We're in a different labor market, with fewer job requisitions and increased competition among job seekers. Read on to learn how to attract top talent and cultivate higher levels of employee resilience in this new environment.
Organizations face a very different hiring market compared to 2022, characterized by fewer job requisitions and a rapid increase in application rates. This represents a shift in hiring dynamics from a focus on growth to one in which top-quality candidates are the priority.
While overall engagement remained stable throughout 2022, falling strategy scores and the relatively low ranking of drivers associated with employee development, including growth, recognition, and reward, could undermine organizations’ ability to hire and retain top talent.
In order to attract top talent and unlock sustainable levels of productivity and innovation, organizations need to design an employee experience that supports long-term health and wellbeing, provides adequate flexibility, and evolves in response to employee feedback.
Insights from Workday Recruiting for the first quarter of 2023 highlight the shifting talent landscape, with a 10% decline in open roles compared to the same time last year—the first decline in requisition growth since Workday began tracking hiring trends in 2020—and a 4% decrease in job offers.
Job seekers will likely face increased competition for job offers, as we saw the average requisition/per-offer rate increase dramatically in the first quarter. This trend is most pronounced among organizations in the tech and media space, with job seekers expected to compete against approximately 27 applicants for an offer—which is a staggering 248% increase compared to the first quarter of 2022.
All of these signs point to the end of the growth hiring era. Market and economic dynamics are forcing business leaders to prioritize efficiency over growth, leading to a shift in strategy where they open fewer positions, extend fewer offers, and focus on hiring the best-quality candidates.
As organizations shift their focus from growth to efficiency, it’s important to understand the current makeup of the employee experience, including the challenges and opportunities that business leaders need to act on as part of their people strategy.
With fewer roles to fill, it’s likely that current employees will face increased pressure to deliver productivity gains. This raises important questions about employee health and wellbeing, most notably how to increase efficiency without contributing to burnout risk. Despite an improvement in scores during 2022, workload is still one of the lowest-ranking drivers across all regions—highlighting the fact that employees are already under considerable pressure.
An ongoing consideration for business leaders is finding the right balance between in-person and remote work. Even though 87% of workers feel productive in a hybrid work environment—mirrored by an increase in meetings and hours worked—85% of leaders say that hybrid work has made it challenging to have confidence in employee productivity.
Instead of focusing on the number of hours that employees spend in the office, business leaders are more likely to find success by focusing on outcomes instead of activity. By defining clear outcomes as objectives and key results (OKRs) and other measures of business performance, people leaders can focus on prioritizing the work of their teams and cultivating trust—preserving current levels of autonomy and preventing an increase in burnout risk.
Market and economic dynamics are forcing business leaders to prioritize efficiency over growth, leading to a shift in strategy where they open fewer positions, extend fewer offers, and focus on hiring the best-quality candidates.
As organizations come to rely more on existing employees rather than external hires for growth and innovation, business leaders will need to provide high performers with clear opportunities for development. While growth and recognition scores have improved across all regions, they are still some of the lowest-ranked engagement drivers.
Alongside managerial responsibilities and promotions, organizations can benefit from offering employees more internal mobility. By mapping skills and capabilities across the organization, business leaders not only create development opportunities for employees, but also allocate the right talent to the right places and improve overall productivity and innovation.
Ongoing changes in response to external pressures have impacted strategy scores in both North America and in Europe, the Middle East, and Africa (EMEA), dropping by 0.03 and 0.09 respectively. While there is always the possibility of future shocks, organizations will need to clarify strategic goals so employees can prioritize their work accordingly, in order to focus on high-value initiatives.
Our current analysis of hiring trends points to the end of growth-based hiring for the foreseeable future. Organizations are prioritizing efficiency and creating fewer job openings—hiring top-quality candidates is the name of the game. Job seekers are also experiencing fiercer competition, even in industries with historically low application-to-offer ratios.
To learn more about how current hiring trends are impacting the employee experience in different industries and regions, download the full report now.
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