The 2023 Labour Market: What to keep an eye out for

With the World Economic Forum (WEF) session in Davos having concluded last week and most market predictions out for 2023, I wanted to begin the year by looking at what global experts are saying about the job market. In turn, I hoped to use this text to explore how world market predictions stack up against trends we are currently seeing in Brazil. So what can we expect of labour markets in 2023?

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Markets are still tight but employers may have more wiggle room

Since Covid arrived in our lives, big changes have occurred in labour markets around the world. Of course, each country and/or region faced different circumstances and needs based on how national governments handled their responses to the pandemic. But certain trends did come to define recruitment and hiring processes. For example, a number of industries and services were impacted so heavily that it is taking a longer time for them to make a full comeback. Look at the air travel and HoReCa sectors. Airports still struggle to deliver services at pre-Covid standards: even a year and a half after initial attempts to return to some degree of normal. Likewise, some businesses just didn’t survive the pressures of the pandemic: think boutique hotels, smaller retail shops, and a number of mom-and-pop businesses or early-phase start-ups. Now, the market is primarily impacted by worries about a potential recession. So while there are many industries facing shortages of qualified, skilled workers, a big number of them are reticent to do mass scouting for new hires since they just don’t know what the 2023-24 period will bring. With many companies in "wait and see" mode, this means that employees have lost a bit of their 2021-22 leverage. Global HR departments are not chomping at the bit so much as concerns massive hiring and new recruit onboarding. Per LinkedIn stats, hiring was down roughly 23% m/m in Brazil during December 2022.

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Upskilling and reskilling will be more important than ever

A lot of global policy challenges are driving efforts to bring new skills to the global labour market: with Brazil’s market also affected. Key issues that are defining growth sectors for new employment opportunities include climate change, cybersecurity and innovation to drive business growth. The number of roles that relate to those issues will continue to grow and it will be advisable for job hunters to seek new training and skilling opportunities in those areas: whether it be working to understand policies that curb businesses’ negative environmental impacts or learning protocols for boosting online security in business operations. Of course, not every job candidate will be able to rapidly acquire skills in these fields, but it would be wise for them to speak to recruiters and ask about how firms assess such skills and if interim upskilling or reskilling opportunities are available. It’s important to note that Brazil is one of the top markets for businesses looking for talent in the field of Sustainability (see LinkedIn’s Global Green Skills Report 2022 ), so this is an area candidates should keep an eye on in 2023.

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Employees will maintain quality of life priorities even if hiring slows

Looking at remarks made from various corporate leaders and also referencing sources like LinkedIn’s Global Talent Trends, statistics show that new recruits and potential job candidates still place strong emphasis on issues that arose during the Covid period. This includes work-life balance, flexible work arrangements and access to upskilling which I mentioned above. Additionally, candidates are also looking for greater equity in accessing new work opportunities and roles. They are mindful of, and also closely watching, how businesses address this issue; specifically, in the current environment of continued disruption: both for industry development and skills acquisition. WEF data shows that, by 2025, an "estimated 97 million new jobs will emerge and 85 million others will be displaced by a shift in the division of labour between humans and machines." This means that businesses in Brazil and around the world will need to pay attention to not only bringing newly-needed skills to market for candidates, but also ensuring that market disruption does not widen income disparity.

That’s a tall order for companies and their HR departments over the course of 2023.