Workforce Trends to Watch in 2023

Predicted recessions, talent shortages and shifting career paths mark the end of 2022, will this continue in 2023? On this month’s Subject to Talent podcast, Allegis Global Solutions Lead Market Analyst Kaitlyn Canarr rejoins the podcast to review workforce trends from 2022 and lay out what they indicate for workforce planning for 2023. Canarr shares what to expect, as well as ideas for how organizations can thrive in the new year.

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Bruce Morton: Welcome to Subject to Talent, brought to you by Allegis Global Solutions (AGS). Similar to you, we're always trying to learn more. On this podcast, we speak to workforce and talent experts from around the world, covering market trends, technology, and our ever-evolving dynamic industry.

Hi, I'm Bruce Morton, the host of the Subject to Talent podcast. Today I'm joined by Kaitlyn Canarr, lead market analyst here at AGS. Kaitlyn has been with AGS for nearly four years now and has provided invaluable insights and analysis for our staffing leaders over her tenure. Welcome back to the podcast, Kaitlyn.

Kaitlyn Canarr: Thank you, Bruce. I'm so happy to be back with you.

Bruce Morton: Yeah, here we are. We were together just a year ago and we're excited to have you back. Now those regular listeners will know, we typically kick off by asking our guests, how they got into the workforce solutions industry, but since you've shared that journey with us before, I encourage our listeners to go back to episode 3.1 to hear that and hear your journey, so we can dive quicker into the goods of today's topic.

So last year you joined us on the podcast to share forecast for the talent market for 2022. And here we are, as we're coming to the end of that, can you update us on some insights you shared then, any predictions that were significant for the year and where the market stands overall for the year?

Kaitlyn Canarr: So, Bruce, when we chatted last year about what we were expecting to see throughout this year that we currently just experienced, a main topic for us was labor shortages and how that is impacting sourcing and how that will impact the labor market. At the time, we hadn't fully recovered all of the jobs that were lost due to COVID, but we were projecting that we anticipated continued growth through this year. So, we did see that. We've recovered all of the jobs that were lost from COVID from a total employment perspective, and we've continued to grow. So, our overall employment level sits higher than it did prior to the pandemic. And our challenge that we predicted we would experience throughout this year, really did come true, and I think a lot of organizations really felt the mounting pressures from labor shortages. So those early exiters of the labor force, they haven't returned yet. And that is still the challenge that we're faced with today is that labor force participation has not returned back to the pre-COVID level. So that really is driving a lot of the tightness in the market today.

So where do we currently stand today? What are we expecting in 2023? We are still experiencing those widespread labor shortages and there's no industry that is immune to those challenges. We have historically high employment levels with over 11 million jobs open, and the market is still feeling those initial COVID impacts from disengaged workers and early retirees and even workers that are more enticed now to switch jobs, because we're seeing a rise in wage pressures among job switchers, because employers are using that as a tool to entice workers away from their current opportunities to a new opportunity. So that's really applying a lot of additional pressure to the market that I think, last year we may have not necessarily expected, but because of the tightness and the lack of recovery in the labor force, the pressure on wages has mounted at a little bit of a faster pace than we would've expected to see.

Bruce Morton: So, it sounds like even though we were predicting some pretty big bold statements, they all came true, and it was as bad as we all thought it was going to be from a shortage of talent perspective. And it sounds like what you're saying now is, hey, that isn't over. Even though we're hopefully in a post COVID world, we're still seeing the knock-on effects of that.

Now we all discussed, I personally think the awful term, great resignation, but anyway, over the last couple of years it's become the zeitgeist, but we actually did a podcast on it in Season 2, you can look for the episode with One North. But is this still a factor in the market and do you see that trend, whatever we want to call it, continuing into this new year?

Kaitlyn Canarr: Yeah, I think that's a great question. When we were discussing the great resignation earlier this year with a lot of our clients and organizations, I think at that time we were expecting it to be temporary. We thought, okay, the great resignation will be a period of time. We might have significant levels of resignations for short-term, maybe a couple of months, but that has not been the case. It's now more of the overall trend, I would consider that. The quit level is still very high, higher than it was prior to COVID. So, this level in line, like we've discussed with job openings being at historic levels, the rate that workers are resigning from their current opportunities is also at a historic high. So, I think that that really is the takeaway here. We're still seeing workers quit their existing opportunities at a record pace, which indicates that this is not a short-term trend. This has become the "new normal" for employers. They're dealing with these evaporated talent pools.

Bruce Morton: Right. So, we think about this being a new normal, many financial reports and workforce trends are predicting a recession here in the US and elsewhere of course, due to inflation and natural gas shortages and the knock-on effect of the supply chain, but not necessarily historically what we would call a global recession. Can you speak to what that may mean for employers, as I'm sure people are crossing fingers and not quite sure what to call this thing, but is it coming in 2023?

Kaitlyn Canarr: Sure. I think the important part here for employers to keep in mind and something that I'm always cautioning our own clients, is the association with a recession, I think, for a lot of people is that will result in large numbers of available talent. And I would like to caution everybody that that's not likely to happen, because we've had prolonged labor shortages that have been building for more than a decade. So if we start to experience layoffs or even if the labor market starts to cool and it's not growing at as fast as the pace as it has in the past, I don't think that that will likely lead to a lot of relief for employers, because we still have such intense levels of competition now and we're still navigating the impact of people exiting the workforce earlier than we expected and in larger quantities. So that level of retirees, that's much higher than we expected.

But we also have workers that have been in industries that have been significantly impacted and they've chosen not to return to that industry because of how tough it has been in the last few years. So, we would consider a potential recession next year as a jobs full recession because the pressures that we're experiencing in the contributors that would result in the market landing in a recession, are not necessarily associated with labor or talent. They're more linked to goods and services. And that's tied to the wage pressures that we talked about earlier.

Bruce Morton: Right. It's fair to say that from an inflation perspective, everybody's predicting it's going to come down, hopefully around the world at slightly different paces. But to summarize, you're saying that if some of that inflation is caused by wage increases between the service industry and that's not going to come back. Whereas right here, the price of gas was at $4.50, it's below three bucks now. So, I guess you're saying that some things will be impacted by the leveling of the supply chain, but other things we best get used to that new price point?

Kaitlyn Canarr: I think so, because the inflation that's occurring in the US is a lot stickier, because it's associated to services. So, like you said, for a haircut, it's going to be more expensive because that worker is being paid a higher wage. And that's a lot harder to walk back then, like you said Bruce, the price of gas. We are not going to as easily be able to walk back wages, because that's of course, tied to that worker's livelihood.

Bruce Morton: Yeah, and that becomes the new norm, the new level. Yeah, interesting. So, with that everything that we've been through the last few years, would you say that workers have less loyalty now to a company and they place more emphasis on their own craft or their own skills building? And obviously we continue to see the rise of temporary workers or contingent workers and the gig economy and so on that those numbers are going up constantly. So, are people becoming more loyal to their craft than they are to what it says above the door, the name of the company?

Kaitlyn Canarr: I think that's a great question, Bruce, and I would say yes, we've seen job hopping is still a trend. We've seen the quit level is higher than it's ever been. And there are more opportunities for workers out there now than there ever have been in history. So, I don't find it very surprising that we're seeing a lot of job hopping, because they are eager to protect their craft and grow their skills. So, if they're not getting that development and that support from their current opportunity, they don't have a decade of loyalty to a company to feel like they've got to stick it out. They're more enticed to take a different opportunity that may support them in the way that they're looking for.

And we see more evidence in this from the data side. Like you said last year, I'm a data geek and I always like to back this up just with data itself. When we look at total employment overall in the last decade, we’ve seen that grow about 14%. When we look at temporary staffing segments, so employment agencies, that’s grown by over 20% during that same period. So those sourcing difficulties, again, that employers experience today, have been mounting in building for some time. And that growing reliance oncontingent workersis an indicator of that market tightness. Because if employers are not able to source full-time permanent employees, they have to fill that role either way. So, they're turning to contingent workers and that is certainly contributing to the intense competition in the job market and certainly in our industry in staffing.

Bruce Morton: And independent workers, that's another category that we've seen rise here in the US as well, right?

Kaitlyn Canarr: Yes. We've seen a significant rise in independent workers by 26% in 2022. So, there are nearly 65 million independent workers in America. And I think that also illustrates that potential mistrust with a permanent employer. So, as we see more demand in this area, I think we're going to continue to see that number rise.

Bruce Morton: And would that be fair to say as well for the individuals that are looking for fully remote jobs, is that number rising as well?

Kaitlyn Canarr: Yes. I think that the flexibility and remote opportunities, that's the name of the game now, because we are coming out of nearly three years post pandemic conditions, at least one of which everyone was fully at home for. And workers have grown to have a strong preference for that flexibility and a remote opportunity. And they've got the bargaining power still, because of the significant number of jobs that are open. So, we are starting to see more demand for fully remote jobs as employers try to cater to those needs in the workforce today.

Bruce Morton: Right. Thanks for that. Well very recent news of course, we've seen a lot of volatility in the tech market, that's an understatement, seeing several layoffs right now as a kind of, I guess, a right sizing, some are calling it after a huge hiring surge the last few years. Is this an actual trend to watch out for?

Kaitlyn Canarr: I think this will likely be a trend. What we mean when we say right sizing, that is a good example of that I think is actually better to describe versus a definition. But for example, let's say there's a video conferencing company that hired a high volume of workers at the start of COVID. They're now starting to peel back, because the ability for them to sustain that demand over time is unachievable, because there's simply not a lot of supply. So those large organizations, whether they're large tech companies or big box retailers, they overbought during the start of COVID and because of the labor shortage challenges and additionally the supply chain constraints, that's what's resulted in their slowdown and their layoffs this year, because they just simply cannot sustain that level of demand. And that's why we're starting to see those large layoffs.

What I would say on the heels of that, while there may be large numbers of layoffs in the news, that's the attention-grabbing headline, those workers that are being laid off, are likely to be consumed by a different industry. So going back to that video conferencing example. Those IT workers that are maybe potentially being laid off, there's still a need for them, whether it's in the healthcare industry to develop or contribute to healthcare systems, or in engineering, or any other financial industry. So that talent, there's still such demand for that talent that again, we will not expect to see a large influx of available talent simply because of the shortage of actual workers that exist and the level of demand that these organizations are trying to achieve.

Bruce Morton: So, it sounds like it'd be fair to say for organizations listening in looking to attract tech talent, that perhaps the now is the time to be a bit more open in their list of requirements. Perhaps look for people that have come out of different industry, perhaps tech industry, as you say, into hospitality or something like that as opposed to the must have hospitality experience. Let's look at the tech companies themselves as a source.

Kaitlyn Canarr: Exactly. I think that's a great point, Bruce. And there is going to be, I think, a small window of opportunity for these other organizations that are maybe not... They don't identify as a technology company, but they have a high need for highly technical IT workers. So there is a window of opportunity, and I think that this is probably just going to be very short term again, because there is such a need for this technical talent, but it does provide a window of opportunity for those other organizations to capitalize on this moment and maybe fill some of the roles that they've been struggling to, or tap into some different industries or different hiring strategies to bring those maybe non-traditional hires or non-traditional candidates into what they need.

Bruce Morton: Right. Great point. So, as we wrap up this quick check-in here, and I'm so glad we're able to do this, and congratulations on the predictions from 12 months ago. People can check back on that episode 3.1 and hear them from a year ago. But I normally ask a crystal ball question, but because we've been talking about predictions, I want to change that up slightly. So, based on everything we've talked about today, what are your three or four, two or three, whatever it is, bullet points for what organizations should be thinking about right now as they navigate themselves through 2023?

Kaitlyn Canarr: Sure. I think there are many strategies and many things for organizations to think about to give them a cutting edge. I think we need to continue to consider out of the box strategies, because there is so much competition. Everyone is trying to fill their roles. So, strategies and attractiveness in the job posting that may set you apart, is very important. And I think on top of that, organizations should build a diversified workforce plan. And we don't have to continue to think in full-time employment roles solely. Considering temporary employment is a great option, especially as we've seen the desire for temporary employment from an employee's perspective grow. There's a bit of a preference there, particularly in the younger workforce. So, I think that is, again, there's another opportunity to capitalize on the talent and their preference.

Continuing to advertise flexibility and work from home positions. We know that that is a preference of workers. Not advertising that and not being open to flexibility in working arrangements, is a huge disadvantage, because that is something that the workforce values now more than I think they ever have before. And there's a little bit of a disconnect, I think, between the employee that has the preference, and the decision makers that are driving the change. So, I think that's another really important thing for decision makers and leaders of organizations to be aware of, that the workforce that you're managing, that you're trying to retain and potentially grow over time, you have to accommodate their needs because again, they have the power in this market, at least for the time being. And that's where we're at today. So, we have to play the game as best as we can, for lack of a better phrase.

Bruce Morton: Great. And as you said earlier at the start, the number of opportunities being advertised out there, it just seems to be getting bigger and bigger. The workforce isn't growing, but the number of openings is. Would that be fair to say?

Kaitlyn Canarr: I think that's absolutely fair to say. We've seen job postings and employment continue to grow. In fact, this year there were 60% more jobs added each month, compared to prior to the pandemic. So that's our smoking gun. The mentality of employers is to hire, not fire. And that comes back to our discussion on the recession. So, we have a lot of mid-size or even small organizations, that are continuing to hire, but it's those larger organizations that historically have been large consumers of talent that are beginning to peel back and lay off.

Bruce Morton: Right. Great. Wow. Fascinating stuff as always. Thank you so much Kaitlyn and thank you for joining me today. And could you just give a quick reminder as those folks out there, how they can check you out and follow you?

Kaitlyn Canarr: Yes. Thank you so much for having me again, Bruce. It was great to chat again. You can find me on LinkedIn. My name's Kaitlyn Canarr and I'm a lead analyst for the market analytics team at Allegis Global Solutions.

Bruce Morton: Thanks, Kaitlyn.

Kaitlyn Canarr: Thank you so much, Bruce.

Bruce Morton: To learn more about AGS, please check us out at You can also send questions for me or our guests. Just tweet us here @AllegisGlobal with a #SubjectToTalent or email us at And if you enjoyed our podcast today, please subscribe, rate us and leave a review. Until next time, cheers.