Big Ideas for Hiring and Retaining Talent in 2023

People strategies will be under the microscope in 2023, as organizations prepare for the likelihood of a mild economic recession.?

Talent leaders are feeling pressure to pull back on hiring and improve retention to reduce costs. Meanwhile, the skills shortage that has plagued many companies hasn’t abated. In fact, 68% of global leaders believe skills gaps will widen during an economic downturn, according to a recent survey from YouGov commissioned by LinkedIn.*?

Navigating a constantly changing labor market in the midst of this macro uncertainty means that hiring and development strategies will need to be highly adaptable. What does that look like?

We’ve surfaced three big ideas that will help organizations get through the challenges of 2023 in a stronger position, based on conversations with customers at our Talent Connect summit and recent research:

Company cultures that encourage career flexibility and mobility will improve retention.?

Companies are turning their focus inward. Our YouGov research found that improving employee retention and supporting career development are among global leaders’ top five business priorities over the next six months; in the U.S., they are among the top three priorities.

Employees want to have the flexibility to explore different roles and acquire new skills. And career pathing needs to reflect the reality that employees’ interests and ambitions are constantly changing. Not everyone follows a traditional, or even linear, career progression.?

Helping employees transform their careers as their interests shift – instead of keeping people in rigid pathways – will make it easier to keep great talent. Research shows the positive impact of helping people explore new roles: Employees who have moved around internally (whether through a promotion or lateral role change) have a 64% chance of staying with the organization after three years; the percentage lowers to 45% for those who haven’t moved. Providing flexible career pathing creates a workforce that is more adaptable to the changing external environment as well.

Upskilling will give organizations the agility to respond to changing market conditions faster.??

Finding people with the right skills to fill open positions is an ongoing struggle – and a market downturn will likely complicate matters further. Seventy percent of global leaders say it’s a challenging environment to attract top talent right now, according to our YouGov research. That’s why upskilling and reskilling programs are critical investments. Building the skills you need from within is often the best long-term solution – from a cost, efficiency, and retention standpoint.??

To tackle this challenge, talent acquisition and learning and development teams will need to improve collaboration around skills. In order to direct learning appropriately, there must be clarity around the skills that exist across the organization and the skills needed to drive growth.?

Understanding what motivates employees to upskill can help you direct investments more strategically. Linda Jingfang Cai, global head of learning and talent development at LinkedIn, suggests creating employee personas for different motivations – for instance, identifying “growth seekers” who are most eager for skills advancement and promotion.?

Leveraging technology to tailor learning to specific career goals or learning styles can boost engagement with upskilling initiatives.??

Organizations will redefine what constitutes a “quality” candidate.?

Every open position will be subject to extra scrutiny in the coming year.

For those roles that can’t be filled internally, there will be heightened pressure to bring the highest quality candidate in the door – and that will force a re-examination of how to define “quality.”

Hirers have historically used degrees, experience at prominent companies, and professional networks as primary filters to find top-tier candidates. Labor-shortage struggles in recent years forced companies to widen their aperture, putting more emphasis on the skills needed to do the job. Some companies are now fully embracing a skills-first mindset, hiring generalists over specialists to have more flexibility in terms of what projects those employees work on.?

Those who focus on the big picture when making hiring decisions will emerge from this challenging period as winners. They’ll take the long view, asking questions like: Are we hiring people with the right skills to support key growth areas? How do candidates’ preferences – around issues such as flexible-work arrangements – align with what we can offer? Does the type of culture they’re seeking match up with ours? Taking all of these factors into consideration is extra work, but it has a big influence on how long people stick around.

No matter what 2023 brings, taking steps to make hiring and learning strategies more agile and adaptable will set you up for long-term success.

What are your Big Ideas for 2023? Join the conversation! #BigIdeas2023

*LinkedIn commissioned YouGov to survey 2,929 C-level executives across the globe (United States, United Kingdom, Ireland, France, Germany, Netherlands, Italy, Spain, Sweden, United Arab Emirates, Brazil, Mexico, India, Singapore, Australia, China and Japan) from organizations with 1,000+ employees and annual turnover of ￡250+ million during 27 September to 19 October 2022. The survey was conducted online.