2023 is upon us, and every year brings with it a number of new trends and challenges. The world is rapidly changing, especially in the talent acquisition industry, so staying on your feet and remaining open to new developments is a core part of being an effective recruiter.
It’s also no secret that parts of the industry are in a difficult spot. Between warnings of an impending recession, rising inflation and expenses, and gloomy headlines about mass lay-offs in firms like Meta and Twitter, the atmosphere can seem pessimistic at times.
However, temporary slowdowns don’t mean that the need for labor will lower anytime soon, and many businesses are still fighting over talent in a tight labor market that is characterized by low unemployment and high demand. Some areas may see a slowing pace in recruitment, while it may stay static or even increase elsewhere.
2023 holds a lot of promise for many trends in recruitment, and, as they say, adversity breeds innovation. This article collects all the trends that will shape recruitment in the coming year, and explains why you should keep an eye on them.
The main mantra for 2023 appears to be focused on efficiency: recruiters will have to do more with less. Demand is as high as it has been in recent times, and unemployment is lower than ever, but budgets are being reevaluated and many companies are bracing themselves for economic turmoil. Still, recruiters need to use every advantage they can to secure talent, and it’s worth paying attention to how others appear to be doing it.
One trend that is already becoming increasingly evident is sustainable hiring. In a nutshell, sustainable hiring refers to a form of talent acquisition where recruiters prioritize retention potential and aim at nurturing candidates who are set up for long-term success. It requires talent acquisition and hiring managers to work hand-in-hand to create an environment that allows new hires to flourish with high quality of hire, providing long-term value for the organization and bringing down turnover.
Sustainable hiring is increasingly popular since it allows companies to invest resources into attracting and retaining talent as effectively as possible, which is particularly attractive in the current hiring climate, and will remain to be impactful in 2023.
Another trend that is becoming clearer as we move into 2023 is an increase in internal hiring and internal mobility. Driven by the need to do more with less, many talent acquisition teams are eyeing their existing employee base as an underutilized resource of high quality talent. There are multiple reasons why this is an excellent idea:
It’s easy to see why this is becoming increasingly popular. Internal hiring not only makes for sustainable hires, but also helps save costs while increasing employee satisfaction, which ultimately helps increase employee performance.
Recruitment Operations has been a growing field for a while, and 2023 is the year where it will continue to rise in prominence faster than ever. In short, it concerns itself with owning the processes, tools, and data that enables the talent team to recruit and hire effectively. RecOps is also responsible for setting the structure that recruiters will operate in, and for using resources as effectively and efficiently as possible. As we explain later, 2023 will be a year marked by high candidate demands, so the need for effective operations teams is rising accordingly.
This trend has been apparent for years, but it’s becoming especially notable now as teams are increasingly looking towards optimization of their internal operations.
To quote the old line from Lord Kelvin, “If you can’t measure it, you can’t improve it”. Being able to measure various elements of your recruitment process allows you to have an objective, data-driven approach to understanding where your strategy lies. It also clues you in on your strengths and weaknesses, and allows you to make smarter decisions about what works, what doesn’t, and what could use some improvements.
Data-driven hiring is a rapidly growing trend, and many TA teams are realizing that their ability to quantify their performance and outcomes has been lagging behind. New developments in recruitment technology have made it easier than ever for recruitment teams to increase their data proficiency skills and gain a quantitative understanding of their position within the company.
However, this increasing trend of adopting an increased focus on analytics and Recruitment Operations doesn’t mean that recruitment will lose its personal touch and become more mathematical and impersonal. For example, Candidate Experience data and Hiring Manager Satisfaction data can both be used to help shape recruiter performance evaluations in multiple ways and give managers a more holistic view of how their teams are performing, without relying just on operational metrics like number of hires and time-to-fill.
Similarly, many companies will continue to look into quantitative metrics that reflect on core competencies and performance of the talent acquisition teams. Data will reveal what parts of the process are optimized, which ones aren’t, and what actions need to be taken to rectify these issues. In short, we can expect to see data proficiency and analysis play an increasingly important role in talent acquisition in 2023.
Since optimization is the order of the day, it’s easy to see why recruiters are increasingly aware of the relevance that new technologies could have in automating repetitive and time-consuming tasks.
Recruitment technologies like assessment tools, screening software, or Candidate Experience analytics all allow recruiters to save time on repetitive manual tasks. Naturally, these are a strong contender for optimization.
However, since many budgets are facing increasing restrictions, movements towards automation have to demonstrate that they positively impact the bottom line and fit into a coherent internal narrative to effectively convince stakeholders of their value.
Another factor driving recruitment teams more towards an increased use of metrics is the increasing necessity to make their results easily understandable to all stakeholders. Results will need to be clearly laid out and communicated to all relevant parties so that informed decisions can be made about the direction the business should take to remain healthy and competitive.
Many talent acquisition teams are leveraging the data they already have, as well as data they know they need to have, to build internal narratives. These narratives can be used to drive change and further optimize Recruitment Operations, improving the competitiveness of the company in the talent market, their reputation, and even improving the bottom line. Consider the example of Wolt, who A/B tested Candidate Experience data before rolling out new tech, or Adevinta, who used it to convince stakeholders to optimize their interviewing process. Alternatively, Twilio used their metrics to optimize their assessment process and convince internal stakeholders that candidates preferred their current tool to any alternatives. Each of these examples proves the relevance of data-driven narratives to convincing internal stakeholders when it comes to revamping talent acquisition processes.
In 2023, many recruitment leaders are keen to leverage their existing data to make the case for why their department is an integral part of the core business, why resources should be allocated to them, and why structural changes should or should not be made. After all, it’s a lot easier to convince someone of why you’re relevant if you can point to data that directly speaks to it - or directly to how you affect the bottom line.
Candidate Experience has been rising in prominence as an increasingly relevant focus for many recruitment teams in recent years, and this year is no different. The differences in economic climate and a candidate-centric market do make it stand out more than before, and many companies are paying close attention to how they can deliver the best Candidate Experience and leverage it as an asset to their entire TA strategy.
One growing trend that has been apparent for a while now is a focus on employer branding. Ever since the pandemic, the labor market has undergone large structural shifts, and has largely reorganized itself as a candidate-first market. Unemployment remains at historic lows, but labor demand remains high. Candidates are keenly aware that, in most cases, they can be as picky as they want when it comes to prospective employers.
Recognizing this, 86% of employers call employer branding a “major priority” for the future, but 50% of employers admit that their employer branding metrics are very underdeveloped or absent. This spells a large opportunity for optimization for forward-thinking teams, and one that would give them a strong competitive advantage in the tight labor market.
Another readily apparent trend that is increasingly evident in the current candidate pool is Diversity, Equity & Inclusion (DEI). Simply put, candidates care a lot more about DEI than they used to, and this trend shows no signs of slowing down.
70% of minority candidates (Asian, BIPOC, Black, and Latinx) and 60% of White candidates stated that they had recently stopped an application short due to DEI concerns. Our data also points out that one of the main reasons that candidates withdraw from the process or turn down an offer is due to similar concerns about a company’s DEI policy. To be fair, large parts of DEI are also reliant on company culture and people management, but a candidate’s first impression of it is communicated during the hiring process.
This is why many recruiters are investing increasing amounts of time into inclusive hiring strategies, and continuously exploring new ways to measure the inclusivity of their practices and ensure they know what to improve.
Remote and hybrid work is here to stay. About 85% of recruiters say that they expect it to remain as the dominant form of work for most jobs, and employees seem to favor it, too. This is especially true for Gen Z employees, many of whom would consider quitting their jobs if they were forced to return to fully on-site positions. Clever recruiters will need to use every tool in their arsenal to their advantage, and offering remote or hybrid opportunities is one of the best options for those who can manage it.
In addition to increased remote opportunities, candidates - especially younger ones - are expecting increased compensation to counter inflation and the rising cost of living. Whether companies are willing to take this step remains to be seen. Still, recruiters can expect to hear higher demands than before for lower-level positions.
Finally, it’s also important to mention what has not changed, but still heavily impacts Candidate Experience. We can expect these categories to play a major role in Candidate Experience going forward, in addition to the new trends mentioned above.
All of these are drawn from our Candidate Values Report, which analyzed over 370,000 responses to Candidate Experience feedback surveys to discern what areas impacted their experience the most.
Feedback is crucial, and candidates (especially rejected ones) appreciate it more than anything else. We found that it had the highest correlation to cNPS, and that all types of candidates appreciated it when you provided constructive feedback on their performance. All signs point to it still being as crucial to Candidate Experience in the foreseeable future.
Having clear communication and alignment between hiring managers and recruiters is a great sign to candidates that the employer clearly knows what they are looking for. Our data shows that withdrawn candidates strongly dislike it when there’s a disconnect between their perception of the role and what the recruiter/hiring manager has in mind.
Taking a step back and looking at all of these trends together reveals an interesting aspect: recruitment is becoming increasingly strategic in its posture. For example, the rising influence of employer branding requires talent acquisition professionals to diversify their skills and cooperate more with the marketing department.
The growing relevance of internal hiring and sustainable hiring both point towards the increasing importance of high retention rates for new hires, which can only be achieved through a very close partnership with hiring managers.
The pressure to continuously optimize operations and trend towards using more data will require cross-cooperation with various stakeholders within the company as talent acquisition continues to build internal narratives and make its case for its role and standing within the organization.
Gone are the days of recruitment being simply a service department. The ever-important role of talent to a company’s productivity and profitability will mean that recruitment will continue to increase in relevance, while recruiters diversify their skill sets. Many recruitment leaders are also beginning to explore the impacts that their talent acquisition strategy can have on nurturing revenue and creating customers, further increasing the strategic posture of talent acquisition departments within companies.
Taken together, all of these trends are pointing towards a bright future for recruitment in 2023, and beyond. We can expect more data proficiency, greater Candidate Experience, more data-driven decision making, and greater involvement from stakeholders in recruitment.