The Labor Markets Continue to Evolve: What to Expect in 2023

We recently completed the 2022 year and are now well into 2023. This pivot from one year to the next is frequently anxiety-inducing for managers. The scoreboard rolls over and we start anew. Surprises almost always seem to emerge, some very positive, others not so much. As our team reflected on this particular pivot, we identified the following trends and suggestions for managers.

• Strong client demand – we saw extremely strong demand for accomplished finance and accounting professionals throughout 2022. Heightened demand cut across our client portfolio and applied to family-owned, middle market companies, private equity owned companies, and large public global companies. Demand existed across the client organization chart and included CFOs, controllers, analysts, auditors and accountants. We also saw clients with a significant need for interim resources to assist with high-urgency tactical projects. In many cases these required review and remediation of many transactions in a compressed time period. Our pipeline as we enter the new year is also very robust.
• Unpredictable candidate behavior – our staff meetings throughout 2022 were highlighted by remarkable stories of professionals backing out of accepted offers, insisting on remote job arrangements late in the search process, and, in a couple of cases, simply not showing up for positions they had accepted. This caused predictable frustration with our team and clients. We see no indication that this behavior will decline. If anything, we are anticipating an increase in conflict between candidates, who have become accustomed to a very flexible work schedule, and employers, who are looking to increase on-site work arrangements.
• Evolving client requirements – on several occasions, clients modified elements of their job description and/or HR policies. This included everything from vaccine status to expected days on site to base compensation. In some cases, hiring managers were caught unaware of a policy change and only learned of a new or changed requirement late in the process. In other cases, these changes reflected evolving thinking on the part of management teams regarding how and where work will be performed. We expect this tension in the system to increase in 2023 as management teams further evaluate their requirements. Candidates should expect that changes may occur.
• Continued tight supply – all of this suggests that the supply side of the hiring process will continue to be tight. Labor force participation metrics continue to be subdued. Baby boomers are exiting the market. A portion of the labor market has no interest in returning to in office work. Yet an increasing portion of the hiring community is expressing a desire for greater in office participation (see GM, Disney, Tesla etc.). Should economic conditions deteriorate, we expect this to accelerate. Given this we expect an ongoing tight labor market.

What should hiring managers do?

Create as much certainty in the hiring process as possible. Evolving/changing requirements and policies extend hiring processes and cause confusion. The old cliché of “time kills all deals” still applies.

Also, know the non-negotiables and the negotiables. Not all requirements are created equal, know where you have some flexibility and leverage accordingly.

Finally, communication is everything in employment negotiations. Managers should be as transparent as possible on all elements of an open position.

What should job seekers do?

Realize that companies are not in a fixed position on several of their policies at this point. Company policies may be and likely will be evolving. Candidly explore the status of a prospective employer’s thinking during the interview process. Assess where change is possible.

Also, know your own personal non-negotiables. What is really important to you? What is just a nice to have?

Finally, for those job seekers who have significant flexibility, recognize that this alone may give you an advantage. We recommend that you highlight that flexibility early and often.      

Trends from 2022 will carry over to 2023

In 2022, we experienced a remarkable labor market. Demand was robust. Supply was tight. Candidate behavior was unpredictable. Employer requirements evolved quickly and unexpectedly. Much of this will continue in 2023.

We feel fortunate every day to help both our clients and candidates navigate this terrain. We see the opportunity to assist a client with a key hire as an opportunity to change the trajectory of that company in a fundamental way. We see the opportunity to place a professional in a new role as life changing for that individual. What could possibly be more impactful?

This article was written as a blog post by Mark Bealin, Managing Director, UHY Resource Solutions. You can view open positions and stay in touch with the team by following their LinkedIn page.