Top 5 hiring & workplace trends for 2023
UK employers face a shrinking labour force and will continue to wrestle with hiring challenges into 2023 and beyond, according to a new report released by sister companies Indeed and Glassdoor.
Their inaugural Hiring and Workplace Trends Report 2023 shows that the UK labour supply remains constrained, driven by a large and widening post-pandemic participation gap amid rising economic inactivity rates including long-term sickness. In the longer term, an ageing population means the size of the UK workforce will shrink.
The report, which tracks trends across Canada, USA, France, Germany, and the UK, shows that, without sustained immigration, an increase in labour productivity, or a focus on attracting new workers, many industrialised countries will see further constrictions in available labour.
The squeeze is likely to persist in the UK where job postings remain 42% above their pre-pandemic level despite a recent softening in demand for workers.
Elsewhere, the report highlights that as the cost of living crisis continues to bite, pay is the top consideration for jobseekers to keep pace with mounting bills. However, the desire for flexible work continues unabated and ranks highly as a top employee priority, notably for older workers who are considering re-entering the labour market to top up earnings.
The five key trends identified by Indeed UK economist Jack Kennedy and Glassdoor UK economist Lauren Thomas are:
#1 Hiring challenges set to persist
Hiring conditions will remain challenging in 2023 and beyond. The UK continues to experience a large and widening post-pandemic participation gap amid rising rates of long-term sickness. In the longer term, an ageing population means the size of the UK workforce will shrink.
#2 Remote work is here to stay
Jobs offering remote work in the UK rose by 274% since the start of the pandemic while searches for remote work grew by 674%. It’s clear that the pandemic-enforced shift to widespread remote, hybrid and flexible working will be a permanent feature of the labour market; this has widened the pool of available labour for employers and allowed opportunity to become more geographically dispersed. And employees with access to hybrid work are generally happier with their company.
#3 Pay matters most but benefits sweeten the deal
Compensation is the key consideration for jobseekers right now, understandably so in a cost of living crisis, but flexibility is very often a must-have for many people, especially those who face barriers to work such as caring responsibilities. Benefits are also a key tool in attracting and retaining workers and have adapted to people’s preferences: recent Glassdoor analysis showed how in-office benefits such as gyms and kitchens are being noted much less often in reviews for UK-based employees relative to pre-pandemic times.
#4 Happiness key to employee retention
Even amid profound economic challenges, corporate leadership will find it necessary to retain a focus on employee retention and happiness. Glassdoor data show that more satisfied employees are far less likely to consider outside employment opportunities: in the UK, a 1-star increase in an employee’s Glassdoor rating is associated with a 19% decline in the likelihood that they begin a new job application on Glassdoor within the next week.
#5 Younger workers push for diversity, equity and inclusion
Corporate focus on diversity and inclusion surged in 2020 and 2021 according to benefit reviews on Glassdoor, but these recent advances appear to have stalled in 2022. In 2021, half of UK benefit reviews indicated that their employer had a diversity, equity & inclusion programme, up from about one-third in 2017 and 2018. In 2022, it slipped back slightly to 48%. A 2022 Glassdoor study of UK employees found diversity and inclusion policies are more important to younger workers than other age groups.
Jack Kennedy, UK economist at the global hiring platform Indeed, said: “Covid meant everybody changed the way they work and now that temporary trends have settled into permanent ones, we can see what a post-pandemic world of work looks like. The scale and speed of change has been dramatic and while the UK labour market has adapted and shown signs of resilience, the pandemic exposed underlying frailties that look set to hamper hiring in the near future. The key question for jobseekers and employers will be for how long the jobs market can seemingly defy economic gravity and keep chugging along and what levers they have at their disposal to ease challenges.”
Lauren Thomas, UK economist at Glassdoor, said: “The coming year will challenge companies to consider the long-term trends for hiring and look beyond the short-term distraction of a potential economic slowdown. Amid broader economic uncertainty, the ageing UK population will continue to drive labour demand in key economic sectors throughout the boom-and-bust cycle. Two concerns will remain top of mind for job seekers in 2023: compensation and benefits and diversity and inclusion. With decades-high inflation causing real wages to shrink, employers are finding creative ways to compensate their workers without blowing up their budgets. And as hiring slows, there will be a greater focus on retention and workplace happiness.”
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