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2023 was a difficult year for recruiters. Many industries were plagued by talent shortages as businesses scrambled to secure skilled workers. Compounding this was the state of the economy, as fears of recession hung heavy. The new year is expected to bring challenges of its own, and leaders need to be prepared.
“After a year defined by economic pressures, the world of recruitment is expected to face significant challenges in 2024. According to the Australian federal government’s Annual Jobs and Skills Report, next year will bring low unemployment rates, a persistent skills shortage, and economic pressures that have not been witnessed since the 1960s,” commented Jas Singh, founder and managing director of SKL Executive.
“The ultimate challenge across the recruitment industry will be adapting to the changing landscape and increased economic pressures felt by businesses all over the world.”
There are a variety of challenges that Mr Singh is referring to. Here are his picks for the top four set to shake up the world of recruitment in the coming year:
1. The impact of economic pressures
“The economic pressures currently felt all over the world will play a significant role in the recruitment landscape throughout next year. Rising interest rates, inflation, and global conflicts all put enormous strain on businesses and their bottom lines, often leading to hiring freezes or, in worst-case scenarios, staff layoffs,” said Mr Singh.
“The actuarial and tech industries are set to experience some of the most prevalent recruitment challenges in 2024. Earlier this year, we saw several of the biggest names in the tech world – Google, Zoom, Meta, and Amazon, to name just a few – announce mass redundancies, and this could carry on to 2024. Actuarial firms are following suit by also adopting a cautious economic outlook. With the industry flooded with talent and fewer vacant positions available, recruiters will likely find that the hiring process becomes far more competitive.”
2. The continued skills shortage
Mr Singh continued: “The skills shortage as we know it will evolve in 2024, continuing to be a persistent challenge for recruiters. While immigration has provided relief in certain industries, such as construction, others, like actuarial and tech, are still grappling with shortages. The actuarial sector, in particular, continues to demand top-tier talent, but the market has stabilised compared to the post-lockdown boom of the previous year.”
“For those industries most affected by skills shortages, transferable skills and assessment-based hiring may be a worthwhile solution. According to a recent white paper by WorkPro, 62.4 per cent of people are open to job offers in new industries if their skills are transferable. Common skills such as team management, conflict resolution, leadership experience, and critical thinking are valued across a multitude of industries, leaving the door open for these workers to fill the gap. For those businesses that are feeling the brunt of the skills shortage, this change in recruitment strategy could be the solution to hiring dynamic talent.”
3. Salaries will remain steady
“Despite the rising cost of living, salaries are expected to remain steady in 2024 thanks to the increasingly competitive job market. A surplus of talent combined with a reduction in available roles means businesses will have no shortage of applicants for vacant positions, so increased spend on wages won’t be high on the priority list,” explained Mr Singh.
“Adding to this is the fact that businesses of all sizes and across all industries are watching their spending closely due to the broader economic climate. High inflation, interest rate hikes, and economic uncertainty are all part of the foreseeable future, with businesses understanding that now is not the time to be spending unless necessary. While it may not be good news for employees, this does mean that salaries will likely remain stagnant throughout 2024.”
4. Less need for outside help
“Much like the hesitancy to increase salaries in times of economic uncertainty, businesses will also be cutting back on any unnecessary spending. This phase of heightened caution may mean that businesses are less willing to spend money on recruitment agencies, preferring to take their hiring process in-house,” he said.
Mr Singh concluded: “To prevent the fallout that could come from this, recruitment agencies must go beyond conventional practices and illustrate the value they add to the hiring process. This involves not only identifying and presenting suitable candidates but also providing a comprehensive understanding of the long-term benefits associated with securing top-tier talent. By articulating how the right hires contribute to enhanced productivity, innovation, and overall company success, recruiters can position themselves as strategic partners rather than mere service providers.”
As we prepare for a changing recruitment landscape in 2024, recruiters must stay ahead of the trends to continue offering the very best outcomes. To do this, we must adapt to the changing economic climate by addressing cost concerns and fostering a deep understanding of the evolving skills landscape. For job seekers, developing a diverse skill set, staying informed about industry trends, and leveraging networking opportunities will be paramount in securing opportunities in this dynamic and competitive job market.
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The practice of actively seeking, locating, and employing people for a certain position or career in a corporation is known as recruitment.
Jack Campbell
Jack is the editor at HR Leader.
