HR Trends for 2023

January 23, 2023

What’s on the horizon for recruiters?

Ahh, the dawning of a new year. Time for fresh starts and new beginnings. Resolutions made, resolutions (hopefully) kept. Out with the old, in with the new. And it wouldn’t be a new year without a look ahead at the hr trends we can expect for this year, would it? Of course not.

If we had to give a theme to this year’s outlook, it would be: Doubling Down. In other words, there’s not much new under the sun; few ‘bleeding edge’ predictions. The dynamics shaping recruitment in 2023 are already established, for the most part. What we can expect to see this year is a doubling down. An increase in the pace, and the levels of urgency and importance in five areas.

Remote and Hybrid Work Wins Out

The battles have been fought, and the war is over. Remote and hybrid work is here to stay. Naturally, the pandemic played a large part in this, but we must remember that in many fields, the world was already moving in this direction. COVID didn’t start the hr trend towards remote work, but it broadly and rapidly expanded it to different sectors and different jobs.

The verdict is in: employees want it. When searching for jobs, many candidates simply filter out jobs that don’t allow some degree of remote work. That being the case, an employer who doesn’t include that as an option is limiting their access to a significant number of candidates. This doesn’t mean that everyone wants to work from home all the time, of course. In fact, surveys show that the vast majority of workers prefer a hybrid arrangement where they can work from home at least 25% of the time.

The market is responding. The Ladders projected that 25% of professional jobs across North America would be hybrid or remote by this time, and will continue to increase through this coming year. So far, that projection appears to be on track. The story is similar in Australia and New Zealand, where research firm IDC found that nearly 70% of employers will continue to allow employees to work from home one or more days each week.

There are holdouts, of course. Some companies have demanded that employees return to the office, and threatened consequences if they don’t. Let’s be clear: this isn’t a signal that the hr trend is about to reverse course. These are the last gasps of corporate leaders who are fighting for a return to the status quo, even as the world is moving on around them. Employers who dig their heels in and refuse to evolve won’t win. They will lose talented people to companies offering the flexibility employees want, and they won’t be as successful in recruiting more.

The growing pains will continue, as companies struggle with leadership, performance management, and employee engagement in a hybrid and remote world. But the wider and deeper talent pool for companies who choose to embrace hybrid and remote outweigh the challenges by a wide margin.

What’s next?

There are two things you’ll see as this hr trend accelerates. First, more companies and employees will see remote and hybrid as a baseline standard. Not a perk, but rather table stakes to be in the game at all. And secondly, more HR tech will be developed and deployed to support companies and remote employees. Remote interviewing software, recruitment software designed to better accommodate geographically-disparate candidates, collaboration platforms to connect and engage remote workers, and (sadly, yes) monitoring software as well.

Candidate Experience is an Urgent Priority

Employee experience has been a commonplace focus for years now, particularly in fields where talent is in high demand. Smart companies have also been making candidate experience a priority. In 2023, we’ll see more companies recognising that both are equally important.

Candidate experience is a continuum that begins with the very first touchpoint. For successful candidates, it doesn’t end until the moment the employee experience begins. For the runners-up, it continues until they’re no longer a candidate, and - ideally - after they’ve provided feedback.

Job boards and application portals must be user friendly, and in particular, mobile friendly. You don’t need gimmicks here, or to ‘gamify’ the process. They just need to work, and work well. If you really want to impress, stop asking candidates to submit a resume and fill out fields with the same information. Redundancy is frustrating. Companies who want to increase their conversion rate - the people who follow through and submit a complete application - need to eliminate as much friction as possible.

Candidates - particularly digital natives who are accustomed to immediacy in their communication - want rapid response. The use of ATSs, chatbots, and other kinds of HR tech and recruitment software will be on the rise as companies further automate rapid candidate engagement.

There is growing momentum towards compensation transparency. It’s now the law in some jurisdictions that salary ranges must be included in job postings, and more will follow. With the possibility of recession on the horizon, and rapid inflation rates, it’s important to candidates, too. Job seekers say they’re more likely to apply to positions where the range is posted in the ad.

Companies must streamline their interview processes. Candidates - especially those in high demand, considering multiple positions - will bail on hiring processes that are too long and cumbersome. Streamlining doesn’t mean taking shortcuts, or sacrificing quality in the process. It means examining every step to make sure that they meaningfully contribute to making a good decision. Eliminating steps that don’t. Using HR tech to automate what can
be. And being as timely and efficient as possible with the steps that remain.

What’s next?

There are two things to watch for here. First, data is invaluable for improving the candidate experience, and you can expect to see more companies looking for and using insights from the data that various types of HR tech generates. This includes ‘exit surveys’ for unsuccessful candidates, of course, but it doesn’t begin or end there. Data can be used to evaluate time-to-hire metrics, identify bottlenecks in the hiring process, pinpoint stages at which candidates are dropping out, and even assess the connection between the candidate experience and employee success. Secondly, the interview will become more of a two-way street. In the past, many candidates have asked questions of the interviewer to ‘check a box’. In other words, because they knew they were supposed to. In 2023 and beyond, expect top candidates to be interviewing the company just as much as the company is interviewing them.

Employer Brand is Essential

Smart companies have known for some time that a strong and positive employer brand is important. This year and going forward, any company that wants to recruit and hire top talent will have to put their attention here. To recognise that their employer brand is just as important as the more traditional customer marketing brand.

The concept of the brand is evolving as well. Sure, reviews on sites like Glassdoor are part of the equation, but it’s more than that. It’s the entirety of the employee experience. The product or service. The company’s image in the market. It’s the mission and vision, and the calibre of leadership. It’s the company’s commitment to diversity and equity, and its corporate social responsibility.

Of course, having a brand is half the battle. What you do with it is the other half. This year, expect to see companies taking a more proactive approach to activating their brand.

Social media and other online platforms are effective ways to broadcast company information and vacancies to active candidates. Companies that stop there will miss out on the real opportunity. These channels provide the chance to engage passive candidates proactively. To build a relationship that may translate into a future hire. Talent pipelining has been fairly common at entry-level and junior levels, but that’s changing. Recruiters are seeing this approach expand to mid-level roles as well, 84% pointing to this as one way to consistently bring top talent into the funnel.

What’s next?

First, expect to see more companies blending more content into their branding messages that speaks to the talent audience. There is no need to have two separate channels; one feeds the other. Customers can be your best employee prospects, and talented candidates may also be the customers you’re looking for. Second, as automated communication and data analytics becomes more advanced and widespread, more companies will use these HR
tech tools to proactively engage candidates relevant to more senior levels of the organisation.

Commitment to DEI isn’t optional

There is no longer debate about the importance of diversity, equity and inclusion in the workplace. Or, at least, there shouldn’t be. Ample data shows that companies with a diverse workforce and an inclusive workplace are more innovative, more productive, and more profitable. And yet, some surveys indicate that most employees don’t believe that their employer is doing enough to promote diversity.

The disconnect is almost certainly in the follow-through. It’s relatively easy for a company to include a statement about their commitment to diversity in their job postings and career pages. It’s more challenging to work to find talent pools that increase candidate diversity, and to identify and mitigate bias in the hiring process. It’s more difficult still to ensure that leaders are trained in - and employ - current inclusive management practices.

To this point, only a minority of recruiters have actively tracked the diversity of their candidates. In 2023, and beyond, this will change.

What’s next?

Companies will expect more from recruiters when it comes to supporting and advancing DEI initiatives. Recruiters will be expected to identify pools of talent from which to source diverse candidates, certainly. But these expectations will go further. Given the expanding use of data analytics (are you seeing a hr trend here?), recruiters will also be expected to identify where specific gaps exist in the hiring process – sourcing, interviewing, testing, and hiring – and to address those gaps and measure performance improvement. Recruiters will also play a leadership role in implementing strategies and technologies that can mitigate or eliminate bias in the hiring process.

HR Tech Goes Mainstream

By now, you may have noticed a common thread running through the hr trends: technology and data. You’re not mistaken. Not long ago, it was only the largest of companies who could afford to implement cutting edge HR tech - including recruitment software - if any at all. That’s changing. Software (increasingly cloud-based) is becoming more user friendly and less costly by the day. That means that it’s becoming more accessible to companies of all
sizes. The increased investment in and deployment of these technologies will enable and advance everything else happening in the field.

As mentioned above, chatbots will play a role in engaging applicants at the very start of the candidate experience. Companies will automate more functions at the early stage of the hiring process, such as a certain level of resume screening and automated communication. For high volume recruiting in particular, RPA (robotic process automation) can manage a huge number of repetitive tasks, reducing hours of staff time to minutes or even seconds.

Throughout the recruitment life cycle, advanced data analytics will be used by more companies to identify challenges and opportunities in their hiring process. To gain insights showing where they can improve. Data-informed recruitment will become the norm, measuring performance with KPIs such as time-to-hire, cost-per-hire, source of hire, vacancy cost, offer acceptance rate, and of course candidate diversity.

There are technologies that play a role at the final stages as well; we’d be remiss if we didn’t point out how useful Checkmate can be in pre-employment screening, reference checks, background checks, employment background checks, saving time and increasing success rates at these critical last steps.

What’s next?

As more recruiters and companies use data analytics to measure their performance against metrics like those above, predictive analytics is next. It’s great to know what your average time-to-fill was last year for a given position. Imagine being able to reliably predict how long it will take to fill that same role this year. Knowing how much it costs per day to have a position open is useful. Imagine being able to more accurately budget for all open vacancies, using data points such as the specific people in those positions, the average turnover at specific tenure levels, the cost of vacancy, and the time to hire.

One last look into the crystal ball

What about automation? Is AI destined to replace recruiters altogether? Quite to the contrary, recruiters will play an increasingly strategic role in business. Repetitive and routine administrative functions can be handled by technology. Recruitment will be increasingly recognised as a complex and strategic function, playing the advisory and consultative role that only a human can play.

The future is an exciting and bright one, recruiting friends. Happy new year, and we wish you a successful and prosperous year as these hr trends unfold.