During the first half of 2023, the labor market slowed down, and employee engagement and happiness dropped, according to an Aug. 21 report from Workday.
On the platform, job requisitions dropped, more applications came in for fewer jobs and voluntary turnover declined by 20% as compared to the same time last year.
“The bottom line? For businesses to meet their goals, they must recruit the right people with the right skills for their finite number of new hires, while focusing on bringing out the best in their existing talent,” Inna Landman, senior vice president of talent acquisition for people experience and insights at Workday, wrote in the report.
Overall, there was a 15% decrease in job requisitions during the first half of the year, as compared to the same time in 2022. Looking at the first two quarters separately, the 20% slowdown during the second quarter was more pronounced than the 10% decrease observed during the first quarter.
At the same time, there was a 30% increase in job applications yet a decrease in the number of interviews scheduled, which could provide another indicator that companies are being selective during the hiring process, Landman noted.
In addition, workers appear to be staying in place at their jobs. Across all industries, the median 12-month voluntary turnover rate has declined by 20% year-over-year.
For some employees, that could mean fewer opportunities to advance. The 12-month promotion rate declined year-over-year in 13 of 16 industries measured. The technology sector had the greatest decline, with median 12-month promotion rates declining year-over-year.
Employee engagement and satisfaction indicators also appear to be trending downward. Across regions, Workday data shows that measures associated with health and wellbeing (such as workload) and employee progression (such as growth, reward and recognition) are among the lowest-ranking drivers this year.
“We are firmly entrenched in a market where employers are focused on the highest-quality hires possible, and recruiters will be managing significant candidate volume for far fewer roles,” Landman said.
Time-to-hire rates have also increased to an all-time high across industries during the first half of this year. Companies may need to tap into currently available critical talent pools to reach candidates, according to a recent Josh Bersin Co. report.
For talent acquisition pros, this could be a good time to build talent pipelines and prepare for a rebound. Improving tech stacks to find candidates, track applications and boost recruitment marketing could help.
