With uncertainty on the horizon employers need to be braced for incoming trends, understanding why pay, remote work, and belonging are going to be hot-button issues.
Organizations need to attract, engage and retain the right talent and skills to help them navigate this period of uncertainty.
Businesses doing this well understand how the talent marketplace will evolve, and how the talent agenda intersects with other HR responsibilities.
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The talent agenda has had a volatile couple of years.
Back in 2020, COVID-19 led to record-high redundancy rates. At the time, many HR leaders might’ve thought this would lead to them having their pick of talent. However, 2020’s talent picture quickly dissolved into the Great Resignation, unfilled vacancies, and many individuals deciding to leave the labor market for good.
It’s created a tight talent market that has lasted — not to mention changing everything employees came to expect of work: flexibility, increased delivery of self-actualization by employers, and personalized engagement via wellbeing perks and tailored development.
Now, firms from all sectors are battling to attract, engage, develop and retain the same in-demand individuals to help them navigate future disruption and change. Some are even pulling out all the stops when it comes to flexibility and pay, as well as delivery on individual purpose and values to get the competitive edge.
But, will the talent marketplace remain as tight going into 2023? Will in-demand skillsets evolve? And should the techniques used to attract, engage, develop, and retain top talent change once again? Read on to find out more.
Difficult hiring has been the talent story of the last 18 months. Indeed, LinkedIn data shows that 70% of global business leaders say it’s a challenge to hire top talent right now.
However, LinkedIn’s Head of Global Labor Markets recently wrote in the Harvard Business Review that the current US market might be currently looser than it first appears — with job openings to unemployment being closer to 1:1 than 2:1. Furthermore, recent headline-making technology sector layoffs, numbering more than 100,000 so far, could make in-demand digital skills easier to hire, especially if companies are set-up to access global talent.
In addition, Saltmarsh Economics analysis of European data shows that increasing numbers of working-age adults are becoming economically active again on the EU landscape. Whilst EU vacancy numbers are still high, a predicted rise in unemployment in 2023, coupled with immigration from Ukraine boosting the available EU workforce by 0.5%, could also make it less tight.
In the UK, it is more of a mixed picture. Whilst the number of individuals dropping out of the employment marketplace is still rising, vacancies are falling which, coupled with a slight uptick in the redundancy rate, could see talent become easier to get hold of for businesses. Yet this loosening isn’t certain: Indeed and Glassdoor’s Hiring and Workplace Trends Report 2023 predicts that high numbers of individuals aging out of work could help keep the market tight.
Of course, the spectre of recession will also have an impact that employers would be wise to take note of, too.
Although the labor market could loosen into 2023, businesses still need to focus on what it is top candidates want. LinkedIn’s Global Talent trends research shows that in the talent attraction stakes it is compensation and benefits that comes out on top here, with work-life balance a second priority, and flexible work arrangements coming in third.
Similarly, Indeed and Glassdoor research into the UK employment landscape found that it is benefits that can give employers the edge in talent access. As such, Lauren Thomas and Jack Kennedy, economists for Glassdoor and Indeed respectively, said: “Compensation is the key consideration for jobseekers right now, understandably so in a cost of living crisis. Benefits are also a key tool in attracting and retaining workers and [good employers] have adapted to people’s preferences.”
Yet, employers do need to be aware that whilst pay levels are rising at a fast rate, inflation means that, in real terms and in many locations, remuneration is falling at an also record rate. It might mean the need for creative rewards or delivering on other in-demand agendas, such as flexibility.
With individuals aging out of the workforce predicted to cause a talent access issue in 2023, employers might want to take note of what the youngest entrants to the labor market want.
Already, D,E&I was an important talent attraction tool — 2021 Glassdoor data on US, UK, and Canada candidates showed it was of prime importance when choosing a job — but a 2022 study of UK employees found younger workers care about it even more. In addition, Deloitte research found that good performance on D,E&I metrics is linked to better talent engagement and less employee turnover.
Coupled with this is a rising organizational understanding that belonging is important in obtaining the skills they need. The latest annual Human Capital Trends report finds that a lack of belonging can result in organizational skills gaps as a result of disconnected and uncared-for workers not wanting to develop the new skills their employers need (worth noting as skills fade rates speed up).
The backlash against remote work has begun — or, has it? Whilst the number of advertised remote jobs appears to be falling — from February to September 2022, remote jobs dropped from 20% of all US vacancies to 14% — and headlines chart a remote work backlash, with new Twitter CEO Elon Musk being the latest high profile example, remote work, at least in part, is still what workers want.
Even Musk has somewhat softened his stance on remote work, saying managers can make the call (kind of) on whether an employee can work remotely, perhaps understanding (or maybe not) that it is the 14% of jobs that a candidate can do remotely that attract over half of all US job applications. In the UK, Germany, and India, remote jobs also attract an outsized number of applications.
With more candidates looking for their employer to value their whole selves, interests outsides of work, and work-life balance — TalentLMS data shows that almost three-quarters of the youngest workers want mental health days and access to hybrid or remote work — employers who want the best talent should take note.
In-demand job skillsets are changing fast. Between 2015 and 2022, the skills needed to perform in a role well had changed by 25%, according to LinkedIn data. By 2025, they are predicted to change by another 41%. It means organizations need to keep abreast of what skills they need to succeed.
The latest Robert Half data on the skillsets employers want going into 2023 shows that teamwork — including listening, supportive behaviors, and not being siloed with ideas — as well as good communication, self-motivation, and problem-solving are all in demand. This links closely to 2022 LinkedIn data, where customer service, leadership, communication, and problem-solving all feature in the top ten skills employers are most likely to add to a job posting description.
In addition, Forbes predicts with so much economic uncertainty, resilience and grit will also be necessary, and individuals who can adapt to change will also be in high demand.
As Alastair Gill, ex-people director at GiffGaff and founder of consultancy Alchemy Labs told UNLEASH: “The talent trends of 2023 will be innovation and creativity. It’s time to be strategic with our work and lives and solve our current problems through innovative and creative thinking.”
Want to learn more about talent for 2023? Sign up to our complimentary talent trends webinar on 7 December.
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Multiple award-winning journalist, editor and content strategist
Dan is an award-winning HR journalist and editor with over five years experience in the HR space.
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