An economic slowdown won’t make hiring any easier

If 2022 was a year of bullishness for companies and peak hiring volumes for Talent Acquisition (TA) functions, 2023 is certainly looking like a year of uncertainty.  We’ve had layoffs in the tech sector and in parts of financial services and, naturally, hiring reductions in both.  And whilst other sectors are not reducing headcount en masse it certainly looks like growth has slowed from the peak that we experienced in 2022.  In any other year we would be confident that a reduction in net hiring for our companies would make TA easier but don’t be fooled, despite hiring slowdowns, demand continues to outstrip supply for many skills and in many geographies.

I’m pleased to share the latest article that I have contributed to with my colleague Nicola Hancock.  In the article we explore the concept of a jobs-full recession where, despite declining GDP, unemployment rates are remaining at very low levels.  Analysts believe that in many markets we’re in a position of full employment where there are more available jobs than workers.  A simple LinkedIn jobs search today shows c. 5.6m open roles advertised in the US.  Total unemployment in the US as of February is 5.9m.  It’s a crude comparison for many reasons but it does demonstrate that hiring is unlikely to get any easier anytime soon.  In fact, as we reference in the article, US Labor Department numbers showed 10.46 million job vacancies in November 2022, with 1.8 jobs available for every unemployed person in the US.

And whilst growth may have slowed within many companies, staff turnover will remain a concern for HR leaders.  With the rise in inflation and the corresponding impact on cost of living, many workers are struggling to make ends meet and are understandably looking for new opportunities that will secure a higher salary.  As I share in the article, typical workers who change jobs will achieve a 9.7% increase in wages v’s a 1.7% fall for those who stay.  Hardly surprising workers are considering a change.

As I’ve been arguing for some time, now really is the time for Talent leaders to take new approaches to securing the skills and talent that they need for the long-term success of their businesses.  Taking a skills-based approach to hiring; hiring for potential; tapping in to new and hidden talent pools; revolutionizing internal mobility; designing consumer-grade processes.  There are multiple strategies that will give talent leaders strategic advantage. 2023 must be the year that talent leaders strive to innovate.   

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