far and wide to find the talent they need with the right skills, building on the pandemic-induced trend of using remote workers. However, companies will have to weigh new pros and cons associated with borderless/remote workers.

A broader audience reach is a plus factor, but with more jurisdictions to cover, the risks around non-compliance increase. Understanding how to pay workers and how much to pay them has changed. For specific skillsets, talent location is now irrelevant (as the shortage is so severe, there is no low-cost alternative location, but rather a broadly similar pay expectation irrespective of where the talent is based). Part of expanding the borderless and remote workforce is well-thought-out use of diverse talent pools, communities, and gig platforms: a trend associated with Direct Sourcing 2.0 (next-generation direct sourcing).      

Contingent versus permanent hiring: pendulum swing

The economic climate is already wreaking havoc in the tech sector, with well-known companies shedding workers. Still, many of the layoffs are likely the effect of inadequate right-sizing in the past (because of a lack of awareness of whether fit-for-purpose skillsets existed across businesses) or over-optimistic post-pandemic hiring (short-term reactive hiring and less strategic workforce planning).

While further recession-induced headcount reductions will likely be commonplace in 2023 across all sectors, organizations will also prioritize mission-critical headcount hiring (such as digital or niche skills, both professional and blue-collar) due to continued global economic uncertainty. However, with the global shortage of digital skills, those recently laid-off workers are seeing alternative job offers. In times of economic recession, organizations tend to increase their proportion of contingent hiring and decrease permanent hires, to reduce their risk of long-term headcount commitment and give them the flexibility to end contracts. While contingent roles are currently favored, candidates willing to embrace either role type will fare well in terms of future opportunities.

Showcasing employer/contractor value propositions

Organizations will work harder to promote their company cultures to be future-of-work fit for their audiences across all talent channels. The new priority is promoting broader environmental, social, and corporate governance (ESG) issues/credentials, in addition to diversity, equity, inclusion, and belonging (DEIB), work flexibility, financial and mental well-being, and career longevity. With tighter budgets, savvy companies will work to redeploy contract resources onto additional projects to maximize their recently-gained knowledge of the organizations where they are working rather than restart the hiring process.             

Skilling 2.0 to offer career journeys

All candidates will want to understand the potential for upskilling and reskilling while working for an organization, whether for a fixed or indefinite period. The successful attraction of contingent workers will require organizations to offer exciting projects and the opportunity for upward mobility within the organization, with support for upskilling or reskilling in adjacent skills. Contingent workers who enjoy the company culture where they work will be more inclined to stay longer if the right opportunities present themselves. A poor economic situation tends to dissuade temporary workers from job-hopping.

Attracting the next generation of permanent talent, or filling existing vacancies, will require organizations to showcase potential career journeys to candidates. Job hunters will want to join companies that value them as individuals and will give them opportunities to progress their careers at their pace, without being held back.       

Data, analytics, and intelligence

To attract and hire the best candidates, organizations must continue to showcase slick and speedy hiring processes, combining a mix of intelligent tech and human interaction. Rather than seeing any ground-breaking technologies emerging, 2023 will be a year of tech optimization for many organizations. Without the budget for embracing new company-wide platforms, existing stacks will be optimized by consolidating or augmenting them with tools to add much-needed functionality. Areas of interest in tech augmentation will focus on adding process efficiencies, tools measuring candidate surveys/sentiment analysis, horizon scanning (likelihood of jobs being replaced or augmented by tech), anonymized talent communities, and on-demand payments for contingent workers.

The appetite for more data and predictive/prescriptive analytics will grow. Notably, organizations will seek to identify bottlenecks in their hiring processes and aim to overcome them. Also, there will be more interest in ascertaining where and why candidates drop out of the talent attraction and hiring processes.

Additionally, HR data and analytics will expand beyond legacy usage (e.g., number of hires/separations) to strategically support all facets of an organization throughout the HR lifecycle. Examples of the enhanced use of these rich data include assessing a candidate’s cultural fit during the recruitment process, identifying employees with a high probability of separation, determining if the right types and volume of skillsets exist within an organization to meet projected product/service levels, and assessing pay and benefits at the individual employee level.


For full coverage of all recruitment markets, find out more about our specialist research programs by  following the links below; and to subscribe, contact Guy Saunders.

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