For many, recruitment in 2022 was a shock to the system. The strong bounce back after the pandemic seemed full of promise. In February, job adverts were the highest in 25 years. To build and rebuild our businesses, we were all on the hunt for talent. Until the reality roadblock of mammoth proportions, i.e., no people and no skills. The unemployment rate hit a 48-year low, making the competition for talent almost barbaric.

Conjointly, inflation of 6.1%, the highest in 21 years increased salary and hiring pressures. With job seekers inundated with opportunities, offers were curated to the highest bidders. A melange of high business hope and frustrating, despairing lows. For most, it was unanticipated unless you are a seasoned recruiter. As a Managing Director of a recruitment firm, this is my outlook for hiring in 2023.

The nature of our skills shortage means it will not revert any time soon. Our ageing population exiting the workforce at accelerated rates and birth rates not close to replacement levels guarantees ongoing systemic challenges. Even with the potential economic downturn and likely rise in the unemployment rate, the increased flow of job seekers will not suffice. The root cause of our human capital issue is qualified candidates to do the job, not job seekers per se. Tackling recruitment in 2023 firstly requires a sharp reality check, recognising the scarcity of talent is here to stay.

Already we see a softening of some economic indicators. Total job vacancies saw a 2% decline in August,and our current unemployment rate has increased slightly to 3.5%. Whilst the unemployment rate is expected to decline to 3.25% by late 2022, the forecast is for a gradual rise. This is in line with slowing growth in activity as the gross domestic product (GDP) is forecasted to grow by just 1.75% over 2023.

Typically, in times of economic uncertainty, workforce behaviours see job security as the holy grail. However, with inflation rates in 2022 causing real wages to shrink by as much as 3%, we can expect continuing resignations in pursuit of higher salaries. Real wages are expected to catch up as the consumer price index (CPI) is projected to trend at 3.5% in 2023 and 2.5% in 2024, providing some eventual relief on salary pressures for employers.

Forget about the micro of hiring expenses and the cost of an empty seat; consider the exponential value created from deep employee engagement and retention. Purpose will be key in 2023 in providing a competitive advantage in attracting and retaining your talent.

Post-Pandemic and our workforce have been searching for ‘something’. To allow for other life priorities, 2022 saw a heightened focus on flexibility at work and balance. It has been a great year of ‘self’. But we seek more. The above conditions are not enough without emotional attachment to a more significant cause.

Purpose creates a sense of meaning. It connects the work we do with our feelings and values. Purpose internalisation is the next step, occurring when employees integrate personal beliefs and motivations with an organisation’s purpose. Research has shown when a company’s purpose is authentic, coherent and has integrity; employees are twice as likely to go beyond the call of duty. Provide purpose at work, and you will be ahead of the 2023 recruitment curve.

Human capital remains our biggest asset. Never before have we felt such hiring pressures. Yes, the skills shortage has been bubbling away well before the pandemic, but in the surge for growth and recovery, we now need desperately the skills and talent. Factor in the increased workloads and burnout, and we have another potential problem brewing. Be recruitment fit; accept the reality, adjust, adapt, read the collective and focus on your existing team for engagement and retention.

Originally published by www.ceoinstitute.com