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Top 7 UK Recruitment Trends for 2023

Contractor Management
CXC Global7 min read
CXC GlobalJuly 27, 2023
CXC Global

2022 was a tumultuous year for the recruiting industry. And the cost-of-living crisis, soaring inflation, the ongoing pandemic and the tail end of the Great Resignation all continue to have an impact in 2023. 

As we enter the third quarter of this year, we wanted to share some of the top trends that have shaped the recruitment industry in 2023 so far — and that will continue to grow in importance throughout the rest of the year. 

Here are our top 7 recruitment industry trends for 2023. 

Businesses are still hiring despite economic uncertainty

While the UK has so far avoided a recession in 2023, the economy is far from stable. As of the end of June, inflation is at 7.9% — well above the Bank of England’s 2% target. The cost of living crisis that began late last year is still ongoing, with many households having to dip into their savings as inflation eats into their income. 

Despite this, the labour market remains relatively strong: employment is up on both the quarter and the year, and vacancies are now above pre-pandemic levels

Of course, unemployment figures only include people who are looking for a job. Since the pandemic, we’ve also seen a rise in people who are economically inactive due to long-term illness, and in older people leaving the workforce early

All of this means one thing: there are a lot of vacant jobs, and only so many qualified candidates to fill them.  

Given the labour shortage, it’s no surprise that many businesses are continuing to recruit in 2023, despite the shaky economic circumstances. According to the Totaljobs Hiring Trends Index, 81% of businesses recruited in Q2, and 34% of those increased recruitment compared to the previous quarter. Twenty-six percent of businesses plan to increase recruitment in Q3. 

Employer branding is a key priority, even with reduced recruiting budgets

With fewer people on the job market, recruiters need to work harder to sell jobs to candidates. For many hiring organisations, that means increasing their focus on employer branding and building a solid employer value proposition (EVP).

And even with many recruiting teams working with fewer resources, employer branding remains a priority. According to LinkedIn data, 55% of in-house recruiters say their recruiting budget will decrease or remain the same this year. But 59% say their spending on employer branding will increase. 

In 2023, recruiters need to keep a close eye on what candidates want and adjust their offerings to make sure they’re in line with their expectations. 

Flexibility is still key, but it’s become the baseline 

According to a LinkedIn survey from March this year, employees in the UK rank flexibility as their second priority when choosing a job. — only compensation and benefits is more important. This is a value that has stayed consistent over the past two years, despite the turbulent economic climate. 

In fact, it’s such a large issue in the UK that the government is proposing a bill to make it easier for employees to make flexible working requests. Under the proposed new rules, employees will be able to make requests for flexibility in their working hours, times and location from day one of their employment. Employers will also have to consult with employees before refusing such a request, and will have a reduced deadline for providing employees with a response. 

The point is, flexibility is no longer a perk — it’s a baseline that employees expect. That means that offering benefits related to flexibility probably won’t make an organisation stand out from the crowd. But candidates will notice when companies don’t provide them. 

In 2023, recruiters and hiring companies need to show candidates that they can provide the flexibility and work-life balance that they’ve come to expect — while winning them over with other aspects of their EVP.  

Skills-based recruiting is gaining momentum

With skills gaps still impacting many industries in the UK, recruiters are now looking in different places to find the candidates they need. In many cases, that means focusing on the actual skills candidates have, without getting distracted by things like big-name universities or former employers.  

According to LinkedIn, 79% of in-house recruiters believe that skills-first hiring will be a priority for their organisations over the next 18 months. And recruiters are now 25% more likely to search for candidates by skills than they were three years ago, and 50% more likely to search by skills than by years of experience. In fact, this trend is so important that Gartner included “pursuing non-traditional candidates” in their list of 9 Future of Work Trends For 2023.

So, what does this look like in practice? One idea is to remove the requirement for a degree for jobs that don’t necessarily require one. This can help recruiters to find talent that might otherwise be overlooked. It can also help organisations to diversify their workforces by including people from different backgrounds. 

Another thing that organisations can do is work with recruiters to carefully map the skills they already have in-house. They can then base their recruitment efforts on the gaps they find rather than focusing on job titles alone. This can also help companies to ensure their learning and development (L&D) programmes are as targeted and useful as possible. 

Generative AI will give recruiters more time for the human part of their roles 

If there’s one buzz phrase that’s been making waves in recruitment this year, it’s generative AI.  LinkedIn announced in March that it was slowly rolling out AI-generated job description capabilities for job posters, with plans to go global later this year. And there are many other ways that recruiters are using AI to make their jobs easier, from deploying AI chatbots to interact with candidates to screening applications with AI-enabled ATS software

At this point, it’s important to address the elephant in the room: are recruiters about to be replaced by robots? In short, no. But generative AI tools will play an important role in shaping the recruiting industry over the next few years. 

These tools allow recruiters to automate repetitive, administrative tasks, so they have time to focus on the parts of their role that require a human touch. That means that recruiters who embrace AI will have more time to properly get to know candidates and understand their needs, and work with hiring managers to develop proactive recruiting strategies. 

The rising importance of internal mobility will see recruiters working closely with L&D

Another way that businesses are looking to combat the talent shortage is by looking inside the organisation for their next big hire. 

And there are some big benefits to hiring internally. According to LinkedIn’s 2023 Workforce Learning Report, employees at the two-year mark are 33% more likely to stay at the organisation if they have made an internal move. Giving employees the opportunity to advance within an organisation can also help to improve engagement and morale, boost your employer brand and reduce time-to-hire and cost-per-hire. 

All of this means that in-house recruiters will likely find themselves focusing a lot more on internal hires throughout the rest of 2023 and beyond. They’ll also develop closer relationships with the organisation’s L&D team, as they work together to uncover missing skills and deliver the right training to develop them in-house. 

Businesses are increasingly turning to alternative talent 

As we’ve seen, this year has so far been characterised by ongoing skills shortages, rising labour costs and an uncertain economic situation. And businesses need to be able to quickly react to market changes, and easily flex their workforce up and down according to their changing needs. 

And for many, that means opening their doors to non-traditional workers, including contractors, freelancers, temp workers and SOW consultants. 

Hiring a contractor is often a shorter process than onboarding a permanent employee, which means these businesses can get faster access to the skills they need. They can also often access hard-to-find skills that are often simply not available on the traditional recruitment market. 

An MBO Partners report from August 2022 found that 77% of organisations expected their use of contingent labour to increase substantially over the next five years. And recruiters are increasingly working with their organisations to prepare for this projected growth, by optimising their strategies for sourcing, engaging, retaining and managing contingent workers. 

One solution to source, engage and manage your contingent workforce 

According to Deloitte’s 2023 Global Human Capital Trends survey, 84% of business leaders recognize the importance of leading an expanding workforce, including contingent workers. But the same survey revealed that only 16% believe their organisation is ‘very ready’ to do so. 

Building, developing and managing a contingent workforce involves a lot of different factors. You’ll need to source proven contingent talent, of course. But you’ll also need to make sure you’re engaging workers compliantly and find the right management strategies to boost retention and engagement. The best companies also have processes in place to promote redeployment as contracts come to an end, significantly reducing their workforce spending. 

If you’ve never built and managed a contingent workforce before, this might all sound a bit intimidating. So why not work with an expert partner?  

At CXC, we’ve been helping organisations to source, engage, manage and pay workers for over 30 years. We can help your organisation to jump compliance hurdles with confidence, reduce your workforce spending, and put in place a centralised, effective programme that works for everyone. 

Want to learn more about our solutions? Speak to our team today to get started. 

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About CXC

At CXC, we want to help you grow your business with flexible, contingent talent. But we also understand that managing a contingent workforce can be complicated, costly and time-consuming. Through our MSP solution, we can help you to fulfil all of your contingent hiring needs, including temp employees, independent contractors and SOW workers. And if your needs change? No problem. Our flexible solution is designed to scale up and down to match our clients’ requirements.

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