September 13, 2023 – Employers anticipate closing out 2023 with a calculated approach to hiring, according to the latest ManpowerGroup Employment Outlook Survey of nearly 39,000 employers in 41 countries. The net employment outlook for Q4 is +30 percent, up one percent from Q4 2022, and a two percent increase from last quarter. “The data for Q4 reveals employers continue to plan measured hiring despite economic uncertainties,” said Jonas Prising, chairman and CEO. “Globally, employers are beginning to moderate their hiring post-pandemic with many focused-on recruiting and retaining the business-critical skills they need to drive growth. Those who emphasize upskilling, reskilling, flexibility, and culture will be most competitive in still-tight labor markets. As transformation accelerates, from generative AI to the green transition, investing in people remains key for companies to build resilience and agility moving forward.”
With stable outlooks across the regions, employers in North America (+35 percent) reported the strongest hiring intentions, followed by the Asia-Pacific (+32 percent), South and Central Americas (+31 percent), and Europe, Middle East, and Africa (+25 percent). Hiring expectations remained the lowest, although steady, in the EMEA region (+25 percent), increasing + three percent since last quarter and + five percent since Q4 2022. Outlooks varied across the region with employers most keen to hire in the Switzerland (+38 percent), The Netherlands (+35 percent), Portugal (+35 percent), and South Africa (+35 percent). The weakest outlooks were in the Czech Republic (+11 percent), Hungary (+13 percent), and Slovakia (15 percent).
Countries across North, Central and South America reported positive employment outlooks for Q4, improving in eight countries quarter-over-quarter and five compared to this time last year. Employers across Puerto Rico (+36 percent), the U.S. (+36 percent), report + one percent increases in their outlooks compared to last quarter and the same time last year, + four percent and + three percent, respectively. Hiring intentions in Canada (+27 percent) softened both quarter-over-quarter(- three percent) and year-over-year (- four percent). Hiring managers in Costa Rica reported the strongest intentions (+41 percent) both regionally and globally, regionally followed by Brazil (+38 percent). The lowest confidence was seen by employers in Argentina (+11 percent).
Hiring managers in the Asia-Pacific region anticipated increasing headcount (+32 percent), improving when compared to the previous quarter (+ one percentage point) but weakening year-over-year (- eight percentage points). India (+37 percent) and Singapore (+36 percent) reported the strongest outlooks in the region. The most cautious outlooks were reported by employers in Japan (+11 percent).
Other Key Findings
Businesses in the IT industry continued to report the brightest outlook (39 percent), followed by financials and real estate (33 percent), communication services (31 percent), healthcare and life sciences (31 percent), and energy and utilities (31 percent).
When ManpowerGroup asked to rank the top drivers of workforce productivity, employers pointed to: professional development through training, upskilling, and reskilling (40 percent), establishing clear goals and objectives for staff (37 percent), and cultivating a positive work culture that includes performance recognition (36 percent). The lowest factors identified: leveraging new, AI-enabled tools (18 percent), in-person collaboration (19 percent), growing adoption of existing tech (20 percent).
In evaluating candidates beyond their technical skills, employers ranked: communication, collaboration and teamwork (39 percent); accountability and reliability (33 percent); reasoning and problem-solving (29 percent); active learning and curiosity (23 percent); and resilience, stress tolerance, and adaptability (23 percent) as key soft skills.
To overcome talent shortages, employers reported being more willing to hire applicants who are older and seeking employment changes (34 percent), have been unemployed due to caretaking responsibilities (27 percent), have non-linear career paths (27 percent), and/or have been long-term unemployed (26 percent).
Using AI for Hiring
“I believe that AI will be extremely helpful in identifying potential candidates, market mapping, creating job descriptions, scheduling interviews, optimizing database information, and crafting candidate profile summaries,” said Dana Feller, founder and managing partner of Hudson Gate Partners LLC. “Any task that is highly manual and time consuming can be greatly improved by AI. Increasing use of AI should reduce the need for search firms to have deep research teams. AI will allow smaller firms to have access to extremely high quality research without needing to hire extensive research personnel. For more junior roles, AI can also be useful for making the initial reach out to candidates in an attempt to pique their interest.”
“Candidates with less than 10 years of experience will likely be somewhat receptive to AI solicitations,” she said. “However, I do not believe that AI will be successful in any form of reach-out to more sophisticated, senior candidates. Those individuals will continue to expect to have a kid-glove, human touch.”
“The potential is there for some real revolutionary gains in productivity, but it is unknown at what point that horizon of sophistication will be where it becomes a valuable tool for search firms,” said Ryan Kellner, head of the data science, quantitative analytics, and IT practice at Hudson Gate Partners. “Right now AI largely exists as a decent HR tool for sorting and grading existing data such as 100 current applicants for a certain job, writing some good job descriptions, or using resume scraping and AI chatbot functions to ask initial screening questions to candidates.” The evolution of this comes if AI systems can be trained with enough data to see who may be getting ready to make a move, or to automatically recommend companies/titles/candidates based on a role and a set of existing candidates/employees, says Mr. Kellner. “There will also be some interesting applications of machine vision during video interviews to further assess aspects of personality, loyalty, truthfulness, creativity, empathy,” he said. “Companies like HireVue, Modern Hire, Spark Hire are already working on such things. At what point will they resemble the empathy test from Blade Runner? Hard to say.”
The Prospect of a Recession Remains Murky
In a new report, The Conference Board says persistent labor shortages, a possible recession, and then rebound in 2024 could be in store for the U.S. economy. Debbie Gollin of The Bachrach Group’s Jackson Lucas, Gary Erickson of Executive Search Partners, John Arbolino of Boothroyd & Co., and Adam Zoia of Glocap join Hunt Scanlon Media to share their thoughts on the economy and what lies ahead.
“What AI lacks, right now, is the ability to predict and identify people who have not applied to a job,” Mr. Kellner said. “The passive candidate pool if you will. However, that could be accomplished to some degree if systems could trained with large enough, real time datasets on companies, economic indicators, and similar career moves of industry peers. Of course, it would face the same challenges that we face when finding candidates who have very little description of what they do, or candidates who have scraped themselves off social media and LinkedIn. What is a deeper challenge, and the real art form of executive recruitment, is taking that valued employee that you have identified who has been in a job for a few years and to take him/her on the journey from not looking to open to listening to interested in a role to active applicant.”
When asked if accuracy with machine learning algorithms for finding candidates, Ms. Feller said: Absolutely, when it comes to hard skill-sets, and I expect that AI will excel in this area,” she said. “But for most positions, where an executive recruiter is hired, at least 50 percent of a candidate being the right fit involves soft skills – personality, temperament, resilience, leadership abilities, management skills, etc. Getting to the bottom of whether a candidate has these skills takes in-depth conversations, probing questions, and multiple interactions. No high potential candidate will ever be willing to have extensive personal, revealing conversations with an AI.”
“We have started using AI to craft and enhance job descriptions,” Ms. Feller said. “AI does an excellent job creating a basic job description that can get us 80 percent of the way there, and then we will customize the remainder of the job description to make it very client / position specific.”
Finding top tier candidates for very niche roles with the highest caliber companies will never be done properly with AI, according to Ms. Feller. “Beyond the initial identification of potential candidates, it takes the skill and judgement of an outstanding recruiter to deliver an optimal search experience,” she said. “No two searches are ever the same. Ever. They are nuanced and usually have a last minute complication or wrinkle of some sort. Having a skilled recruiter as the intermediary between a demanding client and a highly sought after candidate will always be needed in order to manage the complex and sensitive negotiations often needed to get offers accepted.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media