3 recruitment trends that could shape the talent market

From increased use of automation to cost-optimised hiring strategies, here are the key recruitment trends HR should look out for this year. 
Hiring managers across Australia have been tasked with executing optimistic workforce growth targets against a challenging economic backdrop, according to a new report from ELMO.
ELMO’s 2023 HR Industry Benchmark Report , based on surveys of 700 HR professionals across Australia, found that organisations were surprisingly optimistic about workforce growth over the next 12 months, despite recession fears dominating  headlines. 
Just over three quarters of respondents expected their workforce to increase in size, with a further 15 per cent anticipating it would remain the same and just seven per cent predicting a decline.
In the midst of ongoing skills shortages and looming economic challenges, this optimism might seem counterintuitive at first glance. However, according to Kate Wilkinson, Head of Talent and Workplace Experience at ELMO, this trend can be put down to a rebalance of power in the job market.
“Because of the macroeconomic environment we are in now, it’s become more of an employer’s market rather than a candidate market,” she says. “But there is [pressure] for businesses to be more strategic by linking talent planning really closely to business strategy. So they’re growing with more critical hires.”
While recruitment was named as the top challenge for organisations in both the 2022 and 2023 editions of the report, the types of challenges hiring managers are facing have changed significantly, she says.
In 2022, competition for talent and the skills shortage was cited as the top challenge for recruiters. In this year’s report, attracting the right candidates was the top answer (cited by 30 per cent). 
A full breakdown of key recruitment challenges named by respondents can be found below.



Top recruitment trends for the coming year
Based on ELMO’s findings, there are three key themes that recruiters and candidates can expect to see in the next 12 months, says Wilkinson.
1. Focus on the quality of talent over quantity
Although organisations are focused on driving business and workforce growth, Wilkinson says that current growth strategies appear far more measured than we’ve seen in recent years. 
While last year’s economic landscape gave rise to a bout of panic hiring , recruiters are now in a stronger position to be selective in their hiring decisions, rather than maintaining what ELMO calls the ‘bums on seats’ mentality.
“Recruitment teams had a lot of pressure put on them last year to quickly fill roles,” she says. “What I experienced, and what my network also experienced, was that corners were cut in terms of recruitment processes – maybe, for example, a three-stage interview process was taken down to a two-stage process.
“Because that process was pretty fast paced, both the candidate and the employer weren’t necessarily checking the culture fit element and whether the purpose and the mission of the business was truly aligned with the candidate’s capabilities. [This year], it’s about getting the right talent into the business-critical roles.”
This priority shift has also been reflected in money and resource allocation; according to ELMO’s findings, the biggest budget increase for 2023 was for recruitment. This marks a departure from 2022, when remuneration and compensation/benefits was the biggest area where the budget increased.

Read HRM’s article on research showing that managers felt they were overpaying new hires last year.

2. Harnessing the power of automation 
Although organisations are grappling with an increased risk of cybercrime , ELMO’s findings show that the potential for emerging AI and automation softwares to streamline aspects of the talent management process makes them a tantalising option for hiring managers.
Applicant tracking systems, or automated software for recruiters and employers to track candidates throughout the recruiting and hiring process, are becoming a must-have tool for recruiters – over 9 in 10 respondents said they had implemented or were in the process of implementing an applicant tracking system, while only three per cent were not considering it at all.
“Talent acquisition [professionals] are big believers in automating recruitment, which can take away administrative tasks and allow them to focus on humanising the process because candidates have [only] got a short window to assess if this is the future employer for them. 
“The talent acquisition team can then do a more thorough job with the candidate experience.”

See HRM’s infographic on the best HR processes to automate.

3. Recognition and development of internal candidates
With talent and skills shortages still taking a toll on businesses in a wide range of industries, turning to internal promotions and upskilling to fill in the gaps is an increasingly attractive option for employers.
“I’m seeing many colleagues’ roles evolving at the moment, and [particularly] the evolution of the talent acquisition role to be more adept at discovering untapped talent, both internally and externally,” says Wilkinson.
With budgets under increasing scrutiny, recruiters might also be more inclined to promote internally to save on onboarding costs and help ensure the employee hits the ground running with minimal disruption to productivity, she says.
ELMO’s findings showed that HR professionals were overwhelmingly positive about the state of their internal recruitment processes. Almost four in ten respondents rated their systems and processes as ‘excellent’, which was a significant increase on last year’s report (14 per cent).
Wilkinson says that HR is increasingly looking to map the skills of their workforces to identify where an employees’ capabilities could be adapted or built on to plug skills gaps.
“Businesses need to pivot a lot faster than they used to in this macroeconomic environment, and so they need the employees to pivot with them. That’s why finding untapped skills is such a big piece of the assessment and evaluation when new talent comes in, but also with existing talent.”

Read HRM’s article on why your organisation should have an ‘inboarding’ process for internal hires.

While business leaders and job seekers alike are grappling to keep up with a rapidly evolving jobs market, with new recruitment challenges come new opportunities. HR professionals’ overwhelming optimism when it comes to business growth is a testament to the crisis-agility that the profession has fostered in the past few years, as well as its readiness to face unfamiliar challenges that may arise in the years ahead.

Do you want to sharpen your recruitment skills and learn how to ask the right interview questions? Sign up for AHRI’s short course to arm yourself with best-practice information.

 

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