The 2023 “vibe shift” in the workforce has companies rapidly adapting their strategies to attract, engage, and retain top talents.-By DONNA CHAN

As 2022 drew to a close, companies became aware of what many are calling a major “vibe shift” among their employees and prospects. It has continued into 2023, crystalizing along frameworks with serious implications for recruitment, engagement, and retention in 2023 and beyond.

What’s changed? In short, it’s economic power dynamics, belief systems, and a new work world where not everyone has regained their comfort with office life. While these changes are far from finished in their impact, staying on top of the emerging trends will help front line and executive leaders make smarter choices in the months and years ahead.

Emerging Trends In Recruitment

In recruitment, companies are seeing some relief from the brutally tight and competitive talent markets of the last 18 months. Layoffs in the tech world and elsewhere have made more talent available, while existing employees are less likely to leave roles they perceive as safe (more on that in a moment). As a result, firms across the country are able to spend less acquiring top candidates while gaining access to a broader pool of available workers.

Speaking to The Wall Street Journal in March, ZipRecruiter CEO Ian Siegal noted that the company was seeing a surge of job seekers compared to a relative softening in the number of open positions. Fellow online recruitment companies Indeed and Glassdoor noted that companies across industries were also less willing to “pay to hire” in recent quarters, citing a decline in firms feeling the need to pay for featured or sponsored listings. Of course, just because this is playing out at a national level doesn’t mean individual market niches will seem the exact same phenomenon. Still, the balance of power is shifting somewhat, on the ground and in prospective hire mentalities. While skilled workers are always in high demand, the economic downturn and layoffs in the headlines may make recruitment easier as workers seek to secure good long-term arrangements rather than negotiating as hard as possible for large salaries or specific work accommodations.

Emerging Trends In Engagement

Between the “Great Resignation” and “Quiet Quitting” companies have seen and heard more about employee engagement in the last 18 months than perhaps ever before in history. And yet, for all the ink already spilled on the topic, it’s an issue that many firms are only just beginning to address head-on.

The bulk of the rising interventions are tied to re-establishing or reinforcing company culture. So many workplace norms and soft ties between work groups were dramatically altered by the pandemic, and it hasn’t been a smooth snap-back in most organizations. Layer in the Millennial and Gen Z preference for working at organizations where there’s a value alignment, the Gen X rediscovery of work-life balance, and Boomer-aged employees focus on issues of legacy, and the questions of “What are we doing here? Why? And why does that matter?” suddenly hit a lot deeper than surface level mission statements and corporate mottos. Employees who can’t connect with the culture, or who find themselves in a place where the way the culture has evolved away from how their own personal values may have shifted, are presenting a tough set of challenges for companies.

At the extremes, you have situations like Twitter, where a part of Elon Musk’s takeover of the company involved requiring employees to actively recommit to the new culture of the reshaped organization or head out the door. More typically, you see firms doing more to be more vocal about what their values are and where those came from, seeking to re-engage employees around a shared set of core values.

For example, a Midwestern bank in 2022 found that due to pandemic era churn and retirements, they would be replacing more than half of their workforce over the next 12 months. Obviously, this vast influx of new personalities would carry with it serious cultural and engagement implications. Yet the existing onboarding experience didn’t include any education or orientation around the firm’s values or how those values were meant to be expressed in daily business operations. So, for 2023, the company is making its largest ever investment into cultural orientation for new hires, hoping to establish a strong, shared culture from the start to maximize engagement from Day 1.

Emerging Trends In Retention

While a growing uncertainty around the economic climate has talented employees becoming more likely to stay in roles they perceive as safe, an economic downturn doesn’t give firms a free pass on retention programming. In fact, employees feeling like they no longer have a good connection with their employer or that their career no longer meshes with businesses demands is still driving an exceptional amount of churn. This is being seen in the tension around return-to-office policies, the stunning numbers of women leaving managerial roles, and employee reports of mental health challenges at work.

Employers can help address these issues by investing in building positive connections at work. In a 2022 Gartner survey, researchers found that organizations that help employees build connections end up with a workforce that’s five times as likely to be on a high-performing team and 12 times as likely to feel connected to their colleagues. This can help foster good mental health at work and make return-to-office shifts a more positive experience.

Employers can also help fight churn among women and high potential talent by positioning the workplace as a life-enhancing environment. This can include providing high-quality childcare on site, moving toward four-day workweeks or other hybrid arrangements, and investing in mental health support services at work or through the office structure, according to 2022 research from McKinsey & Co and the Marshall Plan for Moms. Plus, while these retention strategies may be targeted at women and top talents, they can have major benefits for everyone and give companies more options when it comes to retaining valuable workers.

Will it be enough? Time will tell. 2023 is proving to be an ongoing challenge for many firms. Still, by being aware of how things are trending, firms can adapt their recruitment, engagement, and retention strategies to what’s happening now, allowing them to operate in alignment with the current realities and make the best possible plans for the future.