Fall 2023 Talent Industry Update
By: James Baker, CEO, Keynote Search | September 2023
Back in early summer, we spoke about the shift to an employer market, and the reality is that it’s moving faster in that direction than we could have ever imagined. With the unemployment rate increasing for a third consecutive month, most predictions have that trend continuing until early 2024, where we will have unemployment rates above 6% in Canada. The continued wage growth speaks to employers doing what they can to meet the financial needs of employees, but often at the expense of new job creation. We continue to hear from employers about how they will not backfill vacancies or build excess capacity due to the strain that labor costs are placing on the business.
The reality of our work is that we get to speak to thousands of business leaders and executives every year. While conversations invariably revolve around change and how a project we are managing may be a fit, we also get to learn about the realities facing organizations of all sizes and from all sectors. As we move into prime recruitment season, there are several themes dominating the conversations we have with these senior-level employees.
1. Return to office is accelerating
If you are someone holding onto the dream of a fully remote role and are seeking a new position, then prepare to compete. The reality is that the number of remote roles versus the number of candidates seeking them is completely skewed. Businesses are almost universally moving to hybrid work models at a minimum, with plenty more exploring 4 or even 5 days back in the office. When we analyze redundancies and layoffs, remote workers are at significantly higher risk of being laid off. When organizations are hiring, they are almost always seeking someone who will come into their place of work at least some of the time. I guess when Zoom realizes virtual working doesn’t work as effectively, then we all should accept that we had it good for a while, but proximity to the workplace will return to being the norm for most of us. The rationale, which continues to be proven time and again, is that collaboration, learning & development, innovation, communication, culture, and engagement all benefit significantly from in-person interactions.
While this may be hard to hear, employers are consistently looking at strategic hiring, which translates more candidly to changing out key personnel to find new skills and experience better suited to the economic conditions they may be facing. This is especially prevalent within finance, marketing, and operations groups right now, with employers taking the second half of the year to consider the needs of their business in 2024.
3. Balancing labor costs
We continue to see employers aware that they can make changes to their workforce and bring in more expertise or experience for less money than they could 12 months ago. This is putting increased scrutiny on employee performance, with more clinical decisions being made due to the pressure the economy continues to put on small to mid-size organizations.
Our predictions for the next few months:
It has to get worse before it gets better, and our feeling is that labor will become even more volatile as candidate supply continues to increase and we see the start of some downward pressure on wages. This, combined with inflation, leads to a challenging reality, and we have to wonder what will creak, but also what will crack under this pressure. Our feeling is that businesses will become increasingly cautious, look to technology to increase productivity, and negate some of their labor challenges. AI adoption is already helping professional services like ours run leaner as tasks get automated. In summary, 2024 needs to hurry up and get here because 2023 will see more people made redundant and having to deal with the continued spike in the cost of living.