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Annual Outlook: 2023 Hiring Trends

“While the hiring market may have softened lightly since 2022, the market remains extremely active at the beginning of 2023. We are still seeing a lot of postings and do not believe that will be slowing down any time soon,” says Amanda Graham, Director of Recruitment at Summit’s Toronto office, to start our conversation about the current trends in hiring.

And finding candidates to fill those roles remains a challenge. As Recruitment Manager Jessica Alcock says, “Applications are down, and both the number and quality of applicants has been low. We’re needing to reach out and headhunt more candidates, even for entry-level roles.”

Data from LinkedIn’s Future of Recruiting 2023 report shows this isn’t an isolated experience. Of the recruitment professionals surveyed, 87% said their function has become more strategic over the past year, and 57% predict recruiting will be more favorable to candidates than employers over the next 5 years.

With that in mind, here are some other recruitment trends employers should follow to give them the best chance at securing the talent they need in 2023 and beyond.

Pay transparency

“It’s typical for job postings not to include pay, but when you think about it, it’s like shopping for a home without knowing the price,” says Summit Recruitment Consultant Mariah Beahen. Salary transparency is a growing trend across North America, and one way employers have aimed to attract qualified candidates in a tight labor market.

In some areas, transparency isn’t just a trend—it’s the law. Colorado was the first U.S. state to pass salary transparency laws in 2019, and since then 7 more states have followed, with 15 more considering legislation. Canada’s Pay Equity Act went into effect in January 2021. At the province level, Prince Edward Island recently passed a law mandating salary information in public job postings and similar legislation was introduced in British Columbia this year.

Data from Indeed indicates job postings that include salary information more than doubled in the past 3 years, from 18.4% in February 2020 to 43.7% in February 2023. Even in regions where transparency is not legally mandated, including salary information in postings is a smart move for employers, particularly those hiring into high-wage and in-demand roles.

Economic uncertainty

“There’s an increasing disconnect between economic signals and the talent market,” Mariah Beahen notes. Record inflation and falling stock markets would normally suggest a slow labor market without a lot of hiring, but as Mariah points out, “The opposite is true. Job vacancies are high and rising and employers are hiring at a strong pace. It’s very much a job seeker market.”

In fact, the current economic uncertainty is likely contributing to ongoing talent shortages. As Amanda Graham explains, “Many who are in secure roles are not open to looking at new opportunities due to this potential economic instability.”

This is a reversal from 2021’s Great Resignation, when fast growth emboldened employees to seek new opportunities. Further complicating matters is the fact that this economic uncertainty is not consistent across industries. While several high-profile companies in the tech industry have announced large-scale layoffs, for example, other industries are continuing to grow. As the economic uncertainty continues, employers that are agile and able to respond quickly to market shifts will be best positioned for success.

The demand for flexibility

Remote work was the trend to watch in 2020 and 2021. But while employers are eager to go back to the office in 2023, employees are less willing to give up the flexibility remote work allows them.

Hybrid work is emerging as a popular compromise. Jessica Alcock has seen a shift since 2022, saying, “Last year, many candidates were looking for fully remote, but now I think more are open to hybrid roles as many companies are moving back to the office at least 2-3 days a week.” Whether it’s all-remote or hybrid, though, some form of location flexibility remains at the top of the list for many candidates.

Employers, meanwhile, are looking for a different type of flexibility in the form of contract, freelance, and gig workers. This is particularly true in the layoff-plagued tech industry. “Companies seem to be trading in full-time employees for gig workers,” Mariah Beahen says. “Gig workers provide more flexibility for both wages and time commitments, so instead of hiring back full-time workers, contractors seem to be their go-to choice.”

Posts for freelance and contract positions are growing at a faster rate than those for full-time employees. In the U.S. contractor roles increased by 26% from 2021 to 2022, compared to a 6% increase in full-time roles during that same span.

Economic uncertainty is a factor here, too. The scalability and agility of a contingent workforce appeals to business leaders who aren’t sure what the future will bring. It has advantages for candidates, too, allowing workers to keep the autonomy and location flexibility of remote work even as employers call full-time teams back to the office.

The need for speed

“The biggest trend I’m seeing in the hiring landscape is a sense of urgency and speed,” says Managing Partner Matt Erhard. “Lengthy hiring processes cause attrition in your candidate pool. An initially excited job applicant can get discouraged or lose momentum if a process takes too long.”

Cynthia McCutcheon seconds this trend, which she’s seen impact her clients first-hand. As she says, “Employers are losing candidates because their process takes too long, has too many steps involved, or they’re simply too slow to respond. Employers who are agile and able to identify a great candidate when they see them will have the best chance of bringing them onto their team.”

Speed and efficiency are particularly crucial for companies looking to hire Gen Z talent. “Transparency and open communication are key with this generation,” Recruitment Director Aman Sodi notes. She suggests outlining the hiring process and timeline candidates should expect in the job posting to keep Gen Z talent invested.

Jessica Alcock advises going into this same detail internally before you even start the search. Outline the interview process and decide who needs to be involved, then condense the process as much as possible. This won’t just help you keep Gen Z talent in your pipeline, she says, “but when working with any candidates who are active in their job search, if the process is lengthy you risk losing them.”

Employer branding

As Mariah Beahen notes, “A strong employer brand is a crucial part of job seekers’ research, and an employer’s reputation precedes them. The majority (80-90%) of job seekers will do research on Glassdoor or Indeed to find out what a company is actually about.”

Among the primary things job seekers look for are the company’s diversity and inclusion policies, their corporate ethics, and whether their values align. Emphasizing these areas in your employer branding materials can help you appeal to more job seekers.

The bottom line, Mariah says, is that an employer’s reputation is more important today than ever before when it comes to attracting the right people for your organization, and this goes beyond the materials on your website or social media pages. As she says, “Candidates are not just looking at your career site, they’re tapping into their networks to understand who employers really are.”

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