Recruitment trends for 2023

With the New Year just around the corner, new opportunities arise and people are on the lookout to start their career afresh.

It’s a good time for HR to look back and look ahead in developing talent strategies.

The recruitment horizon is changing with the economy tightening and uncertainty over the impact of the new Commonwealth Government Workplace Relations bill.

It remains to be seen what impact that will have on the job market.

So, what will 2023 bring? HRD spoke to three experts to get their opinion.

Outlook for 2023

For the next year, there should be a lessening of intensity in the war on talent, according to Scott Stevens, HR specialist at 3D HR Legal in Perth.

“Whilst competition will remain, it will be lessened as available jobs decrease due to inflation, economic slowdown and increased visa approvals.”

Following over two years of border closures, the government has committed to a substantial increased number of permanent migration visa for 22-23 from 160,000 to 195,000 places, he said, and there will also be increases in state and territory visas from 11,200 to 31,000 places to address skills shortage, especially in nurse and technology settings.”

More than half of HR professionals say they plan to look for a new job in 2023, according to one survey.

Recruitment in 2023 will continue to test us, according to Roxanne Calder, founder of recruitment agency ESTS10 in Sydney.

“The nature of our skills shortage — such as our ageing population and birth rates not close to replacement levels — guarantees ongoing systemic challenges and means it won't revert any time soon.”

Even with the potential economic downturn and likely rise in the unemployment rate, the increased flow of job seekers will not suffice, she said.

“The root cause of our human capital issue is qualified candidates to do the job, not job seekers per se. However, compared to 2022, there is some slight easing and a chance to gain ground.”

Looking ahead, the recruitment market should remain tight for talent, according to Sally Park, chief people officer at Biza.io in Brisbane.

“Finding and retaining excellent people will remain challenging for employers,” she said, citing tech roles as tough to fill, such as senior developer and infrastructure jobs, “and [we] don’t expect this to change.”

Expectations around wages

The last couple of years have been marked by significant wage increases in some areas, said Stevens.

“However, with increasing inflation and less available jobs, we expect to see candidates having to adjust down their salary expectations.”

Already, we see a softening of some economic indicators, with job advertisements falling 5.2% in September 2022, and job applications per job ad rising by 10.3%, the greatest rise since April 2020, said Calder.

Whilst the unemployment rate is expected to decline to 3.25% by late 2022, the forecast is for a gradual rise thereafter, she said.

“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.”

“In short, with reduced job competition, we should see increased candidate availability with some changes in job seeker behaviour, “welcoming the motivated jobseeker, rather than the opportunistic one as witnessed in 2022,” said Calder.

“As businesses continue to focus on environmental, social and corporate governance (ESG) as important levers in employee attraction, so too will proof of such equitable practices.”

Businesses need to stop trying to outbid one another for talent in order to avoid a wage inflation outbreak, according to Westpac chief economist Bill Evans.

Attracting employees

Employees will continue to have high expectations for employers about what makes a “great place to work,” said Park.

“In response to COVID, employers needed to drastically change the way their people worked in order to maintain productivity when offices were forced to close. One of the changes most (office-based) employees were able to benefit from was increased flexibility in hours and more opportunities to work from home. We expect in 2023, many employers are going to want to return to ‘the way things were’ pre-COVID, with the majority of their employees working in the office, the majority of the time.”

Employees, however, are going to want to retain their flexibility “while conversely arguing their productivity is equal or higher than before,” she said.

“We believe employers would be best to continue adapting to meet the needs of their employees and trying new ways of working because COVID has forever changed our approach to work and it will never be the same again.

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Sector variations

Looking ahead to 2023, there will be continuing substantial demand in the construction industry, said Stevens, “as it copes with the backlog of demand from government spending on infrastructure and the stimulus to the housing market, and the continued strength of the resources industry.”

Most industries will maintain high hiring demands, according to Calder.

“Like 2022, industries such as healthcare, hospitality, education, technology, cyber security, construction, and e-commerce will look to recruit heavily. Qualifications in jobs such as nursing, social workers, teachers, IT and programmers, cloud engineers and trades such as plumbers, builders and electricians will be highly sought after. The lower-paying jobs such as cleaners, nannies, gardeners, wait staff etc. will also continue to be high in demand.”

Technology will continue to be a growth industry, as non-tech companies realise they need to build stronger in-house technical skills, according to Park.

“The tech hiring vertical will grow across all industries as organisations recognise the importance of the data they hold while managing the increase in dependence on technology because of the pandemic.”