Recruitment in the enterprise landscape is full of challenges that demand urgent attention and action. Economic uncertainty, fierce competition for top candidates, widespread skill shortages, and a disconnect between the value placed on diversity, equity, and inclusion (DEI) and its implementation, are some of the pressing issues faced by enterprises.
In response to these challenges, several enterprise recruitment trends have emerged that reshape the recruitment strategies of organisations.
Challenges enterprises face in recruitment
There are three main challenges that have led to the new emerging trends when it comes to recruitment:
- Economic uncertainty and fierce competition for top candidates. A report by McKinsey highlights that now more than ever companies are walking the talent tightrope and trying to balance budgets while placing focus on matching top talent with the most suitable roles, with 20-30% of critical roles filled by people that are not the best fit.
- Skill shortages are at an all-time high. Almost 75% of TA professionals report that their business faces a skills shortage, and 78.2% believe that skills shortages and gaps are among the three most significant issues they will face in the near future.
- Disconnect between the value organisations place on DEI and how it’s being put into practice. Many organisations claim to prioritise diversity, equity, and inclusion (DEI), but their actions and policies often fail to align with those stated values. While 39% of job seekers don’t pursue or even turn down job opportunities because they perceive a lack of DE&I focus in hiring. It is clear that in today’s talent-centric market enterprises have an obligation to create workforces as inclusive as possible.
This requires urgent attention and action. What are the enterprise recruitment trends that have emerged as a response to the ongoing challenges?
Trend 1: DE&I is more than a value statement
As the labour market becomes increasingly talent-centric, more individuals recognise the responsibility of employers to foster an inclusive workforce, where every person feels valued and can thrive. The implementation of meaningful DE&I initiatives throughout the entire talent life cycle plays a pivotal role in executing a successful enterprise talent strategy.
Employers across the board are recognizing the undeniable importance of DE&I in their talent strategies. It’s become the new standard that influences every aspect of their operations. Those who have embraced DE&I understand its power as a competitive advantage in attracting top talent. By prioritising DE&I, companies have experienced significant positive impacts on their business – 68.3% improved employee retention, 73.2% improved talent attraction, 45% increase in revenue, and much more. It’s clear that organisations refusing to prioritise DE&I are missing out on a game-changing opportunity.
Here are a few examples illustrating that change is taking place, and DE&I is more than a value statement:
- Capgemini has launched an ambitious program focused on improving female representation in recruiting, providing mentoring opportunities, and supporting women at the company. Capgemini are committed to having women make up 40% of their workforce by the end of 2025, with 30% female representation on the executive leadership teams.
- KPMG has set measurable DE&I goals that are actionable, measurable, and transparent: including increasing ethnic representation across all organisational levels, increasing representation from underrepresented groups to 50% at the level of partners and managing directors, including doubling their Black representation, and increasing their Black and Hispanic/Latinx workforce by 50%.
- As discussed in a report by WEF, EY launched Neuro-Diverse Centers of Excellence in 19 cities in 8 countries, with a 92% retention rate for neurodivergent employees hired through the programme.
Through prioritising and implementing DE&I strategies, enterprises are aiming to not only attract top talent but also create inclusive environments where individuals can thrive, leading to positive impacts on both their workforce and business as a whole.
Reading tip: 13 benefits of diversity in the workplace statistics
Trend 2: Employer branding is no longer optional but essential
The job market is expected to continue being challenging, with talent having the advantage in the coming years. This places a significant emphasis on people experience (PX), which can be perceived as an extension of both candidate and employee experience.
This shift is about recognising the importance of creating an attractive organisation that fosters and nurtures DEI, as well as elevates the employer brand.
To successfully attract top talent, enterprises must adapt their employer branding strategies to align with evolving candidate expectations. This involves reimagining the organisation’s unique culture, values (Randstad’s Workmonitor survey of 35,000 workers around the world shows that 77% feel a company’s values and purpose are important when selecting an employee), and employee benefits while emphasising authenticity, transparency, and the crucial aspect of diversity, equity, and inclusion (DE&I).
Latest report by Randstad, highlights that 76% of HR professionals say that candidate experience has become more important to their organisations than ever. By optimising recruitment processes and providing a personalised, transparent, and inclusive journey, employers can create a strong positive impression on candidates.
If enterprises fail to deliver an excellent candidate experience, they risk missing out on top talent. But how are enterprises doing this? According to the same research by Randstad mentioned above:
- 74% of companies are making DEI a centrepiece of their talent strategy
- 72% are using technology as means of improving engagement
- 69% are investing in internal audits as means of mapping the candidate experience from job search to hire.
- 71% are creating specific talent communities, as well as content plans to both engage and nurture future talent.
Trend 3: Shift from experience to skill & competency based hiring
According to the LinkedIn Future of Recruiting report, skill-first and competency-based hiring is estimated to become the gold standard in the years to come, surpassing factors such as educational background or job history.
World Economic Forum reports that cognitive abilities are growing in importance most quickly, reflecting the increasing need to adapt their workforce creation strategies to keep up with the evolving market demands. Specifically, with rapid increases in the importance assigned by companies to skills such as creative thinking, analytical thinking, and technological thinking, as well as learning ability, flexibility, resilience and agility.
LinkedIn News Europe highlight that specifically in an AI-enhanced world, soft skills, such as learning ability will play a big role in adapting to new workplace situations and tasks. It will become one of the most important skills in the labour market of tomorrow. The AI landscape is ever-evolving, and candidates who can quickly learn new technologies, frameworks, and methodologies will have a distinct advantage.
With the adoption of skills and competency-based approach, organisations can enhance their agility by deploying workers based on their specific abilities and competencies, as well as their potential, paying less emphasis on job titles or functional areas. Research indicates that companies that embrace a skills-based approach are 57% more likely to be agile, which is a crucial determinant of success in the future. Moreover, research from Fast Company reveals that companies that prioritise skills-based hiring are 60% more likely to successfully fill positions from their talent communities. This presents a clear advantage in a competitive market where securing top talent is critical for business success.
Executives recognise the benefits of hiring based on skills and competencies as it helps democratise access to opportunities for candidates. Deloitte reports that as much as 75% of execs believe this approach enables a more fair and inclusive recruitment process. Plus, research shows that a skills-based approach leads to way more overall benefits than an approach that is not:
What is holding organisations back? According to the skills-based organisation survey, the top obstacles to shifting towards a skill & competency-first hiring according to 46% business and HR executives are legacy mindsets and practices.
The need to look for viable alternatives to the CV
As traditional hiring process components, such as CVs and cover letters, are not successful at effectively and reliably capturing candidates’ skills, competencies and aspects that are actually predictive of future job performance (behaviour and cognitive abilities), enterprises are forced to search for more effective ways and methods of identifying top talent.
However, despite this growing need to look for viable alternatives, many enterprises find themselves stuck in a state of uncertainty. Resistance or scepticism within companies from within is hindering the adoption of new alternative methods. Some are hesitant to let go of the familiar CV-based evaluation process, expressing concerns about the reliability, fairness, and predictive value of the alternatives available.
With approximately 76% of organisations using skill assessments, a shocking 71.3% are still opting to rely on work experience and perceive it as a better, more reliable indication of a candidates’ skills when hiring. Even though research has shown that work experience actually has low predictive power when it comes to job performance. Successful implementation of alternative assessment methods requires enterprises to strike a balance between embracing innovation and addressing stakeholder concerns. Here are some steps enterprises take to overcome this:
- Before implementing alternative assessment methods, it’s important to conduct comprehensive research to understand the benefits, limitations, and best practices associated with these methods. Consult experts, consult others that are using the tooling to gather first-hand information about it.
- Actively involve stakeholders throughout the decision-making process, as well as implementation of the new assessments – discover their needs, seek input, gather feedback, and address their concerns.
- Prior to full-scale implementation, enterprises often conduct pilot testing to evaluate the effectiveness and feasibility of the assessment methods. The feedback gathered during pilot testing helps to identify potential challenges and refine the methods to address stakeholder concerns.
For example, Vodafone, Randstad, and Ahold Delhaize, have already turned to innovative methodologies and tools, such as game-based assessments, all with the goal of gaining a more comprehensive and accurate assessment of a candidate’s abilities and potential.
Trend 4: Internal mobility, upskilling and reskilling
The emphasis on internal recruiting and mobility is gaining prominence, as organisations recognise the value of their existing talent pool. Research from LinkedIn highlights:
- 76% of EMEA recruiting professionals view internal recruiting as crucial for the future of talent acquisition.
- 44.7% have witnessed an increase in internal mobility over the past 18 months.
Internal mobility yields significant benefits, including higher employee retention rates. LinkedIn’s data reveals that employees in BENELUX stay 1.5 times longer when employers are committed to internal hiring.
When enterprises prioritise internal recruiting, this can reduce the number of external job openings available and potentially limit the opportunities for new candidates to join the organisation. Therefore, the increased focus on internal mobility may result in a decrease in external recruitment, as enterprises aim to promote and develop their existing employees rather than hiring externally.
Additionally, upskilling and reskilling employees are pivotal factors shaping the future of talent acquisition in enterprise recruitment:
- 81% of global recruiting professionals anticipate the importance of upskilling and reskilling in future recruiting. This recognition stems from the realization that the workforce of tomorrow requires continuous learning and development to stay relevant in an ever-evolving job market.
- Alarming statistics from the World Economic Forum highlight the urgency of prioritising upskilling and reskilling efforts. It is projected that six out of ten workers will require training by 2027, yet only half of the workforce currently has access to adequate training opportunities.
Once enterprises invest in developing the skills and capabilities of their existing employees, they may have fewer immediate needs to hire externally. Through upskilling and reskilling their workforce, organisations can fill skill gaps internally and reduce their reliance on external recruitment.