2022 was a year of turbulence for both the economy and the hiring landscape. While the entirety of 2023 shows potential signs of improvement, the first half of this new year will likely deliver more of the same.
From inflation concerns to retention issues and ongoing workforce shortages, now’s the time to get creative about your hiring approach to get ahead of these challenges and set yourself up for success.
2 Continuing Trends to Watch
If workforce recruitment seemed particularly difficult last year, it’s because it was. Recession fears existed alongside the impact of a “great resignation” and “quiet quitting.” Many workers who left the workforce during the pandemic were still sitting it out in 2022. The volume of those who were looking for employment was not enough to fill all open positions. And, even if candidates became employees, they didn’t always stay that way.
It all added up to an ongoing struggle to find and retain workers. These are the two continuing trends you’ll want keep an eye on:
Inflation’s impact on job salaries. For a long while, the post-pandemic hiring landscape favored job seekers, whose desire to maintain flexible work environments and receive greater benefits created bidding wars for top talent, and prompted salary increases like never before. Coupled with the movement to ensure pay transparency, employers who were willing to offer big wages, and weren’t shy about advertising it, came out ahead.
Now, however, the tides have turned. Inflation entered 2022 akin to a really formidable lamb, but leaves it as a lion king. Some companies have been forced to lay off workers to deal with the impact of inflation on their industries, while many of the rest are grappling with the need to reduce salaries to offset rising costs. Lower pay levels tend to attract fewer workers to open positions, leaving a trickier talent acquisition proposition for organizations in 2023.
Retention remaining problematic. Gartner predicted that U.S. employee annual voluntary turnover was likely to jump to nearly 20% in 2022. Given that 2022 has just ended, we can’t know for sure yet if that prediction held. But we do know that turnover and retention were major hiring hurdles this past year. According to the Bureau of Labor Statistics, 4 million workers quit in October of 2022 alone
With a workforce shortage already plaguing many industries, getting ahead of retention issues in 2023 will be a top priority. Especially in a year where cost reduction is more important than ever. Consider this: according to Gallup, the cost of replacing one employee can range from one-half to two times the employee's annual salary. While that’s considerably less for contingent workers vs. full-time workers, having a revolving door of part-time and contingent staff still adds up when you think about the investment required to recruit, onboard, and train every worker.
3 Tips for Right-Sizing Your Hiring Approach
As you prepare to rise to overcome recruitment challenges, consider one of the most effective ways to extend strained resources and gain a workforce edge: right-sizing your hiring approach. This means becoming thoughtful and deliberate as to where, why, when, and how you pursue candidates, and it means considering having a talent acquisition partner at your side.
Refine the scope of your open positions. Does your job listing include every qualification under the sun for a position where learning on the job could fill in for a lack of experience? Or is your job listing so generic in scope that you’re inundated with unqualified candidates? Leaning too far toward either extreme can grind the hiring process to a halt, keeping roles vacant and further straining your workforce.
Right-sizing your hiring approach with right-sizing your open positions. Take a step back and assess all current openings. Make sure required job duties align with the needs of each role, and are realistic given the current hiring climate. You may find it’s necessary to split one role into two to have a better chance of filling it. This could also help you reduce salary requirements to offset inflation. Conversely, it may become apparent that two roles can be combined into one. The more thoughtful and deliberate you are, the better chance you give yourself of efficiently and effectively staffing your workforce.
Reassign internal roles to create new hiring opportunities. Redistributing your existing workforce can help you better balance your open positions and increase your chances of achieving a full staff.
Current employees understand your industry, operations, and company culture. It may be beneficial to shift an existing worker—as a lateral move or as a promotion—into a more complex, knowledge-dependent role where they leverage existing experience to make up for skill gaps. Especially if this role has been hard to fill using solely external applicants. You can then consider filling their recently vacated position by recruiting new full-time, part-time, or contingent workers. With a new group of candidates attracted to this newly open role, you may find that it's now easier to make a hire.
Recruit a staffing firm. Figuring out the right mix of workers to best fit your organization’s unique needs is already a tall order. Add in current economic and workforce hiring trends, and you may want to consider putting a recruitment agency in your corner. Professional staffing companies have their pulse on the latest hiring best practices, and can help you right-size your hiring approach so that recruiting, onboarding, and retention are all top of mind.
Want to learn more about the latest trends impacting candidate recruiting and workforce management this year? Along with what your organization can do to prepare? Download our hot-off-the-presses 2023 Hiring Trends Ebook.