Top 8 predictions for 2022 - welcome to the high velocity labour market

At the end of each year at FlexCareers virtual HQ, we do our best to read the tea leaves and anticipate how the labour market might evolve in the year ahead.

I thought 2020 would be all about new, more flexible ways of working to enable a more ‘human’ career experience for those with families or at different life stages, but COVID had other ideas (who knew!!). Then in 2021 my predications were pretty close, seeing an increase in labour demand from employers looking to grow out of the pandemic.

This year just gone has seen the most lopsided, and in some instances, dysfunctional labour markets we’ve ever seen. Big employers, in particular, have been desperate to hire, pressured by shareholders to grow their way out of the COVID-induced slump, and by changed customer buying preferences which has accelerated every organisation's digital transformation.

And while the twin pressures from shareholders and customers are not going away any time soon, the difference maker for the Australian labour market is the rollout of the vaccine we’ve seen in Q4 (finally!!!), clearing the way for a very different labour market in 2022.

Here are my top 8 predictions for the labour market of next year – the year we learn to live with COVID.

Labour shortages.

Labour shortages at a macro level, and skills shortages in particular job families, will be the number one risk to business in 2022.

We’ll be starting the new year with unemployment below 5%. Since the end of lockdown 1.0, we’ve soaked up any slack that had existed in the candidate market. Whether you’re looking for workers in technology, infrastructure or hospitality, they’re proving harder to secure. Combined with net outflows in migration of 300k foreign workers and stubbornly shut borders, everyone is scrambling to find more people.

Conjecture lies in the effect of the border re-openings, whenever that happens – and how quickly it has an impact. I expect migrants to return, but I also expect many Australians to be travelling to London, New York and other favoured destinations of generations before them. The net effect on skilled labour supply is the number to watch.

The Great Talent Migration.

Albeit delayed by 3-6 months as compared to the US and European markets, I predict huge volumes of people interviewing for new roles once the jobs market reopens after Australia Day, with many of those candidates switching roles from March. While we’ve all had the opportunity to switch through 2021, we might not have had the confidence to take the risk and move jobs due to the lasting and unpredictable impacts of COVID on the economy. What’s changed now is that the vaccine rollout has finally arrived.

This great migration of talent should be seen both as a threat and an opportunity: those businesses that get their employer brand right, sharpen their EVP and remove frictions from their applicant experience can use the mass switching event to set themselves up for success for years to come.

Massive hiring demand to remain – or even grow.

After a year of hiring freezes in 2020, 2021 has seen the market look to an increased workforce as one way to grow its way out of the COVID slump. And with share markets at or near all-time highs, the pressure coming from shareholders to continue to grow profits and improve customer digital experiences will remain.

FlexCareers’ numbers show the labour market in 2021 running at around double its normal velocity. I see a compelling argument that the market will remain at these elevated levels, if not increase its demand for hiring.

The arms race for employer branding.

There are two factors driving this:

·???????First, an employer brand is no more than ‘the promise of what you will experience when you join us’. Contained within that, there’s always going to be a balance between the aspirational vision and the reality of the lived experience. When the living, breathing reality of an employee’s experience deviates too far from what is promised, the brand needs to play catch up.

·???????And second, in a white hot labour market, with more roles than candidates, employers need to do everything they can to stand out in a crowded market. What makes you special to a candidate now, when that candidate is already holding 2-3 other job offers on top of yours?

The way we work has changed. And the desperation of employers to hire has too. Our employer brands, as well as our EVPs, need to catch up.

As we head into 2022, we expect to see a massive investment into employer branding as employers look to articulate ‘what makes us different’.

L&D becomes the sexiest job title of the mid 2020’s.

After being distracted by the noise around COVID, 2022 will be the year that bottom-up strategic workforce planning collides with top-down market analysis for the skills of the labour force. As all businesses become tech businesses, we’re about to get a rude shock that there are simply not enough data scientists, cloud specialists or cyber security nuts for future requirements.

If there are three ways to get human skills into any business with the borrow / buy / build trilogy, then the first is prohibitively expensive and the second is limited. In 2022, we’ll see workforce reskilling as the only sustainable and scalable way to ensure our businesses have the necessary skills to enable a digital future.

We’ll be making an almighty investment into L&D and we’ll come to see L&D as the sexiest job title of the mid 2020’s.

Sorry, data scientists.

The year of learning to do hybrid properly.

The start of this year just gone saw many employers do the work to define their future of work. Often the result looked like “2 and 3” (days at home / days in the office) with some gradual rollout over the year, “until we reach our new normal”.

Then Delta happened.

With Sydney in lockdown 2.0 and Melbourne having lost count, those plans were shelved – being first back to the office is not a race many want to win.

2022 will be the year we learn to live with COVID in a sustainable way. We’ll be investing in the capabilities of our leaders to lead in a hybrid way. We’ll be working with our teams more to enable them to self-organise in a way that ‘works’ for the team, the business and its customers. We’ll double down on wellness. And we’ll acknowledge that hybrid work takes time to get right – it’s not as simple as ‘2-and-3’.

Tapping the untapped labour pools – rise of Return To Work

With the ongoing talent shortages, we’ll start to ask the question “where ELSE can we find people?”

Enter the return to work parents.

With over 300,000 babies being born every year, there is a deep and meaningful supply of labour looking to return to the jobs market each year. While they might require a slightly different level of support post-hire, employers willing to invest in career returners will be rewarded with rich experience, skills and loyalty.

We are already seeing a significant number of large employers line up programs that look similar to graduate intakes for this cohort of staff, and expect to see more into 2022.

Candidate regret & the boomerang employee.

The great talent migration is going to be a real thing. For the last 18 months, we’ve had very little control in our lives – and from the individual’s point of view, deciding who we work for is one of the few decisions we’ve got full agency over.

But many of us will realise that the grass isn’t greener elsewhere – we might end up regretting our decision to leave and long for the good old days.

Smart employers will be leaving space for the boomerang employees to return. They will invest in the exit experience – whether that is to get the person to stay, or to leave a positive, lasting experience – as well as their alumni programs. Labour shortages are not going away any time soon. In 2022, the best employers will give their leavers a good reason to return.

As the lopsided labour market gives way to the great talent migration of next year, I urge you to see it as an opportunity to position your business as a differentiated and progressive career destination of choice.

We know the best will go to the best, so do everything you can to give candidates a really good reason to join, and give your incumbents a really good reason to stay.

Your shareholders and your customers will thank you for it.

If we can help with positioning your brand in market at FlexCareers, please connect with me. I'm looking forward to listening.