Recruitment Trends and Challenges Facing Australian Businesses

How to future proof your recruitment process.

The last few years have seen unprecedented disruptions in when, where, how, and even why we work.

From talent shortages to a recession on the horizon, the recruitment trends and the market is more uncertain and competitive than it ever has been and it is increasingly more important for organisations to ensure processes and procedures are in line with the expectations of the market.

We are going to look the coming recruitment trends and what they will bring to the job market, how changing market conditions will impact recruitment, and what employers can do to evolve their strategy to attract— and retain—the best talent.

State of the market

Job vacancies in the Australian labour market have not just recovered from the Covid pandemic, they’ve doubled. According to the latest Australian Bureau of Statistics release, there are 470,900 job vacancies in Australia, an 85% increase since November 2020. As of September, 2022 unemployment sits at an incredibly low 3.5% as Australia approaches what is considered full employment, meaning almost everyone willing and able to work is in a job.

The market as it stands is very candidate-driven, but that could change significantly as recent signals point to a downturn in the economy. Australia is forecast to enter a recession in 2023 due to a further slowing of the economy and a spike in unemployment. The governments increase in the permanent migration program ceiling to 195,000 from 130,000 in 2022-23 is set to help ease widespread, critical workforce shortages and strengthen the pipeline of skilled labour.

With these looming changes in mind, we explore the challenges and trends facing employers in 2023.

A look at short-term hires and boomerang employees

Instead of relying only on full-time employee (FTE) hires, the latest hiring trends show companies are increasingly adopting contract employment by looking to interim executives and professionals to meet scaling workforce needs.

According to a Korn Ferry survey, the number of global interim workers is expected to grow in 2023: to roughly 78 Million, from about 43 million in 2018. The same report also stated that 80% of large organisations plan to increase their use of contract workers in the coming years.

There are numerous benefits to a short-term hiring approach, one of most important ones being the cost. The cost of hiring temp workers is generally more effective than the cost of hiring permanent employees. In addition to this, people who choose interim or contract work are often highly skilled, project-based individuals who can quickly adapt to new environments. They can bring unique skill sets and experiences needed for finite projects during uncertain times, while minimising risk to your business.

When it comes to boomerang employees, they are not a new concept, in fact 15% of professionals who quit their jobs return to their former company, but in 2023, that figure is set to increase. We spoke about the benefits of re-hiring corporate alumni earlier in the year (you can read that piece here). In a tight talent market, these ex-employees can hold incredible value. They come up to speed faster, hold institutional knowledge and understand the culture and values of the company. A widely cited study out of Cornell University found that, in one large healthcare organisation, boomerang employees outperformed new external hires overall, particularly in people-centred or administrative roles.

2023 will see organisations putting more effort and resources into the off-boarding process, maintaining their talent pool by staying in touch with employees who leave and sending them updates on the latest developments within the company, vacancies and other relevant information and ensuring they’re aware that the door is open should the ever wish to return.

The rise of internal mobility

Professionals are no longer thinking of career-growth in the traditional sense. They’ve stepped off the ladder and have begun exploring other parts of the organisation, signalling a stronger internal mobility trend.

Data shows that employees leave their employers for better development opportunities at similar rates as they leave for higher compensation. In 2023 employers will need to put more emphasis on developing their current workforce, offering regular trainings and certification programs to re-skill or up-skill internal candidates. Utilising predictive analytics to audit employees’ existing skillsets, shortlist promising internal candidates for difficult-to-fill roles, provide tailored career development content, and create personalised career pathways based on goals and interest areas will also be imperative.

Internal mobility is high-ROI: an average of 9X more effective than job boards in producing hires. It takes just 4 internal applications to result in 1 successful hire. These internal career pathways look different to each company: it could include lateral moves, upwards mobility, or cross-functional training and development.


Sustaining culture with a remote workforce

With a large majority of organisations successfully having adopted a hybrid work model, the issue that is now arising is how organisations can maintain, or even improve their culture, if so many people are working from home. Some organisations have turned to forcing everyone back in the office, despite what employees want or whether their roles require in-person interaction, but it is predicted that those organisations will likely see a dip in productivity – if not more employees handing in their resignations. 

A Korn Ferry survey showed that 79% of professionals said they will work fewer hours when they return to office than they currently do while working remotely. In another, 64% of respondents said going back to the office would impact their mental health negatively.

While hybrid workplaces have been predominantly great for employees, there is no doubt about the fact that they do affect culture. New hires make 17% fewer connections compared with pre-pandemic, according to a Vox report. In a hybrid workforce, people tend to communicate less with people outside of their departments and this can result in a decrease in collaboration, innovation and employees who feel isolated.

The good news is that a strong work culture in a hybrid workplace can exist, and there is a real opportunity for employers to evolve their approach to teamwork and collaboration in 2023.

Purpose and employee sentiment and wellbeing are they key to a strong company culture no matter the working arrangements. organisations need to look to instilling a strong sense of shared purpose across the board to unite people around a common goal. A shared purpose is a crucial unifier for employees and the very foundation from which the business builds and evolves its organisational culture. It is also inextricably linked with business performance. Research shows that having a strong purpose can contribute to the overall health and performance of a business, with purpose-oriented companies having 30% higher levels of innovation and 40% higher retention rates than companies that aren’t purpose-oriented (Deloitte).

Organisations need to review how they interact with employees and how they foster a culture in which people feel free to use their voices openly. As a starting point, companies need to have a solid understanding of how employees feel about their work lives. This can prove a challenging task when the workforce reaches far and wide, as is often the case in hybrid working models. But methods such as the Employee NPS Survey can play an important role in helping organisations gather and analyse data to understand employee sentiment.

Periodically surveying employees about their day-to-day workload and experiences, reactions to policy changes, new initiatives, or questions is a necessity to to help avert low employee morale and high attrition rates.

Work-life integration V Balance

Flexibility is a top priority for candidates in 2023, with 76% of professionals reporting they would prefer their workweeks to shift to non-traditional hours. Another reports that 88% of surveyed professionals said returning to the office will make home duties more difficult to handle.

Research indicates that 60% of jobseekers are looking for remote working options, while only 30% of advertised jobs are listed as remote roles. This provides an opportunity for hiring teams to bridge the gap, and realign their EVP with the current market.  In 2023, candidates will be foregoing the traditional 9-to-5 in favour of a more fluid schedule and looking for employers who offer work-life integration. Work-life integration involves blending both personal and professional responsibilities. Rather than viewing work and personal time as separate entities. Think working a few hours in the morning, taking an afternoon break for an appointment or to pick up the kids, then back to work in the evening.

Tailoring an employee’s work environment to their work style and personal circumstances can help create a productive, balanced work environment. It’s important to remember that there is no one-size-fits all approach as each individual works differently.

Doing more with less

We know we continue repeating ourselves here, but it’s not without need.  The need to do more, with less resources is one of the key challenges for hiring tea,ss.. Recruiter workloads increased 28% last year compared to pre-pandemic —with no signs of slowing down.

Business need to be leveraging technology to source better candidates, engage applicants, reduce time to fill, and improve candidate experience. Additionally, streamlining technology creates efficiencies and allows organisations to operate with leaner teams and do more with their budget. According to a LinkedIn survey, the average time to hire is 40 days, and according to SHRM 60% of candidates drop our do to a lengthy process. This is not only costly to you, but also results in a loss of productivity. It is important that your process is streamlined to offer the best candidate experience and to keep candidates engaged in your process. 

Pre-employee assessments are proven to cull out unqualified individuals early while providing your hiring manager with high-scoring candidates. Another helpful way to streamline processes is to automate scheduling. There’s no need for one round of phone interviews to schedule two more in-person interviews when everything can be done online in only a couple of minutes. By utilising assessments and video interviews, we were able to cut down Coles’ time to hire by 95%, saving them 20 business days. You can learn more about the case study here.

To navigate the 2023 talent market you need a strong and valid strategy. Every day, Testgrid works with various clients to help them optimise their recruitment and find the top talent. Get in touch to see how we can help, here!

View our recent Webinar: 2023-proof Your Recruitment Process or eBook : Future-proofing your Recruitment Process (or both), where we discuss what to prepare for in 2023.


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