Chris put all of us at ease when he quoted Jason Furman (chief of the Council of Economic Advisors for President Obama), who said, “If you’re not a little confused about the economy, you aren’t paying attention.”
As we head into 2023, there are tons of conflicting signals everywhere in the world on the state of the economy, and this applies to the labor market. It can be hard to predict what’s going to happen in the world, business and talent acquisition this year, and thus difficult for you to plan your strategies.
To help you navigate the economy and labor market, and plan your strategies for the year, Chris shared his top 7 recruiting trends for 2023.
Before we get to the trends, let’s start by understanding what’s going on in the economy that’s causing the labor market to act the way it is.
What’s going on in the economy and the labor market?
Here’s how Chris described the current economy and labor market:
Job losses from COVID have recovered and employment has finally reached back up to pre-COVID levels. Some government policies that may have kept people on the sidelines of the labor force have aged out and the participation rate in the labor force is now really high. At the same time, demand for workers is also really high, especially in certain segments like manufacturing, healthcare, hospitality, travel and leisure.
According to Chris, “because we have a high labor participation rate, the demand for workers in the United States still can’t be met. There’s been this giant shift that we haven’t seen for decades, where demand dramatically exceeds supply.”
At the same time inflation has gone up, the stock market has gone down and the housing market has contracted. So we’re in an unusual situation where there is a downturn in the economy with a huge demand for workers and not enough workers to go around. The demand for labor has started to come down a little bit, due to interest rate hikes last summer, put in place to help manage inflation. More recently we have seen major tech companies, which focus on hiring for the future, instituting hiring freezes and laying people off.
So, given all of this, what does Chris believe we can expect for talent acquisition in 2023?
7 recruiting trends for 2023
1. Despite economic uncertainty, there is only a slight pull back in hiring
According to Chris, “despite the economic uncertainty, (housing slowing down, stock market down, inflation up: things that generally would look like a recession) we believe hiring is going to only gonna pull back a little bit.”
He continues that, especially through Q1 and Q2, there will be a consistent demand for workers along with a consistent supply of workers (based on the sector). We don’t know what will be in Q3 and Q4 of 2023, but for now, the labor market will remain steady.
This view is consistent with the views of our RallyFwd attendees. In our poll during the conference, only 2% said their company plans to reduce their workforce in 2023.
2. Pay transparency laws are changing the rules of the game
There is growing momentum in pay transparency laws, forcing employers to disclose pay and salary information, which historically hasn’t been shared.
This will make an impact on talent acquisition. According to Chris, with better information, job seekers will understand the trade-offs of giving up their free time in exchange for pay.
“If this gets more people off the sidelines of not working, it actually could help increase the supply of talent that we could recruit,” he said.
Chris shared original research from Appcast’s Economic Intelligence Unit, Recruitonomics, which compared labor force participation rate in Colorado (which implemented a pay transparency law) to Utah (which doesn’t have one). Utah and Colorado have very similar economies with an economic outlook that is relatively similar. When Colorado implemented pay transparency, the labor participation rate shot up.
And so Chris believes that this type of legislation could help solve some of the recruiting problems that employers face right now between high demand and low supply of talent.
In a poll conducted during the RallyFwd Virtual Conference, 45% of employers have already begun to include pay and salary information in their job descriptions.
3. The pendulum is swinging back to the center on remote work
After 3 years in a pandemic, some companies are starting to force their employees to come back to the office. Corporate leaders are finding real costs to not having workers onsite, though interestingly not in an expected way.
Historically, there is the notion that being together in one place is better for collaboration, coming up with ideas and building relationships. But research is showing that when people work from home, they’re working more, which is causing burnout. So leaders, while understanding people want flexibility, are also concerned about what the company is losing and the impact it can have on employees.
Chris predicts, “it’s going to impact your recruiting (depending on your company’s strategy). There are going to be micro markets of talent that just want to work from home, some that want to work in an office and some that want a hybrid approach.”
Whatever your company’s policy decision is, it will impact your Recruitment Marketing approach. Appcast research shows that if you talk about benefits in your job ads, you can materially improve the percentage of people who apply for your jobs. And besides health insurance, one of the biggest things that people are looking for are not actually benefits but work characteristics, like the remote work policy.
4. An employer’s reputation will become more important in recruiting
Transparency, in terms of people understanding what it’s like to work in an organization, continues to grow in importance. At the end of the day, the final differentiator in recruiting is the employer’s reputation, or as Chris said differently, “Are you just a good place to work or not?”
Chris explains, “The people that are good and nice and take care of their employees (and their employees like working there) are going to win in the long run. And, quite candidly, if you’re mediocre or you’re not very good, you’re gonna lose no matter how much you pay or how pretty the pictures are on your careers website.”
5. 2023 will see big changes in job advertising
According to Chris, $13 billion of job ads are bought every year just by U.S. corporations for use in North America (yep, billion). Currently a lot of that money goes to LinkedIn and Indeed, followed by about 10,000 other job sites in the United States that companies are buying from. But things are changing.
Chris said that some of the places that we interact as consumers every day will start to offer job advertising. Chris posed the following questions: “How is that gonna reorder the deck chairs on this particular ship? What is it going to mean for your budget? What is it going to mean for how you spend it? It will be a super interesting year for job advertising.”
The need to get better results from the channels we use for recruiting is growing. Our RallyFwd poll showed that 59% of practitioners said they can’t hire fast enough, and yet 51% said they don’t have the budget or resources they need.
6. Job boards are prioritizing the candidate experience
Another change to expect in the job advertising space, according to Chris, is the prioritization of candidate experience.
Chris shared one example of an increased focus on candidate experience: “[In 2022] Indeed implemented something called the one-to-one policy. This essentially says that for every job that a company has, you can only have one ad on their site.”
This policy gets rid of title and geographic expansions (popular in high volume hiring) where you take one ad, you come up with all the different titles or zip codes for that single job and publish it multiple times. In effect, you’re taking 1 ad and you turning it into 50 to get more applicants, and sometimes better quality applicants.
For those in high-volume hiring, cost per application has gone down, but so has volume. For companies just hiring a few people here and there, volume has gone up and, in many cases, costs have gone down.
Another example is including tags on job ads. These tags may include salary and pay, type of employment or how many people have applied (to name a few). Not only does this information help the candidate experience, but algorithms are now prioritizing tagged jobs, which helps you in your recruiting strategy.
7. Hiring organizations will focus on the metrics that matter
As a result of the supply and demand imbalance, companies now understand that they have different objectives for different jobs, and thus different job advertising metrics matter. It’s not always about cost-per-hire and time-to-fill.
For some jobs you’re going to want as many applicants as you can get quickly because time to fill is the most important thing, while other times you may focus more on cost and consistency of delivery. According to Chris, “You’re seeing a development of more nuanced ways of evaluating performance.”
Given the recruiting trends expected for 2023, Chris offered strategies that employers can use to be successful in recruiting this year.
4 strategies for successful recruiting in 2023
1. Get Smart
Stay on top of the news and thought leadership around recruiting, Recruitment Marketing, the economy and the labor market. The more you know, the more you can prepare and manage changes that take place.
2. When you’re hiring, cast a wide net
Since there’s more demand than there is supply, you are competing in a high-competition marketplace and, with the job board industry undergoing tremendous change, the best thing that you can do is diversify where you post jobs. Chris compares it to the stock market, “don’t buy one stock. Buy a mutual fund. Find ways to get your job ads out as far as you possibly can across the entire ecosystem.”
3. In job ads, highlight the things that matter most to job seekers
Appcast has done research that shows you can increase the number of applies you get from a set of clicks on your job ads by close to 40% if you have a title that is short and direct, include pay/salary information, a very clear and easy to understand statement of what the job is and you outline the benefits.
Chris mentioned that there’s also developing data that says if you talk about your values and DEI within job ads, you create a more engaging experience that drives more applications.
4. Keep the application process simple
In such a competitive environment, make sure you’re reducing the amount of people that abandon your apply process. The shorter the application, the more people will finish the application. Chris concludes his advice by saying, “this is probably the one thing that we can all do today that could dramatically impact our ability to succeed in recruiting.”
The hiring landscape may seem confusing, but by following Chris’s recruiting trends in 2023 and his strategies for success, you’ll be able to adapt to whatever may come this year.
To watch Chris Forman’s keynote presentation, and get even more insights and next-level talent attraction strategies for 2023, watch December’s RallyFwd Virtual Conference On Demand.