15 min read

5 Recruitment Trends To Shape Your Thinking In 2023 And Beyond

QUICK SUMMARY

What's happening in the world of recruitment and how to take advantage/avoid pitfalls.

Q1 of 2023 is in the rearview mirror (where did that go?), so I thought I’d take a moment to reflect on some of the prevailing recruitment trends shaping hiring this year and beyond.

Also, unlike a lot of these articles I come across, I’ll provide some tips for how you can adapt your recruitment process to avoid any pitfalls and get ahead of the competition.

Layoffs
Pay transparency
Excitement about AI and experiments
Interview processes
The decline of DEI hiring

1. Layoffs

Not a week has gone by in 2023 (although the trend arguably started in 2022) that we haven’t heard about a sizeable layoff round from either a big tech company or even some of the mid-sized ones too.

Conversely, every recruitment webinar or seminar I’ve been to recently keeps talking about the “war for talent” without acknowledging that in some areas there is going to be an influx of people!

These layoffs change the landscape of hiring in a few ways:

You need to change your thinking that "the best candidates are the ones who aren’t looking”

This mindset has been outdated for a long time and is clearly irrelevant now. I've had to argue against this assumption many times when hiring managers ask me to target the still-employed people from companies that went through layoffs because somehow they believe that’s where top talent is.

When we're talking about laying off thousands of people, or more than 5% of the workforce, this really isn’t the case. We need to stop overvaluing people who were not laid off—let’s not forget about the halo bias!

There are likely going to be a lot more candidates for your job openings and you will need to make sure you have a recruitment strategy on how to streamline but still assess well

This is especially the case if you’re not used to the influx of candidates and resumes to go through. Keep the focus on your team’s needs and don’t get sucked into the “eventuality hiring” which likely resulted in a lot of these layoffs in the first place.

Eventuality hiring means you hire “in case you need this skillset way down the line” rather than now or in the mid-term.

Don’t get complacent. Just because there are a lot of candidates out there doesn’t mean that every role will get an influx

These people will come from a specific sector and with specific skill sets that won’t be suitable for everyone.

The layoffs so far have been from a very specific subset of industries, so keep on top of your search, employer brand, and company culture game to keep attracting candidates.

Let’s not forget that, before the layoffs, in many markets there existed a massive talent gap that the new influx of candidates is barely going to fill. A great candidate experience is still the make or break!

Beyond Layoffs

This is tough to predict but, going off of previous cycles, the market will eventually recover and the influx is going to reduce.

This is the opportunity for companies to snag some amazing people who can make or break their company and help them weather the storms.

Focus on getting the right people for right now and ensuring that roles in human resources, legal, finance, and risk are covered sufficiently for your area. We’ve seen how that pays off later down the line.

Companies that deprioritise retention are also likely to suffer down the line as retention is not something you just switch on and off.

2. Pay Transparency

With the rise of legislation and schemes around the world, companies are feeling pressure to disclose salaries in job adverts.

For years there has been a cohort of recruitment and HR professionals advocating for pay transparency as the benefits are numerous (saves everyone time; helps close the gender pay gap).

However, I also understand that, in some situations, it’s difficult to display pay ranges in a simple way—especially with the rise of remote work.

I’m of the school of thought that it’s not realistic to pay everyone across the world the same, and I’ve had many candidates argue with me on that point. All I say is that I live in London and I can’t move out to a cheaper destination.

If someone in Bulgaria (where I’m from) gets paid the same as me in London, I am in a sense penalised for not being able to move. This usually shifts the mindset of people when they realise that it’s all relative really.

Pay transparency can be helpful here too, but it’ll probably take the form of pointing the candidate to a part of your website where you have local salary benchmarking. This will take time and effort but it’s worth it.

What we’re seeing now is pay ranges from $60K - 400K (I’m looking at you Netflix!). This is what I call box-ticking pay transparency. Does the legislation require a pay range for the role? Put something that is not really a guide at all.

As mentioned above, I understand it’s not easy to do in some cases, but, at the same time, it’s not a problem without solutions.

It takes time and resources to research pay ranges, which so far very few companies are willing to invest the time in. I think to be competitive in the landscape beyond 2023 you will have to put in the effort.

Thankfully there are tools that can help with that—Figures, Glassdoor (to an extent), and Payscale to name a few. Some are quite nascent in their development, but, with more participation in the pay transparency movement, their dataset will get more accurate and helpful.

As a side note, something I think we should all consider beyond 2023 is the remote hiring trend and pay in general.

A lot of companies have realised that they can recruit a good workforce remotely (subject to evolving laws of course) for a lot less than they will have to pay in expensive cities like San Francisco, New York, or London.

I can’t help but wonder how that will affect and potentially ruin the local salary economy if a lot of companies descend upon a country and hire the local workforce for salaries that are still cheap to them, but impossible for local employers to match.

Something to watch out for as governments may try to legislate on this. It’s almost like a brain drain without emigration.

3. Excitement About AI And Experiments

The number of posts I get on my timeline about artificial intelligence: Midjourney, ChatGPT— even my favourite tool Notion got an AI upgrade.

This truly is an exciting time when such tools are made accessible to the wider population and no, artificial intelligence isn’t sentient… yet!

For the moment it’s still something that requires a lot of guidance, but it can save a lot of time for sure. Here are some things I think it can be used for and where you need to verify its work.

Writing a first draft of a job description

Perhaps controversial, but there are a lot of examples of job descriptions it’s trained on and I’ve tested it quite a bit.

ChatGPT specifically can come up with pretty decent starter job descriptions. Notice the word starter!

You will still need to bring the job description to life for your specific role and company and edit it as appropriate, but it can save you some time. Also, job descriptions are not job adverts so you will still need to do the heavy lifting on that.

Get ideas on your branding/candidate outreach/candidate communication copy

ChatGPT is really quite good at rewriting copy in a particular style or tone. This could be useful if you’re trying to reach out to a demographic that is a bit different to what you’d normally reach out to. Of course, still review and exercise caution.

Sourcing Boolean strings

How many times have you been tripped up by a missed bracket or quotation mark? I know I have, but AI can be quite helpful there.

I asked Bing with AI to write a boolean search string for a software engineer with Python in Europe, then I asked it to break down Europe into separate countries and voila.

ChatGPT yielded very similar results, just with more countries added.

Jumping off point for an interview question bank

Sometimes you can get quite stumped on where to start with interviewing questions. ChatGPT is quite good at generating a few to get you started, but do not rely on it wholesale.

Chatbots to answer candidate questions

Potentially, chatbots could be employed to answer candidate application questions, but I haven’t seen an applicant tracking system or careers site reliably implement one yet.

General caveats

As you may have noticed above, I always say to review the work AI produces. It is still really important because, while it is really impressive so far, it is still a facsimile of intelligence at best and it can get things really, spectacularly wrong at times.

OpenAI themselves (the creators of ChatGPT) have admitted to bias being baked into the system and sometimes the AI experiences what it calls “hallucinations” AKA completely wrong answers but written in a compelling way. GPT-4 may address some of these it’s still very much a work in progress.

Also, work on your prompts. Like with any machine, the results are only as good as the instructions you give.

Evaluating AI

Now I’m no doomer and gloomer about AI, if anything I’m quite excited by the possibilities. But we have to be realistic.

Notice that nowhere in the examples I gave for AI use is the automation of tasks on actual hiring decisions or CV reviews.

That’s because I am of the firm belief that AI is still practically an SEO keyword search when it comes to CV reviews—and I know it is.

As far as AI is concerned, words have no real meaning. So what you’ll be encouraging is CVs akin to those early 2000s websites where they would type words in white on a white background to appear higher in the searches in order to game the SEO system of the time.

What if a candidate excels at their work but has a condition making it harder to write a CV? We’ve built in bias against them by using AI to filter CVs. I’ve bought applicant tracking systems for a while now and if they have this feature I always asked how exactly their “wonderful AI” is scoring CVs.

I’ve never gotten a satisfying answer. I can train humans to minimize bias, but can I do that with a “black-box” AI? AI may reject candidates based on superficial CV details, not their abilities. We need to consider how to prevent unfair discrimination from AI we can’t fully understand or control. While AI is still an evolving field in recruitment, it's essential to have the right tools to streamline your hiring process. For instance, consider integrating advanced recruiting software to ensure you're not missing out on top talent.

Hiring is still a higher-level, nuanced decision that cannot be outsourced to AI yet. If you would like a demonstration of how things like this work, check out this video where ChatGPT was asked to answer Physics questions. It did well in things like coding and formula but, in higher-level reasoning, it completely flopped.

We’ve gotten to a stage where not even the creators of the systems know what the reasoning behind their decisions is, they are so vast and complex.

ChatGPT is a bit better in that you can ask it why it reached a certain decision, but the depth of explanation and reasoning is not great. And would you do that for every single CV?

If a hiring manager came up to me and was rejecting a candidate “just because” I’d be ringing alarm bells, so why would I let AI off the hook?

4. Interview Processes

As someone who is currently looking for a new role as I write this, I am noticing interview processes getting longer and longer again.

On average, the hiring processes I have been in recently have been around 6 stages, which is fair enough because they’re for leadership roles.

But the same has been happening for a few contractor roles I’ve interviewed for as well. Recruitment methods as a whole seem to be moving backward, with more exclusionary testing and focusing on irrelevant things like how you did in high school (true story!).

I had a very frank chat with a few leaders on why they feel like they needed to do this and, through some poking and prodding, what came out is that there are so many candidates vs so few roles at each company now that they want to be really careful about who they add.

The instinct when it comes to being careful with hiring is of course longer recruitment processes. Get as many people as possible to interview someone to make a decision by committee.

It seems the more tremors there are on the stock market, the more unsure people become of hiring altogether. For the moment, with the way the market is, candidates seem to be more receptive to this change and the pattern is shifting again. Let’s see how long it lasts.

When the talent market stabilises a bit, we will likely see the call for more efficient processes return and pick up where it left off before the current turbulence.

This is why I still will advocate for not necessarily short and rushed interview processes, but efficient ones instead.

Introducing efficiency makes the process faster without sacrificing on the quality of the insights gained. Talent acquisitions will need to pick up the pieces again to make sure that there’s a balance between not wasting time and properly assessing new hires.

Invest in interview training and preparation!

5. The Decline Of DEI Hiring

Having spoken to a few organisations focused on diversity in specific industries, I have noticed that, on top of less DEI hiring, there are also fewer companies that are looking to work with such organisations and support them (e.g. Women in tech).

It does seem like there is a bit of a cooling off from companies to have either a diversity-focused recruitment team or a DEI lead within their HR team. I think this is likely because of three reasons (so far that I could find):

The initial impulse was all for show and, now that budgets are tight, these are seen as roles that can be easily trimmed
There was a backlash from the market on the tokenism of the whole scramble to hire these roles
All the roles are filled (unlikely, but it’s an option!).

I personally see DEI as the responsibility of all of us, not just HR but everyone in the company. However, I am concerned about this development.

Revival of meaningful DEI change

Where I think a lot of companies can win is starting to show not just that they have hired a DEI lead or, god forbid, a “diversity recruiter”, but have taken meaningful steps towards being inclusive.

This can take the forms of things like:

Putting your money where your mouth is by supporting relevant groups
Participating in and even leading events that contribute towards the cause
Training folks on how to spot and minimize their biases
Taking a skills and experience-based approach to hiring e.g. removing university degrees from the requirements
Working with your teams to include them in the mission of why DEI is important and helping them understand their place in helping (e.g. referring or advocacy)
Creating alternative paths towards a certain career (e.g. pathways for career breakers, candidates without a university degree, or apprenticeships)
See where you can bake flexibility into systems like PTO or working times
Ensuring your working culture is not tolerant of exclusive behaviour.

The major thing is that these have to be consistent efforts that help as many people as possible (and, of course, your organisation as well).

Closing Thoughts

There have been a lot of things rocking the world of hiring. Like with any disruption, you can either look to patch up the cracks or use this as an opportunity to try something new from the ground up.

This is an opportunity for companies that want to stand out and adopt the positive trends and get ahead of the negative trends arising.

Regardless of which one you want to focus on make sure you get your basics of recruiting—employer branding, sourcing, candidate experience and good interviewing—in order. They will never steer you wrong.

Some further resources to help you hire the best talent for your organization:

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