2023 has provided a tough trading environment for businesses. High levels of inflation have continued to put the squeeze on consumer spending, a trend that looks set to continue into 2024.
So, as we enter the last quarter of what has undoubtedly been a challenging financial year for British industry, what impact, if any, has this had on recruitment? And what insight can businesses take forward to inform their recruitment strategies in the New Year?
To help provide some clarity around these questions, we’ve pulled together five key take-aways for employers, inspired by the recruitment trends we’ve witnessed in 2023.
What we can learn from recruitment trends in 2023?
1. Candidates still want flexible working, but will compromise for a higher salary
As Britain emerged from the pandemic, we saw many businesses pivot to a hybrid model of working, one which allowed employees to split their time between home and office working.
For a while, the flexibility to work from home became a key priority for job seekers, but in 2023 we’ve seen this emphasis switch, with flexible working now dropping behind salary and renumeration for the first time since COVID-19.
When you think about it, it’s hardly a surprising turn of events. Many households have felt the pinch from rising inflation, particularly in the increase of rents and mortgages. The desire to earn more money is a natural side effect of these economic circumstances, with consumers who have had to cut back keen to bridge the gap in their earnings.
2. Recruitment for new roles continues despite high inflation
Inflation may still be higher in 2023 than analysts had predicted, but that hasn’t prevented businesses from filling skill gaps in their organisations. Figures from Totaljob’s Hiring Trends Index reveal that 81% of businesses recruited new employees in the second quarter of 2023, with 34%—one in three businesses—increasing their total headcount.
In addition, businesses are also filling vacancies in their teams much faster, with the average hiring time reducing from 6.4 weeks in Q1 of 2023 to 5.8 weeks in Q2.
3. AI integration has increased as more businesses embrace automation
As well as expanding their workforces in 2023, 53% of businesses also adopted AI tools to automate some manual processes, with large companies being the most prominent adopters (79% versus 56% of medium-sized businesses).
In 2024, AI integration looks set to continue, with 19% of those already using the technology expected to increase their use, and 1 in 5 businesses planning to educate their staff on how AI can improve productivity, according to the Totaljobs’ Hiring Trend Index.
Of the larger companies looking to increase AI uptake in 2023, almost a quarter (23%) plan to use it to improve their recruitment processes. Although 52% of job seekers say they are OK with this, a stronger 72% feel companies should have a mandatory obligation to explain how they are using AI in recruitment, something businesses should bear in mind in 2024.
4. Non-traditional hires are on the rise as companies prioritise skills
Skills-led hiring is another key recruitment trend that’s gained momentum in 2023, as businesses seek to fill the knowledge gaps on their teams.
This has seen the emphasis shift from work experience and qualifications to the specific skills a candidate can demonstrate, a move that has paved the way for non-traditional hires to step into roles previously reserved for those with the ‘right’ CV.
For recruiters, this opens the door to put forward candidates who might, under other circumstances, be discounted for their lack of relevant credentials. For businesses, it offers a chance to diversify the talent on your teams, by prioritising attributes and skills over academic achievement and employment history.
5. Employer branding continues to play a key role in attracting talent
Despite buoyant recruitment among many businesses in 2023, talent shortages remain an issue in a variety of industry sectors. To combat this, businesses are having to invest money in their employer branding to attract top talent and coax it from competitors.
As high inflation continues to impact the job market into 2024, reinforcing a positive employer value proposition will become a key part of attracting new hires. Employers should discern what motivates employees and take proactive steps to adjust their proposition to fit these expectations.
Looking forward to 2024
With a concentrated pool of job seekers and an increased appetite for higher wages, the challenge to find and retain workplace talent is a trend we’re likely to see continue into 2024.
If, like many UK companies, you’re struggling to fill skills shortages on your team or you would benefit from professional guidance with your recruitment or retention strategies you can find more advice and support for employers at Reality HR.