Recruiting During 2023 – The Good, The Bad And The Ugly

Even the most optimistic need to prepare for another difficult year in recruiting. So, if you’re the Pollyanna type who only wants to hear positive news, I suggest that you immediately stop reading. Because from a recruiting perspective, 2023 is likely to be even worse than the last two years (which can only be accurately labeled as difficult). However, if you buy into my philosophy of “It is better to be prepared than surprised.” And you value your job security, it’s wise to start planning for the following opportunities and the problems that most recruiting functions and individual recruiters will likely face. 

The Good

Throughout 2023, I recommend that you prepare for the following positive/good occurrences.

  • The demand for those that recruit for critical jobs will remain high – even though the overall levels of hiring will be down dramatically. There will remain a strong demand for recruiting for mission-critical jobs in technology, data security, finance, healthcare, and hospitality. And that means that they will be a continuing opportunity for recruiters with strong performance records in these areas.
  • Recruiting technology makes significant breakthroughs – after years of little progress in developing and adapting effective recruiting technology. Amazon is signaling to other firms that more precise resume and candidate screening can be done with the use of automation. And even though automation will mean the layoff of many recruiters. Don’t forget that this modern technology will also result in the hiring of better-performing new hires. In addition, the amazing accuracy of new Chatbots like ChatGPT means that communications with potential applicants and candidates can now be done more often and at the same level of effectiveness as human recruiters. And this will help improve the selling of potential applicants. While at the same time reducing the ghosting of candidates. Also, expect automation to begin to replace recruiters in preliminary interviews. And in addition, don’t be surprised when personalized meta “candidate selling videos” begin to appear at the best companies throughout their employment branding offerings.

The Bad

Throughout this next year, you should be prepared for the appearance of the following negative (bad) things in recruiting. However, it’s okay to be somewhat optimistic because, with the proper preparation and expertise, most of these bad factors can be turned into positive opportunities. 

  • Hiring freezes will be common in order to avoid “overhiring” – during late 2022, a new recruiting term emerged. That phrase “overhiring” means the loss of billions of dollars at prominent high-growth firms like Amazon, Facebook, and Twitter. Because the recent volume of hiring at these individual companies didn’t decelerate. In order “to match” the decreasing revenue and growth rate at the company. However, avoiding future overhiring should be considered an opportunity to dramatically improve workforce planning and contingency worker hiring.
  • The acceleration of recruiter layoffs – with markedly lower employee headcounts, businesses of all sizes will need many fewer recruiters. However, this reduction will also be an opportunity for individual recruiting functions to cull out many of the “weak recruiters” that they were forced to hire during the 2021 and 2022 talent shortages.
  • The accelerated use of robots and software will mean reduced hiring – with many fewer employees and a greater need for cost-cutting. Companies will accelerate their consideration of substituting robots and software and jobs that are currently done by employees. These automated replacements will, of course, mean a significant reduction in employee hiring. However, it could also be an opportunity for recruiting to show its strategic value. If it can use data to develop objective criteria that much more accurately predict the jobs where human employees will be more productive, innovative, and effective than robots.

The Ugly

Unfortunately, a few additional strategic problem areas in recruiting have been painfully slow to change. The 4 severe problem areas that will continue to plague the recruiting function are listed below. 

  • The continuing failure to make an effective business case – the most impactful of all strategic problem areas in recruiting is the continuing failure for recruiting leaders to present an effective business case to its executives. Because without a pretested effective business case that quantifies the many business impacts of recruiting in dollars. Businesses of all sizes will continue to dramatically cut or underfund recruiting budgets. In fact, in one survey of HR executives, recruiting dropped from second to eighth in HR priorities. And in addition, without hard data on its business impacts. Expect a reduction in the funding for diversity recruiting and increased use of recruitment outsourcing that reduces your competitive advantage. And finally, realize that executives will continue to practice large-scale layoffs until they fully realize the economic benefits of practicing the higher ROI practice of Talent hoarding.
  • The continuing failure to shift to a data-driven recruiting approach – you can’t make an effective business case unless you have an abundance of data. So, the second most impactful strategic problem area in recruiting is the failure to shift to 100% data-driven decision-making. And the primary omission in the data area is the consistent failure of recruiting functions to measure the on-the-job performance of new hires (a.k.a. quality of hire). Other key data omissions include the failure to calculate and utilize new hire failure rates to drive improvement. As well as both predictive and prescriptive metrics.
  • The ongoing failure to shift to a strategic marketing approach in recruiting – the third strategic area where unfortunately recruiting has made little progress. Is adopting a strategic marketing approach. Where instead of intuition and best practices. A marketing approach based on candidate research data is used to make candidate attraction and employer branding significantly more personalized, powerful, and effective.
  • Not being prepared for the collapse of your tech vendors – because almost all recruiting departments will have dramatically lower budgets. Most will cut back or eliminate spending on both recruiting and HR technology. Unfortunately, this will weaken many current tech vendors. Which throughout the year may mean several bankruptcy or mergers. Which will result in the sudden dramatic reduction of your technical capabilities and the loss of critical data.

Final Thoughts

I predicted at the end of 2021 that the last year (2021) would be “the good year” among the two. Unfortunately, I was right. And now, I am predicting that the year 2023 will be the worst year for recruiting among all three of these last three years. However, rather than fretting or getting depressed. I instead recommend that all recruiting leaders and recruiters begin planning for and increasing their expertise in this year’s problem and opportunity areas.

Author’s Note

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About Dr John Sullivan

Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations.

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