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Current Talent Market Shifts That Will Impact the Remainder of 2023

Over the past few years, the recruiting market has undergone several significant shifts. From rapidly evolving societal norms to global economic turbulence, the recruitment industry has had to pivot, adapt, and rethink the traditional methodologies that had endured for nearly two decades. These trending shifts include how candidates are approaching job searches and entertaining offers, how employers are deciding what level of candidate to approach, the increasing impact that technology has on both job searching and talent headhunting, the current state of remote working and the ever-looming pressure of inflation.

1. Candidates: what do they need now?

With the national unemployment numbers ticking upward, many candidates are seeing a negative gap between what the market rate was 12 or 18 months ago versus now. Offers are either lower than before or composed of a higher variable piece that gives employees an opportunity for higher earnings but protects the company’s downside at the same time. Wise candidates will often aim to negotiate performance-based incentives that make their bottom-line costs manageable for organizations with cashflow or productivity challenges.

2. Employers: what are they willing to give?

While employers are generally still paying top dollar for strategic hires, the cycles of overpaying for talent are nearing their end. Throughout the early months of 2020 through until the beginning of 2023, there was an employer consensus that labour costs, specifically at the mid and junior levels of organizations were disproportionately higher than the return on investment. Meaning simply, that many employers feel that they were overpaying for talent, relative to the output. Since the spring of 2023, we’ve seen a gradual correction here that is re-grounding many industries and enabling employers to feel comfortable to pay market wages.

3. Impacts of advancing technology

Aside from the more complex advancements in artificial intelligence, companies are looking for more and more ways to reduce headcount without creating a drop in productivity. Scalable technology plays a role in this shift as companies look to move from traditional bookkeepers to automated accounting software and relying on chatbots like Chat GPT to create marketing content rather and hiring multiple employees, to name a few examples. While we’re yet to see the quantum leaps that advanced AI has promised to bring, companies of all sizes and complexity are relying on technology more than ever to save on human capital costs.

4. Current state of remote working arrangements

For about 3 full years from 2020 until 2023, companies made dramatic shifts to remote work environments. At first to protect the health and wellbeing of their teams, and then later to cut costs and retain in-demand talent. Since then, despite many government workforce unions pushing for blanket policies to support remote work, private businesses in virtually all industries are veering back to hybrid work policies with an emphasis on in-person working. The debates around which model is optimal will continue to be discusses for a while longer, however the sentiment from many private businesses, both big and small, is that productivity needs to recover, and employee accountability is more assured when working more closely with other team members than before.

5. Inflation’s pressures on candidates’ demands and employers’ thresholds

As with everything, economic factors always play a significant role in the labour market. Candidate demands must be balanced with companies’ ability and appetite to pay for resources. With the current cost of house, gas, and groceries, this will remain an issue for the foreseeable future as businesses will need to get creative on how they structure employee offers so that their cost of living can be met without having a negative return on the investment.

“Variable bonuses, enhanced benefits packages, clear performance goals, and professional development are just a few of the ways that both sides can balance the scales to create a sustainable employment relationship.”

– Paresh Mistry, Managing Director, LYNX Recruitment

As we approach the close of 2023, it’s clear the recruiting landscape continues its evolution, impacted by market, economic, and technological factors. For both candidates and employers, adaptability remains paramount, and compromise seems more important than ever. The balance between remote and in-person work, technological integration, and navigating inflationary pressures requires creativity and strategic management. By being mindful of these shifts, companies can still build a resilient, efficient, and inclusive workforce that consistently returns value.

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