DISHER Talent Solutions is a team of skilled talent acquisition professionals that help companies succeed in their hiring efforts. We stay informed on the labor market and one way we partner with companies and candidates is reporting our findings. Below is a summary and some recommendations for recruiting in this candidate-driven market.
Based on the data gathered, the candidate-driven market will continue in 2023. This is supported by the following information:
- A low unemployment rate of 4.3% coming out of 2022 (BLS), with the National unemployment rate currently at 3.5%.
- A persistent skills gap in candidates who are not qualified to fill technical positions (Lightcast: The Demographic Drought; Bridging the Gap in our Labor Force)
- A low number of overall layoffs despite headlines of the tech industry (SHRM)
- Average wage growth remains high for highly skilled positions – It is estimated to be 6% (Federal Reserve Bank of Atlanta)
- Lower labor force participation since Covid-19 – It is predicted to decrease an additional 2.8% through 2028 (Michigan Labor Market Information; LFProj)
DISHER Talent Solutions partners with a variety of companies to fill technical roles in the region and across the country. In 2022, our team saw hiring needs continue to grow as the number of open opportunities grew by 8.07% from 471 opportunities in 2021 to 509 opportunities in 2022. Within these open roles, there were trends for the most in-demand engineering talent our customers asked us to find, see below. Looking at 2023, we’ve included the State of Michigan’s occupation employment projections for growth for these sought-after roles.
As we look at the first half of the year, we see that the widening skills gap combined with lower labor force participation will lead to increased competition for top talent. Unemployment is projected to stay relatively low at 4.7% (UM Research Seminar in Quantitative Economics), creating a tighter pool of candidates. We continue to see an increasing number of open roles. To counteract this gap, companies will need to adapt.
Employers will need to find ways to stand out to the smaller pool of candidates to attract quality applicants. Remote and hybrid work is expected to continue to be a key motivator for candidates as they consider opportunities. According to a recent study, 34% of candidates prefer fully remote work, and 60% prefer a hybrid work schedule (Gallup Panel, Hybrid Work Indicators). While there are other impactful ways to attract candidates, this will play an important part in hiring in 2023.
Recruiters will need to rely even more heavily on building relationships with passive candidates. Up to 70% of the global workforce is made up of passive talent who aren’t actively job searching (LinkedIn; Hiring Stats). It can take anywhere from five to seven or more different touchpoints to convert a passive candidate to an active candidate. (Lever; 2022 Benchmarks Report) Employers will need to proactively forecast hiring needs to provide enough time to nurture relationships with passive candidates.
The proliferation of technology, innovation, and automation in Michigan is the main driving factor behind the growth rates for these roles. By developing a skills-based/experience approach to job requirements, employers can provide more transparency to candidates. Employers can focus on how a candidate’s experience aligns with the role and their future within the organization rather than the traditional degree plus experience approach.
In summary, the low unemployment rate, increasing skills gap, and low labor force participation will continue to challenge hiring efforts in 2023. Increased need for technical talent, (particularly Manufacturing, Quality, and Software Engineers), will drive the need to change how companies attract candidates. Employers will need to be mindful of hybrid/remote options. Developing campaigns and contact plans to reach passive candidates is imperative for reaching top talent in this market. Adjusting how job descriptions qualify or disqualify candidates will help shift hiring for technical roles.
If your company could benefit from more targeted data for your hiring strategy, or if you need some help recruiting technical talent—we would love to support you. We have an ever-growing database and a team of skilled recruiters/consultants who are ready to help you stay ahead of the hiring curve and achieve your talent acquisition objectives in 2023.