Candidates or Employers- who controls the hiring market in 2023?

After a long period of robust hiring, the talent market shows signs of a “pressure release” in 2023. Manpower’s much anticipated Net Employment Outlook – calculated by subtracting the share of employers that say they will reduce staffing from the share of employers who say they plan to hire – is +23% in the first quarter of 2023. Despite the positive ratio, that number is down 6% compared to Q4 2022.  

To find evidence of a throttling back in hiring, one need only consult the business media where news about layoffs dominates. Big Tech companies like Alphabet, Amazon, Meta, and Microsoft were among the first to announce consequential layoffs, but many other tech companies followed suit. In Europe, tech-related layoffs mount; Aiven, Paddle, Brainly and others have announced staffing reductions.  
 

“We see a subtle but meaningful pivot in the talent market right now,” says Richard Mosley, Global Client Director at Universum. “Specific talent segments, such as experienced cybersecurity engineers, have as much negotiating power as they did 12 months ago – which is to say, a lot. But others who were in high demand in early 2022 may find it less easy to switch jobs in 2023.”  

This demand evolution may ultimately help address the critical talent shortage of frontline and blue-collar workers, says Dave Gilbertson, vice president at UKG. As he explains, “Demand for employees, especially for frontline and hourly roles, remains strong. We expect to see a ‘blue-collar boomerang,’ as recently laid off white-collar and salary workers take up well-paying, highly skilled frontline jobs in the year to come, further easing the labor shortage.” 

Many COVID-era expectations are now the norm on the hiring market in 2023

Even as hiring cools slightly, workers still think they have the upper hand in the employer-employee relationship. A BCG study of over 90,000 workers found most (68%) say they are in a strong negotiating position when seeking a new job; just 14% say employers are in the power seat.  

And what do employees want most when it comes to offer negotiations?  

Compensation

Pay continues to be one of the most important factors when considering a new job. Pandemic-era changes have not altered that fact. In 2022, global inflation put upward pressure on compensation. In Universum’s research, “competitive pay” jumped from #8 to #3 in the global ranking of the most important attributes for university students considering a future employer, matching the 3rd place importance registered year-on-year among young professionals. 
 

Hybrid and virtual work opportunities

According to the BCG study, most people (65%) who can complete their jobs off-site want to work remotely or in a hybrid format. Forrester research shows some companies may roll back hybrid and remote work in the coming year, but they risk backlash from employees who regard virtual working as right. Katy Tynan, principal analyst at Forrester, says half of those who try to tighten their policies will fail. “In 2023, we predict acute confrontations in the companies that don’t listen to and collaborate with employees in shaping hybrid-work policies,” she says. 

Work-life balance

A strong job offer must also address work-life considerations – and this is especially true for Gen X and millennials. The key is flexibility – the ability to work at the time and place that best suits their professional and personal needs. (Some call this trend “anywhere work” or “productivity anywhere”.)  A research report from Korn Ferry underlines this: “In 2023, more candidates will look for companies that promote work-life integration: being able to put in hours during the day when it’s most convenient to take care of personal responsibilities when needed (think working a few hours in the morning, taking an afternoon break for an appointment or to pick up kids, then back to work in the evening.)” 

What does this mean for Employers? 

The overall outlook for the talent market in 2023 shows potential for a slight swing in power, as the talent shortages start to ease and employers begin to re-evaluate their hiring activities. Despite in-demand talent segments still holding bargaining power, others may find it more difficult to seek out new employment. As seen in recent years, compensation, hybrid work opportunities, and work-life balance continue to be rise in popularity and are usually at the top of the list for potential and even your existing employees. Employers that fail to listen to the talent they wish to attract and retain will most definitely risk failing in finding the best talent. As the talent market is ever changing, both candidates and employers must remain adaptable to ensure the best outcomes for all involved.  

Universum has recently released their Talent Outlook 2023 eBook. We canvassed recent research, analyst commentary, and business news to bring you the latest insights. In this report, we also highlight and translate key findings from Universum’s body of research – from the World’s Most Attractive Employer rankings to our annual employer branding survey. Download the eBook today to discover the key trends, findings, and important takeaways for capitalizing on the talent market in 2023!