I think we can all agree that 2023 was a challenging year for most in recruitment. Following the heady hiring sprees immediately following the pandemic, 2023 was the year that everything was dialled down. The market was quieter, labour shortages continued, economic uncertainty was a constant bedfellow, and there were skills gaps in a number of industries. It was also the year that AI boomed, both on the recruiter and the candidate side, prompting a rethink of processes and a need to understand and utilise AI to maximise operational efficiency. How the industry tackles candidate AI will be one of 2024’s biggest challenges.
So, without further ado, here are the trends that characterised 2023 in recruitment – and what we think will shape 2024:
Recruitment AI – the good, the bad and the ugly
We thought we’d jump straight into possibly the biggest trend of 2023 – AI in recruitment. Love it or hate it, AI exploded in 2023 and it’s not going anywhere in 2024 so recruitment businesses would do well to harness its potential to boost efficiency. The challenge here is to utilise the benefits of AI without sacrificing the humanity of recruitment that is so essential in a people profession. Used in the right way, AI can actively help you to focus on the human aspects of recruitment by freeing up time to spend building relationships with both candidates and clients. What will be the real challenge is to ensure that the AI isn’t making critical decisions based on the wrong data – screening the wrong candidates, for example.
Of course, AI isn’t just being used by recruiters – there are a number of tools that candidates can use to enhance their applications. Generative AI such as ChatGPT can write a comprehensive and personalised CV, a compelling cover letter for a specific company and an entire application. It can also send out thousands of applications at once – a potential nightmare for recruiters. This may mean that the early stages of the process will have to change – some are already foreseeing the death of the CV.
What is certain is that recruiters are going to have to focus more on talking to people – asking candidates questions in real time and in real life. Will we get to the stage whereby AI applications are being screened by AI? Will AI be able to recognise AI? At this stage it’s hard to predict exactly how or how fast AI-powered tools designed for candidates will change the recruitment landscape but they inevitably will. As Wave CEO Dave Jenkins has said, “We need to increase the quality at every stage, that’s job ads, sourcing, candidate applications, communications, interviews and feedback – only by doing this will we avoid an all-out AI war on recruitment!” This can be done with the help of AI as long as the focus is on quality and not quantity.
Skills-first hiring
Hiring based on skills rather than qualifications, where someone went to university or previous roles held just makes sense in a market hit by a skills mis-match and when it’s finally being recognised that fostering more diverse workplaces is critical to business success. It’s a trend that has grown in 2023 and is set to skyrocket in 2024. Wave has found a 19% increase from 2019 to 2022 in those not advertising any qualification requirements and, of those that do, there’s a huge 104% increase in jobs advertised without the requirement of a bachelors degree.
Looking at a candidate’s skills first and assessing whether they would be the right fit for a job based on the skills they would bring to it is where recruitment strategies are now heading. As finding qualified candidates remains an ongoing challenge for recruiters, re-thinking traditional recruitment strategies and overhauling outdated mindsets could prove to be vital in 2024. As well as opening up roles to candidates without a university education, it will mean those that want to pivot into another industry can do so if they have the right skills.
There are many transferrable skills that could allow people to work in an entirely different sector. Once you remove barriers to work, you open up the talent pool hugely, allowing those with the skills to do the job – however acquired – to apply and progress. What does this mean for 2024? Your job ads, interview questions and application screening all need to change to become more skills-focused.
The rise of the talent pool
With ongoing skills shortages, the importance of talent pools is finally being recognised and this is a trend we will see grow in 2024. Building and nurturing a pool of candidates that possess the skills needed for the jobs you recruit for means that you can directly approach candidates when jobs come in. In the race to place, this saves valuable time and money and is ideal for hard to fill vacancies and industries with labour shortages.
The right tech helps – an integrated CRM and the ability to quickly find (or be presented with) candidates that match your job requirements within your own database. Proper talent pool pipelining involves not just holding a repository of candidate details on your CRM but sorting and coding them, as well as keeping in touch.
This is where a big shift will happen in 2024 – no longer just placing candidates in immediate roles but planning for future roles. Proactive rather than reactive recruitment. With skills shortages, an ever-competitive market, and rising job board costs, one of the biggest recruiter new year’s resolutions should be getting into the habit of turning to your database to check whether you have candidates sitting right there that could be the perfect fit for your role. Every. Single. Time.
The new flexible working narrative
In 2020 we all worked from home. In 2021 there were tentative steps back to the office. In 2022 businesses tried to work out what worked best for them – remote, hybrid or back to the office 5 days a week – though not many were enforcing the latter. In 2023 we’ve seen a big shift in companies mandating a return to the office, whether for 2 or 3 days or full time. With an increase in the unemployment rate and Wave data showing an uptick in applications in Q3 and Q4, there is also the beginnings of a shift in the power balance back towards employers.
And yet employees and candidates continue to hugely value flexibility, placing it alongside salary in terms of importance. With research from Gallup finding that 9 out of 10 remote-capable employees prefer some form of remote work flexibility, offering hybrid working options will become more important, not less, in the race to attract the best candidates. Recent research from Fortune has revealed that Gen Z and baby boomers prefer to work in the office at least part of the time, whilst Millennials and Gen X want to work from home more so perhaps the ideal solution is to scrap company-wide policies and revert to individual choice.
It’s a conversation we’re likely to keep having well into 2024 and beyond. Whatever is offered, it is vital that it is made clear on the job advert. Don’t advertise a job as remote if 2 or 3 days in the office are required – that’s a waste of everyone’s time and hugely detrimental to the candidate experience.
A movement for salary transparency
There has been debate about including salaries on job ads for a few years now but it stepped up a level in 2023, with other parts of the world legislating for salary transparency. Seven states in the US have enacted pay transparency laws since 2020 and more than a dozen others have proposed similar legislation. These laws mandate that all job adverts must include a salary range or that the salary is made available upon request. The EU also approved the ‘Pay Transparency Directive’ this year, though that focuses more on employee rights and closing the gender pay gap (but is far more robust and far-reaching than the UK’s mandatory gender pay gap reporting).
When Europe and the US make big changes like this, there is often a ripple effect in the UK. Aggregator Adzuna certainly hopes so. Following its research that only half of UK job ads include a salary, Adzuna have gone as far as to start a petition to make salaries mandatory on job ads by law. And there is good reason for all of this. There are huge benefits for employers and recruiters as well as candidates, from increased applications from a diverse range of candidates, to time saved on both sides, to boosted candidate trust.
No-one has a crystal ball but – the potential for major global events aside – it seems likely that 2024 will be another reset year. A calmer market, with cautious hiring and recruitment strategies focused on skills, building talent pools, harnessing AI, creating clarity on flexible working, and moving towards salary transparency. However, if we’ve learnt anything from the past few years it’s to expect the unexpected so remaining agile will be key. The ability to pivot if and when you need to has become business critical. If you can do that, your recruitment business will be in a far stronger place in 2024 and the years beyond it.
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