Recruitment and the labor market continue to be incredibly robust and competitive. Dynamics are shifting. Companies expect more people in the office in a hybrid function – while candidates are still pushing for remote work. There is a clear division within specific labor market demographics around this request. Reach out to us to learn more and for help on the best structure.
Many companies and hiring managers are also still operating on older recruitment philosophies when judging potential talent in the market – namely, wanting people to have stability and tenure in every job. The amount of job movement in the last 2.5+ years, let alone in January of 2023 (500,000+ people changed jobs), has disrupted this older way of recruiting. Virtually every candidate we meet with is fielding multiple offers at a time, further straining many companies’ desires not to rush their recruitment processes.
Compensation is a mixed bag. Actual salaries are still up, as is inflation; raises are minuscule, if not flat.
Payscale just released its highly anticipated 2023 Compensation Best Practices Report. Given all the talk about a recession, employers are tightening the proverbial rope (despite most layoffs so far being confined to the tech industry – which massively over-hired during the core parts of COVID).
The report highlights that fewer employers plan to bump up salaries this year, undoubtedly unwelcome news for most employees at their current jobs. Despite a continually challenging and competitive labor market, only 8 in 10 companies plan to raise salaries this year. The Labor market continues to be incredibly robust, with a significant uptick in job postings last week on Indeed alone. Employers need to keep in mind that not all job categories are equal – and highly skilled and specialized labor is currently at historically low unemployment rates; these professionals are also increasingly difficult to court and win over, as their salary, work structure, and benefits demands as well as the quality and the impact of their work, seems to weigh heavily on them more than ever.
More analysis from the PayScale report shows that roughly 1 in 4 companies plan an increase in wages of between 4% and 5%, with 12% reporting tiny bumps of between 3% and 3.99%—and 8% between 3.01 to 3.49%. Last year, 18% of those surveyed reported average pay increases of more than 5%, compared to 11% for 2023.
With inflation tracking around 6.4%, these smaller wage increases will continue to cause employees to search for new jobs where they can command even higher wage increases. Most reports highlight that roughly 60% of the labor market plans to look for and take a new role this year. Now is the time to streamline your recruitment processes, think about more significant raises for existing staff, and shore up and make your salary and benefits offerings more competitive if you expect to retain, let alone attract top talent.
If you need assistance with your recruitment, including strategy, process and benefits offerings, and hiring, contact us here.