If 2021 was seen as a year of change for the world of work, 2022 became known for its increasing economic uncertainty and tightening labour market. But what does the year ahead have in store for UK employers and employees when it comes to hiring and the workplace?
A new joint report by economists at Glassdoor and sister company Indeed uncovers the latest emerging labour market trends and insights into the workplace in 2023 and beyond.
The 2023 Hiring & Workplace Trends Report helps employers understand and plan for the labour market of tomorrow, and gives insight into what to expect for recruiting, hiring and retaining talent moving forward.
Key Workplace and Hiring Trends
Using data unique to Glassdoor and Indeed, the 2023 Hiring & Workplace Trends Report outlines five key labour market trends that will persist beyond the near-term fluctuations in the business cycle, and likely withstand even a potential global recession.
The five key trends include:
- Shrinking labour supply will keep workers in the driving seat.
- There’s no return from the pandemic pivot to remote and flexible work.
- Salaries will be front of mind for employees, but benefits will stand employers apart from the competition.
- Workplace happiness is critical to employee retention.
- Lip service is over when it comes to diversity and inclusion; younger employees want action from their companies.
Read on to find out more about each trend as explained by Glassdoor’s UK economist Lauren Thomas.
#1 Trend: Tight labour supply to continue
There is no sugarcoating reality: Finding and retaining top talent will remain difficult in 2023. The economic challenges as the UK looks to the coming year appear daunting. Energy and food price inflation show few signs of easing and, as a result, there will be diminished options for fiscal or monetary stimulus. But even as recession risks emerge on the immediate horizon, longer-term shifts in labour supply will mean that hiring is unlikely to fall as much as the deep recessions of the early 1980s and 1990s. As noted in Glassdoor testimony to the House of Lords, the ageing of the UK population is weighing down labour market activity rates – a trend that is unlikely to reverse for the foreseeable future.
#2 Trend: Remote work is here to stay
Not every job can be done remotely and there is an elevated focus on return-to-office in some sectors, but for many, the pandemic pivot to remote work, whether fully remote or as a part of a hybrid work schedule, will be an enduring feature of the UK workplace. We identified “hybrid” as Glassdoor’s 2021 Word of the Year, and at a moment when employees are in the driver’s seat, many employees’ preferences for remote work will ensure it’s here to stay. Recent Glassdoor research discovered that hybrid-discussing workers rated their workplace experience far more favourably and began fewer job applications than those who did not mention hybrid in their reviews.
#3 Trend: Compensation is still top-of-mind for workers, but benefits set employers apart
There are clear crosswinds when it comes to the timeless tradeoff between cash compensation and benefits. As workers struggle with the cost of living crisis, cash compensation is likely to be even more important. Some less-used benefits may be on the chopping block as employers looking to save money focus on what matters most for their teams. For instance, we recently charted how in-office benefits such as gyms and kitchens are being noted much less often in reviews for UK companies relative to pre-pandemic times. To distinguish themselves from sustained labour competition, employers are increasingly embracing transparency and investing in company culture to keep workers satisfied.
#4 Trend: Memories of the Great Resignation will be slow to fade
People leaders have been thrust to the frontline of executive teams over the past two years as companies grapple with the downstream disruptions of the Great Resignation. Even amid profound economic challenges, corporate leadership will find it necessary to retain a focus on employee retention and happiness. Glassdoor data show that more satisfied employees are far less likely to consider outside employment opportunities: in the UK, a 1-star increase in an employee’s Glassdoor rating is associated with a 19% decline in the likelihood that they begin a new job application on Glassdoor within the next week.
#5 Trend: Younger workers push progress on diversity, equity and inclusion
Corporate focus on diversity and inclusion (D&I) surged in 2020 and 2021 according to benefit reviews on Glassdoor, but these recent advances appear to have stalled in 2022. In 2021, half of UK benefit reviews indicated that their employer had a DE&I programme, up from about one-third in 2017 and 2018. In 2022, it slipped back slightly to 48%. A 2022 Glassdoor study of UK employees found diversity and inclusion policies are more important to younger workers than other age groups.
The year ahead looms, yet again, with enormous uncertainties and daunting economic challenges for the UK. But amid the fog of the future, it is possible to discern the contours of a handful of distinct trends. Even as the economic tides turn, one thing is clear: the strength of an organisation's employees and health of its company culture is directly associated with its business success
Looking Ahead to 2023
Talking about the trends for 2023 Glassdoor’s UK economist Lauren Thomas says: “The coming year will challenge companies to consider the long-term trends for hiring and look beyond the short-term distraction of a potential economic slowdown. Amid broader economic uncertainty, the ageing UK population will continue to drive labour demand in key economic sectors throughout the boom-and-bust cycle. Two concerns will remain top of mind for job seekers in 2023: compensation and benefits and diversity and inclusion. With decades-high inflation causing real wages to shrink, employers are finding creative ways to compensate their workers without blowing up their budgets. And as hiring slows, there will be a greater focus on retention and workplace happiness.”
Want more insights? Read the global report from the Glassdoor Economic Research and Indeed Hiring Lab teams which covers the US, Canada, France, Germany and more.