Global Talent Trends for 2023
“And once the storm is over, you won’t remember how you made it through, how you managed to survive. You won’t even be sure whether the storm is really over. But one thing is certain. When you come out of the storm, you won’t be the same person who walked in. That’s what this storm’s all about.” - Haruki Murakami, Kafka on the Shore
Looking at global talent trends, it’s increasingly obvious that the Covid-19 pandemic was a watershed moment for economies - and lives - across the globe. In a short span of time, industries had to reinvent themselves in order to keep operating in a drastically changed landscape; employees learned to work remotely in unprecedented numbers, while employers had to learn to manage a geographically scattered workforce, along with new systems and processes.
Millions of people were forced to drastically change the way they worked; then, as the sense of urgency faded and the new normal became routine, attitudes changed as well. Wishful thinking for a return to normal turned to questioning: did we really want things to return to normal? No one wished for the pandemic to continue indefinitely, but the question - do we really want everything to go back as it was before? - was there, and the answer soon became clear: no.
Things are never going to be quite the same as they were before; the collective experience of a global pandemic has changed the way we approach work and life in general, and this is reflected in the global talent trends we’re set to see in 2023.
Remote work wanted
Remote work was far from unheard of pre-pandemic, but the need for social distancing gave it a decisive push - making it mainstream almost overnight. As energy prices go through the roof due to the supply crisis that started with the war in Ukraine, some companies are seeing the potential to save money: you don’t need to foot expensive electricity bills for light and heating in the office if your employees are working from the comfort of their homes.
Yet, employee demand for remote work has consistently outstripped the supply of such job offers. In February of 2022, 20% of jobs in the US were advertised as remote, attracting 50% of all applications; by September the same year, the remote job offering had fallen to 14%, yet they attracted 52% of total applications.
The main reason for this shift is a greater value placed by employees on flexibility and work-life balance, as well as compensation, which remains in first place. Employees are rediscovering two simple facts: that they are meant to work to live, not live to work, and that they can be as productive - or even more productive! - with flexible work arrangements as they can keeping their head down from 9 to 5 at a desk each day.
Particularly among younger employees, there is a much stronger focus on mental health, and on the value they can bring to the company - something more than just the amount of hours they spend working. A larger remote workforce can have a positive impact on other sectors of society, too, with less congested roads and fewer people on public transport at peak hours.
But it is important to talk about the other side as well. We must not forget that the employer-employee relationship is still about the creation of value, and all these expectations related to flexible working can be met or accepted by the employer if the expectations related to the performance of the activity and the achievement of the result are not violated. Some of the jobs allow remote working, and other types of jobs only work on-site. Therefore, it is also necessary for the employee side to see the advantages and the disadvantages of the home office, it also has its limitations, so that the cooperation between the employer and the employee works realistically and efficiently.
This partially justifies the shift of employers towards remote work but also explains why there are fewer offers than what employees would look for due to their interests. This ratio will probably be further refined in 2023, and the interpretation and willingness of employees to be present in person will significantly influence the supply-demand relationship.
More supportive workplace cultures
The shift to remote or hybrid working can be a difficult for employers; according to Microsoft’s 2022 Work Trend Index, in September 2022, 85% of leaders said that “the shift to hybrid work has made it challenging to have confidence that employees are being productive” - an attitude that the report refers to as "productivity paranoia".
This also causes stress for employees, who feel like they have to “prove” they are working hard. This leads to an unproductive loop in which the need to “act” busy in order to reassure one’s managers and employers actually wastes time. The entire process only serves to increase employee stress - not their productivity - and benefits no one.
In July, we wrote about the shift from an office culture to a supportive culture: taking the best parts of office culture to improve the lives of employees, while still getting the best from them, is the way forward. Remote working also makes work more accessible to disabled people who may have difficulty getting to the office every day - allowing employers access to a previously untapped pool of talent and a more inclusive, welcoming culture that supports a diversity of talent.
In addition, it also helps small regions catch up in terms of job opportunities since in the case of employees living in areas who have not been able to participate in value creation due to distance, it can provide new job opportunities without leaving their homes. This is especially true for those working in the IT field, where remote working and the exploitation of the opportunities that go with it, even beyond national borders, began long before Covid. This process provides additional opportunities to increase productivity by bringing newly qualified workers into the labour market cycle and thereby helping to equalise wages and opportunities.
Downward trend in hiring rates
Previously sky-high as they bounced back from the pandemic lows, hiring rates are now levelling off and are expected to decrease in 2023. This means employee bargaining power when it comes to demanding more flexibility, compensation and benefits is almost certain to diminish.
However, it doesn’t mean employers should dismiss these requests. Many employers make the mistake of writing off employees as an expense, while they are actually a resource - one that can become invaluable with the right incentive. What is indeed an expense is having to continuously plug recruitment and capacity gaps due to a high turnover, and it is in every employer’s interest to retain their more experienced workforce. Luckily, there is a simple way to improve employee retention…
Avoiding threatened layoffs
It is not only the return from the post-covid period that changes labour market conditions, but also the energy crisis related to the current war in Ukraine. For example, the increase in energy prices in some parts of Europe is so strong that companies are forced to spend far beyond the previously planned costs on this resource. To keep the products affordable and saleable in the face of rising prices, they have to cut costs elsewhere. It is feared that if companies give in en masse to this insult and want to save costs on wages, they may survive more easily in the short term, but their competitiveness will also decrease in the medium term, and at the same time, they may cause increasing unemployment in the short term, which again only reduces the bargaining power of employees. This effect is only amplified by the fact that the remaining employees will also want to work for higher wages due to rising prices with rising inflation.
However, the departure of an experienced employee leaving is always a loss, as it requires time and resource to hire, and often train, a replacement. In order to improve employee retention, employers need to make sure there is an internal career path available and mapped out. People are more likely to remain working at a company that offers an opportunity for growth and advancement. It’s no coincidence that, along with compensation, work flexibility and work-life balance, the possibility to up-skill is right there among employees’ main priorities. Each new hire should know, the moment they start working, what their possible career path within the company is.
With the aforementioned cost already squeezing many a corporate budget, it could be that we see a greater push to develop internal mobility programs at boardrooms around the country in order to retain top talent.
Even as hiring rates slow down, talent remains in high demand. If you don’t snap up the best candidates quickly, someone else will. Leaving applications to stagnate for weeks before deigning to reply, letting too much time pass between the application and the interview, or even putting applicants through too many rounds of interviews, will near-guarantee that your top picks will have gone elsewhere meanwhile. If they are your top picks, there’s a reason - and they’ll be someone else’s number one choice, too!
Whether it’s through a more streamlined process or with the help of an AI-powered hiring software, speeding up the recruitment process can only be beneficial, allowing employers to save time and money - and not lose the chance to bring a valuable new talent on board to help shape the company through the course of 2023 and beyond.
The greater good
What do we work for? Obviously, we all want a salary that is adequate to the value of our work, and enough to live on well. Most of us aspire to work to live rather than live to work - but this doesn’t mean that employees, especially from younger generations, do not care about the potential impact that their work may have on the wider world.
With a growing awareness of the ecological and social issues of our time, an increasing number of workers are thought to be placing more importance on ethics, and the company’s purpose beyond growing their bottom line.
This is often noticeable in consumer behaviour - think of the many people who’ll go an extra mile to buy from a company that is eco-friendly, for example, takes a stance against discrimination, or takes steps to ensure everyone in the production chain is fairly compensated.
However, this is true for employees as well. Knowing that a company is doing its part to make the world a better place is a huge push for employees to give their best: they too will want to do their bit. Who doesn’t want to make the world better, and who wouldn’t be happier to work for a company that strives to make a positive impact? A sense of purpose is a powerful thing and will bring the best out of everyone - employers and employees alike.
We expect to see these trends in 2023 - and perhaps yet more will emerge, in this rapidly changing economic landscape. One thing is beyond doubt: Covid-19 was a storm, and we as a society have come out of it fundamentally changed. Three years after it all started, we are still finding our footing.
There is no going back to the world of work as it was before; and while the new can be scary, it doesn’t have to be a bad thing. Rather than going against the current, it is important to embrace change and see how it can benefit everyone: the employers, the employees, and our planet.