As 2023 draws to a close, I find myself reflecting on the state of our job market and its implications for the future.
This year has indeed been a rollercoaster, with the slowing down of the job market as we have been consistently against a persistently high number of vacancies due to a workforce (mainly skill/talent) shortage. Data indicates a deceleration in wage growth, suggesting that the generous salaries of the year may taper off in the coming months.
It’s a pivotal moment that calls for us to enhance our skills, adopt smarter working strategies, and establish robust immigration policies to prevent a resurgence of inflation and a stalling of economic growth.
Our businesses are echoing a common sentiment: the need for governmental policies that prioritise workforce development and operational efficiency.
With nearly a million job openings, despite a record decline, the labour market is still stronger than it was before the pandemic, highlighting the enormity of the challenges ahead. Growth must now take centre stage. It is the only way forward to alleviate tax pressures and secure funding for our public services, underscoring the need for the economy to be at the forefront of governmental focus.
The latest data from the Recruitment & Employment Confederation (REC) and Lightcast’s Labour Market Tracker reveals that the country currently has over 1.4 million unfilled job openings. Despite an underperforming economy, the persistently high number of vacancies signals a continued demand for labour. This situation poses potential difficulties for numerous businesses, particularly during the holiday season, as they may encounter challenges in fully staffing their operations to optimize revenue. Additionally, the National Health Service (NHS) is entering a crucial phase this winter, with the pressing need to effectively manage its workforce in the face of extensive labour and skills shortages.
In 2023, the pace of the job market has slowed down, yet hiring activities remain strong relative to historical trends. Despite the sluggish economy this year, the reduction in hiring has not been as significant as in previous economic downturns, largely attributable to a limited labour supply and skill deficits. This issue is acutely felt in industries such as hospitality, engineering, healthcare, and social care. Presently, there are nearly 70,000 open roles in the health and care sectors, with the NHS gearing up for a challenging winter season.
The Christmas season is pivotal for many businesses, as the revenue generated during this time often supports them well into the following year. Although employers are increasingly confident about investing and hiring, this optimism has not yet resulted in a boost in sales.
This scenario highlights the dangers of political leaders neglecting economic growth as a priority. Inadequate staffing levels can strain the economy, leading to higher taxes, decreased public spending, and increased domestic inflation. For politicians to offer meaningful support to businesses in the coming year, they should concentrate on reforms in skill development, engage in a reasoned debate about immigration for employment and its impact on economic growth, and develop a comprehensive industrial strategy.
Recruitment and AI
As we wrap up this year’s final newsletter, I want to touch upon the evolving dynamics within recruitment and the burgeoning role of artificial intelligence (AI) in our industry. 2023 has been a year of profound learning and adaptation, especially as we integrate AI technologies into our recruitment processes. These advancements are not just about streamlining our operations; they’re about enriching the quality of matches between employers and potential employees and enhancing the candidate experience.
AI has opened doors to new methodologies for sourcing talent, allowing us to dive deeper into the candidate pool and surface prospects who might have previously been overlooked. It’s also provided tools for predictive analysis, helping us to anticipate market trends and prepare both candidates and businesses for the shifts ahead.
As we embrace these technologies, Citrus Connect Recruitment remains committed to the personal touch and professional intuition—qualities that AI is far from replicating. Looking ahead, we’re excited to harness the power of AI to bolster our capabilities, ensuring that we remain at the forefront of the recruitment industry.
A recent survey revealed that a significant majority (90%) of senior HR professionals from various organizations reported not incorporating artificial intelligence (AI) into their hiring processes. Moreover, within this group, a scant 3% plan to adopt AI within the upcoming year despite 92% being slow to adapt.
This information was gathered from 167 senior HR professionals across diverse organization sizes in both the private and public sectors. They participated in the REC/Savanta survey.
The timing of the survey, conducted in August 2023, was notable as it followed remarks by the UK Prime Minister at London Tech Week 2023. He highlighted the dynamic evolution of technology and expressed his ambition for the UK to become a global leader in AI technology.
Among the 8% of senior HR professionals who do utilize AI in their recruitment processes, as indicated by the survey:
- 54% employ AI to assist in the recruitment of candidates, including the use of AI for generating job advertisements and targeted advertising.
- 44% leverage AI to aid in the interview and selection phase, such as applying voice and facial recognition technologies during video interviews.
- 29% utilize AI for preliminary screening of candidates, which encompasses automated CV analysis and AI-driven psychometric evaluations.
- 27% use AI for the integration of new hires into the company, through automated HR onboarding systems.
- When asked about other uses of AI, 19% of respondents provided different answers, while 20% were uncertain or did not have an answer. (REC)
To remain competitive, employers must close the technological divide with candidates who are already leveraging artificial intelligence. Human Resources professionals must adopt AI to attract and retain top-tier talent effectively.
Artificial intelligence is poised to make HR tasks more efficient, from automating scheduling to crafting tailored training initiatives. The ultimate goal for any organization is to secure the ideal candidate, boost their performance, and foster long-term loyalty.
Human Resources departments can accelerate their AI adoption by engaging with external recruitment experts. Recruitment agencies are evolving by embedding AI into their offerings, providing cutting-edge experiences for both their staff and clientele, a development underscored in the recent report “Tech-Enabled Humanity.”
Thank you for being a part of our journey this year. Here’s to a future where innovation and human expertise combine to create a job market that is more efficient, inclusive, and forward-thinking.
Wishing you a wonderful Christmas and New Year, from myself and the entire team at Citrus Connect Recruitment.
Leena Parmar, Founder of Citrus Connect Recruitment