Coming off a whirlwind of hiring this past year, I am sure you’re wondering how 2023 will shake out. Will you be unable to keep up with filling job openings like in 2022? Or will the labor market slow down and shift some of the power back to employers?

While no one can know for sure, experts do predict a slowing of the labor market.

 

So What Actually Happened in 2022?

It was truly a bizarre combination of economic conditions. Not only did we have a strong labor market, low unemployment (fluctuating between 3.5% and 3.7%), and increasing wages across industries, but there was also persistent inflation with six rate hikes over the course of the year.

Bringing these stats full circle to the recruitment industry, it caused a very strange balancing act between companies trying to be financial conscious with the looming recession, yet still needing to bid high for strong candidates in the job market.

 

2023 Hiring Outlook

Economic experts predict a slowing of the job market due to continuing inflation, layoffs, higher unemployment rates, and the predicted recession. While this should tip the bargaining power slightly toward employers, there is one major thing that will be playing a factor in the coming years: demographics.

With the aging population of the U.S., the number of people within working age (15 to 65) will decrease by 3% over the next decade. Couple this with the number of people that chose not to re-enter the workforce after COVID, there is going to be a continued shortened supply of candidates.

 

What Can You Do?

While you can’t change the greater economic factors that will be impacting your business throughout 2023 and beyond, there are a few things you can do to set yourself up for hiring success.

Retention

It is far less expensive to retain a good employee than to attract and hire a new one. In fact, studies have shown that it costs a company on average 6-9 months of an employee’s salary to replace them (ex. for someone making $100K it would cost between $50-75K in recruiting and training costs to replace).

There are a number of strategies you can pursue such as increased benefits, flexibility, upward mobility opportunities, and wage increases to retain your top talent.

 

Build a Pipeline 

Retaining as many top employees as possible is always the primary goal, but we don’t live in a perfect world. No matter how great the opportunity or benefits are, employees will still move on, which is where pipeline building comes in.

Creating a deep bench of up-and-coming talent within your company to promote into vacancies would be a great way to build an internal pipeline.

Keeping your network strong and your company top of mind for potential candidates is important in building that strong external pipeline. You can do this through strong branding, a good social media presence, and even through hiring a recruitment firm to keep a steady pipeline of candidates ready to fill your vacancies.

 

If you are interested in working with us on building your top talent pipeline, you can reach out to us here.

Happy hiring in 2023!