Staffing Trends – 2023
2023 – What Will Change? What Will Stay the Same?
As the challenges and opportunities of 2022 get catalogued in our rear view mirrors, its time to get clear about what lies ahead.
We’ve identified five topics that have become talking points within our team – what we already know about 2022, and what we expect to be different in 2023.
Talking Point #1 – 2023 will continue to be a strange time for BOTH recruiting and retention.
While in 2022 (and 2021) we dealt with 50,000,000+ employees leaving their jobs as part of the Great Resignation, you’d think all that would be changing as announcements of layoffs happen daily. But you would be wrong. We’re still seeing employees quitting their jobs at unexpectedly high rates and employee engagement data showing even more employees getting ready to quit their jobs sometime in 2023.
Employers have been trying to respond but coming to grips with the fact that more pay, more benefits, more ping pong tables are no longer the fixes they once were. Think about it – with inflation eating up pay increases, government mandated benefit programs equalizing benefit “add ons”, its harder than ever for employers to gain differentiation around the basics.
And we’re now competing not just with other employers for the best talent, but also with work choices that don’t involve any employer.
Creating compelling reasons for candidates to work for you instead of another employer, or even to work at all, will continue to be a challenge for both recruiting and retention.
Missteps in getting workers back into physical work spaces hasn’t helped! Even our Northwest “bigs” were forced to revisit plans as employees (and by default job seekers) made it clear they were NOT ready to go “back to normal” if that normal required their physical presence five days a week. We know first hand that job offers that don’t involve some level of workplace flexibility have been problematic in getting acceptances. This is particularly true when trying to hire female workers who left their jobs in large numbers during covid, and now simply won’t go back to work unless the work requirements are family friendly!
From our perspective, an employer’s willingness to offer some form of hybrid work arrangement is a must – just to get in the game!
Employer branding has been a hot topic in the recruiting world for some time and will be more important than ever in 2023. As the “bigs” lay off, the availability of high talent job candidates will offer new opportunities for smaller companies to pick up talent that hasn’t been available to them for a while. How those benefits are identified and communicated will be very important to recruiting success.
We think small to medium sized companies have a great story to tell to any candidate who wants to “make a difference.” But we also know that for these companies to communicate authentically they need to master both the recruiting and retention sides of their business.
Employers who have figured out how to get their employees excited about their jobs and their mission will find it easy to compete in the race for talent. Companies who haven’t yet figured out an effective engagement strategy have been struggling with both recruiting and retention in 2022 – a problem that could get even worse in 2023.
Talking Point #2. And Here Comes Gen Z!
We are being told that 2023 brings us very close to the point where Gen Zs are a third of the employee and candidate population. We are already seeing how important it is for employers to offer up workplaces that cater to the needs and wants of this unique generation. Gen Zers put work-life balance at the top of their “job satisfiers” list and although they aren’t afraid of hard work, they also want other aspects of a healthy life. They like paid time off. They like hybrid work environments. And whether they work remotely or in house, they expect a management style that values them for the results they produce not how much time they spend looking busy. They also want mentorship as despite their reputation, most are very motivated to get ahead.
Now is the perfect time to get yourself ready to embrace the things that the Gen Zers want.
We think smaller work environments offer a lot of what Gen Zers look for in a job – work where contribution and mission matters, where close and personal relationships between bosses, employees, and co workers are the norm, where they have some say in where and how they work. These are things the bigs aren’t set up to offer, but smaller employers can.
Talking Point #3. Are we ready for whatever happens with the economy in 2023?
Statistically we entered a recessionary period back in Q2 2022 because it followed two back to back quarters of negative GDP – the textbook definition of a recession. Even though we managed an uptick in GDP in Q3, most economists aren’t ready to put a lot of money on what is in store for us in 2023. Few are anticipating a smooth sail even if the eventual outcome is positive.
As the only thing certain about 2023 is its uncertainty, we think employers are best served by keeping their staffing plans flexible – ready for anything.
While 2022 was a year of robust hiring which apparently hasn’t slowed down , in 2023 we are already seeing employers shifting their focus to more flexible staffing options – fewer direct hires, more use of temporary staff and other easily adjustable staffing models.
The temp to hire recruiting model is likely to grow in popularity – a way for companies to “quietly hire” . We are starting to get calls from clients who, instead of finding a replacement for a core employee leaving their team, are asking us to provide them with a “temp” – just keep the trains running while “quietly” auditioning that employee to become a full time member of the team. Their goal is not only to avoid the time and energy that goes into hiring direct, but also to outsource (to PACE) the costs of recruiting when recruiting budgets are non existent. We have several clients in the healthcare field who have already initiated hiring freezes as a way to cope with lagging revenues, but leaving their budgets for flexible staffing untouched. We think there is a message here as to what they intend – get work done, don’t leave customers hanging, but don’t make long term committments that we may not be able to keep.
Both traditional and strategic flexible staffing models, will get a good work out because they preserve the employer’s ability to get work done even while dealing with hiring freezes or lay offs.
The good news is that flexible staffing models will be easier to execute in 2023 than they have been for a while. As the bigs lay off, some very good top-tier talent will start to appear in the marketplace, willing to consider flexible work arrangements.
They will bring new skills and knowledge to the table that on the surface may look different from the requirements for jobs available in smaller businesses. An important recruiting talent in 2023 will be the ability to recognize the transferable skills and experiences gained from working in large work environments and how they will add new levels of value when applied in smaller work environments.
Know an employee who is hell bent on retiring or a former employee who has already retired? Ask if they night be interested in coming back periodically “to help” as a short term temp or contract employee! Boomers retired at historically high rates during covid, and we are seeing several of them coming back into the market in flexible, parttime work arrangements just to keep up with inflation – a win for both employer and employee.
Talking Point #4 – Employers will become smarter about about who they hire and who they retain!
We are encouraging our clients to use this period of uncertainty to think strategically about their talent needs – what skills, experiences and expertise are they going to need in their businesses – 2023 and beyond. Hiring a new employee each time a new need arises or an employee quits, is often the knee jerk reaction in a growing economy, but isn’t typically the best response during an economic downturn.
Now is the time for employers, particularly small to medium sized employers, to think very carefully about their current staff.
- Who are the “must keeps”? the “would like to keeps,” and “I can get by withouts” if you are faced with a need to cut staff?
- What are the qualities of the employees you’d like to hire more of? Who are the qualities of the problem employees who just don’t quite fit in with your group?
- With new technologies delivering opportunities to get work done with fewer arms and legs, what jobs or job tasks can be scaled back? What jobs need to be added to your team in order to support a business shift?
- What are the skills you are going to need to support the vision for the future of your business?
Lots to think about and as we move away from 2022 into 2023 and face the possibility of an economic downturn. The good news is that getting prepared now means that you’re ready for whatever 2023 brings. If we get worse case – a full blown recession – you’ll be ready to respond with a renewed vision of what you want to become. If we get best case, and the economy either clicks in or has a soft landing, getting clear about how to grow the people side of your business will help you move faster into the future!
Talking Point #5. Small to medium sized businesses will need external staffing expertise more than ever!
Self serving I know, but when times get tough and the high costs of adding internal resources makes those additions impossible, now is a great time to arm yourself with the right resources to help you thru the tough patches. The right staffing partner can help you navigate a really strange employment market, will know how to tap into new talent pools and deliver the people you need when you need them, and will bring you the fresh ideas you need about how to use more flexible staffing models.
And you need a partner, not a vendor. Need I say more?
Looking for ideas about how to streamline your recruiting and staffing operations in 2023? We’d love to chat!
As we prepare ourselves and our clients for 2023, we start by looking back on 2022 and make note of the staffing and recruiting challenges we worked on together.
- We’ve counseled hiring managers on how to look for “transferable” skills rather than wait for a “perfect candidate.”. We’ve provided them with actual data to show what candidates are and are not available for hire.
- We’ve helped supervisors figure out how to retain a valued employee, and how to terminate employees who become problems.
- And when its time to hire, we’ve helped our clients avoid the high costs of recruiting by using a customized temp to hire auditioning model.
- We’ve helped department managers design and implement a variety of flexible staffing models to streamline how they get work done, even when dealing with a hiring freeze or serious budget reductions.
- We’ve helped leadership teams get clear on why an employee would want to work with them, and helped them communicate their employer brand to new recruits.
- We’ve become the payroll agent for small and large groups of employees who our client needs to put to work, but wants someone else to do all the employer detail related to their pay and benefit administration.
We can do the same for you.
For more information about what PACE does, how we set ourselves apart from our competitors, and our focus on the unique needs of small to medium sized Northwest business, we’d love to have a personal chat. You can reach us by using the contact form below, emailing us at firstname.lastname@example.org or calling us at 425-637-3312.