Recruitment challenges in 2023 and how to overcome them

Recruiting has always been a critical function of any organization, and in recent years, it has become more challenging than ever. With the rapid evolution of technology and the changing dynamics of the job market, recruiters face a host of new challenges that require innovative solutions. As we move into 2023 and beyond, recruiters must stay ahead of the curve to attract and retain top talent. In this article, we will explore the biggest challenges facing recruiters today and provide practical tips and strategies to overcome them. From leveraging the latest technology to building a strong employer brand, we will offer insights into how recruiters can navigate the shifting landscape of talent acquisition and succeed in the years to come.

1. Skills Shortage

44 million by 2050 is the estimated shortage of workers in Europe, despite the recession, according to the UN. In the UK alone there are currently 1.13 million unfilled positions (Statista.com). Unemployment in the US, Canada, the UK and across Europe, in general, is at historic lows. Talent gaps will linger. Economists predict that difficulties in finding employees will haunt us for the next decade and beyond at least. Indeed, when CEOs are asked about their concerns and constraints for the business, 71% tells that they expect the talent shortage to continue (Deloitte 2022). According to Indeed & Glassdoor’s latest Hiring & Workplace Trends Report, the tight labour market is the number one long-term challenge in recruitment. This is backed up by other research: 

In Deloitte’s October 2022 CEO Survey, 50% of CEOs list labour and skills shortages as major disruptors. Moreover, 76% of recruiters admit that one of their biggest challenges is attracting the right candidate for the role (LinkedIn). The best applicants are involved in multiple concurrent processes and exit the market within 10 days. Tech industry employers are struggling to maintain a growth trajectory for the forthcoming year with such a narrow talent pool.

 

Solutions

Optimise processes with digital tools

This applies to both sourcing and recruitment processes. Invest in sourcing tools, don’t just rely on LinkedIn. New tools for sourcing the right talent are springing up like mushrooms after the rain. These have many advantages – a larger talent pool, finding contact details or sifting through a filter of desired skills. At Talando, we also provide a dedicated solution of a kind. Contact us for more details.

Once new digital tools have been implemented, the focus needs to be on getting the tools right and implementing them so that teams are involved in all the changes. It is crucial to reassure teams about new technologies and only introduce tools that will truly make work easier and faster without piling on additional responsibilities.

Consider contract collaboration

The intention to increase the number of temporary or contract workers in the 2022/2023 financial year is indicated by 48% of employers in the tech industry. This compares to only 37% in other sectors. Their hopes of succeeding through this strategy are confirmed by employees themselves: 61% of tech professionals are already considering a contract career. Contract workers are an effective solution for short-term staff shortages (Hays 2023).

Invest in your team’s development and upskilling

This is definitely a long-term strategy to build employee resilience. Upskilling and fostering a continuous learning culture provide multi-faceted benefits.

Hays research has shown that the number one benefit employees seek in a new role is constant learning and development. Procrastinating on development only puts your organisation further behind, as 70% of employers will offer upskilling and/or re-skilling by 2025 (World Economic Forum 2020).

However, a smart approach is needed: given the short lifespan of certain skills nowadays, especially in the technology sector, training should focus on soft skills and technical training that will stay relevant at all times. It is worth stressing that training alone will not be sufficient in embedding long-term shifts. These will only be ensured by creating and developing a culture of allowing new skills to be practised and occasionally failing in order to consolidate learning in the long term. However, it pays off handsomely: when organisations invest in internal career mobility programmes, employees stick around almost twice as long on average (MATCHR 2023).

2.Retention

Employee turnover in the tech sector is in high gear. In 2022, staff rotation in this industry increased for 67% of employers, which is higher than the average turnover increase across all sectors – 57% (Hays 2023). With the ever-increasing turnover of tech industry talent, employee retention should be a strategic imperative.

In addition, developing competencies within the existing workforce costs 1/6 compared to recruiting new talent (MATCHR 2023).

Research by the Work Institute (2017 Retention Report) indicates that taking into account lost productivity, recruitment and onboarding costs, replacing an employee can be as expensive as 33% of their annual salary. It is therefore clear that staff turnover can have a huge impact on your company’s bottom line. Having a workforce management system that facilitates the processes of identifying, developing and mobilising talent is then easy to justify in economic terms.

 

Solutions

Develop Employee Value Propositions 

Companies need to pay extra attention to their EVP. Put simply, you need to give them a reason to stay with your company.

An employee value proposition (EVP) is the unique set of benefits that an employee receives in return for the skills, capabilities, and experience they bring to a company (Michael Page). 

The talent shortage has now made employees one of the VIP customers. 

To create an effective EVP, your company needs to develop an organisational culture, a performance valuation system, career paths, as well as education and development opportunities. To retain employees for years to come, you also need to come up with a human capital strategy for those years. One-off spurts and impulsive action will not ensure the continued pull and retention of the best tech talent.

Listen to your people’s needs

With today’s skills shortages, escalating salary expectations and high turnover, tech talent now has a stronger voice. For starters, it’s worth beginning by recognising the ways in which the pandemic has prompted employees to re-evaluate their work and life priorities. This has resulted in a rethinking of their work and career or ‘Great Re-evaluation’. According to the Personio research, the most important things for SME employees after the pandemic are: 

• spending more time with family (71%),
• having a better work-life balance (71%),
• salary (68%). 

Coming slightly lower is a greater organisational purpose. More than half (57%) of employees prioritise working for an employer with a greater purpose than just making money – and this has become much more important among younger generations.

What motivates them to leave their jobs?

• Stressful work environment 32%
• Lack of recognition for their work 31%
• Lack of career development opportunities 30%

The most important question is to find out what makes employees stay at a company:

• Salary increase/bonus 54%
• More appreciation of one’s work 35%
• Better work-life balance and benefits 30%

Only by knowing the true needs and drivers of your employees can you effectively retain talent in your organisation. Don’t forget that each person may have their own preferences, not necessarily the same as the general statistics. Therefore, it is crucial to have discussions in a safe setting about their performance and career, where each individual can outline the personal pull and push factors and career opportunities they need.

Maintain good bilateral communication through systematic evaluations

Performance assessments help people grow, provide guidance on career and skills directions and inform them of their performance level. There is more to it, though. Such assessments are also a vital moment to make sure you’re on the same page, to thank employees for their efforts and to find out what their priorities and concerns are. Regular meetings allow you also to spot frustrated and overworked employees and implement countermeasures on time. Shockingly, however, a fifth (18%) of employees report that their performance is never formally evaluated. The Personio Study also indicates that since the pandemic, employees receive feedback from managers less regularly, and employees themselves indicate that performance reviews are neither fair nor frequent.

3. Hiring problems

According to 90% of HR managers, candidate-attracting difficulties are, next to talent shortages and retention, the main pain point for companies (Personio 2022). 

Recruiters struggle with under-application and the inability to reach the candidates they seek. Lack of interest from talent and bouncing doors multiplies frustration, lowers morale and increases the risk of burnout among recruiters.

However, it is worth acknowledging that right now is the perfect time to improve recruitment strategies to attract top talent. The fact that 46% of employees are leaving their jobs (Robert Half 2022) means that 46% of workers are also actively looking for new jobs. For recruiters, this is an opportunity to fill vacancies with the best talent around – as long as one tackles recruitment in the right way. 

Solutions

Change the structure and design of jobs

The tech sector is leading the way in embracing change in the workplace, with 41% of employers in the business saying they have undertaken a transformation in the last year to seize economic opportunities, compared to other sectors where the rate is only 35% (Hays 2023).

Conventional thinking about the team structure may not be the most optimal solution for your business. The new approach involves deconstructing jobs and identifying the work to be done and what is needed to get it done instead. If you can’t fill the open roles with a “one-job, one-hire” approach, it’s worth considering alternative ways to get the job done and become a skills-focused organisation. As a matter of fact, a talent-first approach is becoming imperative in the current employment crisis. How to implement it?

Break down the work positions and identify the tasks, processes and skills needed to perform them (Work Without Jobs). This approach has another advantage of saving costs (by not filling positions with external candidates), as well as the potential to increase productivity by reformatting work into in-house “gig” tasks, short-term projects and contract assignments. The model is based on the idea of creating an internal Talent Marketplace, sometimes called an “opportunity marketplace” (Beamery, 2022). This solution creates greater process transparency and allows you to discover the hidden talents of your employees.

Open your business up to remote hiring

58 % of HR managers identify increased flexibility and hybrid working as the most important employee attraction tool (Willis Towers Warson 2021).

Only 16% of companies worldwide are 100% remote (Owl Labs 2020). Yet LinkedIn research shows that postings with remote vacancies received 52% of all applications (data for the US). Such ads are already several times more popular among talent at the start, making it easier for the company to select the best employees. By offering this type of working model, you will instantly gain an edge over almost half of your competitors, as up to 44% of employers currently do not allow any type of remote working (Olw Labs 2021). 

This is not the only advantage of remote hiring. As well as expanding the available talent pool, your firm can potentially reduce the time it takes to find the right candidate and fill key roles faster. 74% of specialists expect remote work to become a standard working practice in the future (Olw Labs 2021). Other benefits? International talent boosts diversity within your company, which translates into increased creativity and, therefore, boosts innovation. This is essential to survive and thrive in the ever-changing global village.

Fine-tune the interaction with candidates

Bulk mailing and using applicants as a function in the recruitment process are a thing of the past simply because they are not effective anymore.

In order for the work to yield results, recruiters should use a “high touch” engagement.

This model involves, among other elements, sending tailored, more personalised and thoughtful messages, regardless of the contact channel. Still, email remains the best way to connect with candidates.

Neuromarketing will play a huge role. Marketing and recruitment professionals will join forces to create the most effective offer and increase the likelihood of a response. There will be an increased demand for expertise in the principles of how the human brain works as well as behavioural patterns and the art of persuasion.

Improve emotional intelligence

Soft skills have multi-level benefits. Emotional intelligence can steer a conversation in the desired direction and persuade a candidate, but there is much more to it. Although the supply of manpower is decreasing, there is a steady increase in mental health problems. Recruiters need to train the ability to identify candidates suffering from mental distress and also assess applicants for their soft skills and emotional intelligence contributing to their performance at work. The problem is becoming acute as it’s already difficult enough to recruit the right employee, so companies are determined to retain them for as long as possible. Every employee and every recruitment is a major monetary investment.

The first step for recruiters would be to develop the self-awareness necessary to recognise gaps in their own emotional intelligence so that they can then effectively sift through emotionally intelligent candidates. HR professionals who aim for success in the years to come should upskill in emotional intelligence. Dedicated courses and literature on the subject are available on the market.

Focus on the company branding

If you think that your brand image is not essential, it is time to revise such belief. According to LinkedIn, 75% of employees will not accept a role at a company with a “bad reputation”. A well-defined, authentic and properly managed brand is something that can attract talent more effectively than a remote working model. According to Glassdoor, 75% of active job seekers are willing to apply for a position if they see that the company is actively developing its corporate brand. A good reputation also translates into retention: organisations that invest in their employer branding can reduce turnover by up to 28% (Officevibe 2022). According to LinkedIn, strengthening branding efforts also has a measurable financial effect of reducing employment costs by up to 50%. One of the most forward-thinking strategies in 2023 consists precisely of investing in a strong employer brand rather than pursuing extensive recruitment efforts. Storytelling is not pie in the sky from the Pixar movie. It’s a convincing pitch to talent who want to get a sense of what life at the company will be like before taking part in recruitment. Throwing money at candidates doesn’t suffice anymore. They want to commit their time to an organisation with a solid work culture with objectives and values common to their worldview. 

Some HR experts even argue that in 2024, remoteness will no longer stand out and will be replaced by a work ethic.

4. Quiet Quitting

It’s not all about quitting work definitively. According to Gallup, Quiet Quitting means that “people are not going above and beyond at work and just meeting their job description.” Minimal employee engagement is alarming and the current HRDM situation is not helping. 59% of Managers do not have enough time to manage staff development as effectively as they would like, and on top of this 55% spend time on administrative tasks that prevent them from investing time in more strategic work.

(Personio 2022) Quiet Quitting negatively affects team performance and decreases morale and deepens frustration. Why? Because other team members have to pick up the slack when another employee quietly quits. How to navigate through this in a way that benefits everyone?

 

Solutions

Provide a well-being experience for employees while at work

The principle of reciprocity translates as follows: when your employees prosper, you prosper. By looking after them, you benefit yourself. When work lacks a positive atmosphere and is reduced to merely fulfilling duties and being a cog in the machine, there is no sense of satisfaction on a daily basis. This can be altered by thinking about providing well-being in a more immersive way, by taking care of employees physically, emotionally, mentally and even financially. Monitoring their needs and the effectiveness of HR activities (surveys, interviews, polls) is necessary.

Support, apply and enforce boundaries

Work beyond the scope of the contract, overtime, working at weekends or during holidays is a significant reason for quiet quitting. Employees are stressed enough by the current economic weather and need to clear their minds and relax in their free time. Power here is in the hands of employees, but HR professionals can support them by clearly defining availability times or monitoring stress levels.

Encourage employees to take PTO

Employees do not use PTO (paid time off), and the reasons for this vary. However, whatever the drivers, a break from work is necessary to reduce stress and burnout. Employees who maintain mental well-being perform better and this benefits your company. Long rest should be actively encouraged by team managers (Forbes 2022).

Acknowledge and reward successes

“A toxic company culture is the No. 1 reason for employees to leave their jobs in 2022”, states Flexjobs report. Championing success and recognising employees’ achievements is an essential part of a positive and supportive workplace culture. Job burnout, a common reason for quiet quitting, damages mental health, but also the ability to complete one’s work. Another factor is the feeling of isolation, which particularly affects remote workers. This is why it is so important to ensure frequent and quality communication in which supervisors inform employees of their value to the company and honour their achievements. Feedback on performance is a major motivating driver. A reward system acts as a catalyst here.

Offer flexibility and trust your employees

Working 9 am – 5 pm is a well-established model with a long tradition. It also means that it’s outdated and out of touch with today’s world. However, many employers find it hard to swallow. Still, they have no choice – if they do not switch to more flexible practices they will lose marketability. First, employees will become less motivated, and eventually, they will turn to a company that offers a more humane approach. This can already be seen in 2023, and this trend will only increase. Currently, 79% of employees state that they would be more loyal to their companies if these offered flexible working schedules (Flexjobs 2020). The first swallow has been the 4-day week, but there are other options for building flexible calendars. Research by Future Forum confirms that asynchronous working can increase employee productivity by almost 30% (Future Forum 2022). It is therefore well worth giving up a certain amount of control. There is also a financial incentive behind this solution: according to research published by Global Workplace Analytics, US employers could save USD 11,000 per remote worker per year if employees worked remotely an average of 2.5 days per week. These solutions are currently being introduced by technology circles with distributed teams. For the model to work effectively, it requires managing with trust and respect for work-life boundaries. There is no universal model for every company or even every team, which is why it is so important to take an individual approach and jointly develop an optimal working system. 

Conclusions

In the nearest future, companies will be faced with many challenges, which must be dealt with on an ongoing basis. Numerous global circumstances have determined that in 2023 the future is coming much earlier and faster than expected. Shifts in the priorities of generations entering the market as well as experienced employees, the galloping race in the war for talent, and new tools and technologies make it impossible to procrastinate when it comes to adapting to the market situation. A highly dynamic environment requires recruiting the very best talent. It is employees who will now be the focus of attention.

Fortunately, each of the challenges is manageable, you just need the right strategy. Strong corporate branding will determine the strength of an organisation. By treating challenges as motivators for change, any company can distil them into long-term success. Company performance is a reflection of the performance of the people who make up the teams, which is why supporting employees and creating a successful working environment and culture in which everyone can actively develop is the key to success in 2024 and beyond. This is a task for HR experts and departments, whose role is currently still being pushed to the background in some organisations. However, this approach is already backfiring and sidelining many companies.

If you want your organisation to flourish and gain a clear advantage in the market within a short period of time, contact the recruiters and HR consultants at Talando. We will help you optimise your HR department, propose simple solutions with multi-level and long-term benefits for your business, as well as support your recruitment processes and hire the best talent to take your services and products to the next level.