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.
Shifting Focus From Growth Hiring to Retaining Top Talent
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.
How Organizations Can Create a More Resilient Workforce
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.
Health and Wellbeing
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.