A Look Back at the Top Talent Acquisition Stories of 2023

Hiring moderated in 2023 as the U.S. labor market continued its post-pandemic recovery. Interest in HR roles grew, as did candidate dissatisfaction with the hiring process. The concept of skills-based hiring generated more discussion, global jobs site Indeed reversed a pivotal decision, and use of a new version of Form I-9 became mandatory.

Here’s a look at some of the year’s biggest talent acquisition news.

New Form I-9

The new version of Form I-9 was released by U.S. Citizenship and Immigration Services (USCIS) on Aug. 1.

“The instructions are more streamlined and clearer,” said Michael Neifach, an attorney in the Washington, D.C., regional office of Jackson Lewis. “I think it will be helpful and overall make it easier for employers to use, for example removing the requirement to enter ‘N/A’ in certain fields.”

The most notable change to the form is the addition of the checkbox for employers interested in using the newly authorized alternative virtual verification procedures. Not having to inspect and verify employment authorization documents in person is a “very welcome development and something that HR practitioners have been calling for for a long time,” Neifach said.

The new form became mandatory for all employers as of Nov. 1.

Hiring Challenges

At the start of 2023, economists predicted a slowdown in labor market activity in the U.S. due to a likely recession—which failed to materialize—as well as high interest rates, increasing layoffs and higher unemployment. Layoffs were slightly elevated in a few industries, and unemployment also increased slightly but is currently at 3.7 percent.  

Overall, the labor market moved toward its post-pandemic “return to normal.” The number of job openings, which reached its highest level in 21 years in 2022, started to decline. Hiring also began to moderate, and the average quit rate steadily decreased.

“A few things will weigh on the labor market in 2023, starting with inflation controls,” Jay Denton said at the beginning of the year. Denton is the chief analytics officer at LaborIQ, a compensation and labor market analytics software company based in Dallas. “Higher interest rates, the lack of available talent and the shift to pre-pandemic behaviors will all impact the labor market,” he said.

But data shows that in the future, the far greater concern will be something that’s not as easy to address: demographics.

“Demographic shifts and aging populations mean countries like the U.S. will experience an ongoing shortage of workers and hiring will remain challenging for years,” said Svenja Gudell, chief economist at Indeed. “Without sustained immigration or a focus on attracting workers on the sidelines of the labor force, [there] simply won’t [be] enough workers to fill long-term demand for years to come.”

HR Roles

Data from 2023 showed that new HR roles are on the rise, while the share of job seekers working in human resources and looking for jobs outside HR is still disconcertingly high.

Five of the 25 fastest-growing roles in the U.S. since 2018 belong to HR, according to an analysis of LinkedIn data.

“It’s really exciting news for HR,” said Laura Mazzullo, founder and owner of East Side Staffing, a New York City-based recruiting firm focused on the placement of HR professionals. It’s also not necessarily intuitive, she said. “Normally in an economic downturn, you see more general roles and less specialized ones. And when times are better, HR usually has more money to spend on a larger team and can break out into specializations like employee experience or diversity, equity and inclusion.”

Mazzullo added that the rise in breakout roles is much needed in HR as the profession has been hammered in recent years and burnout is proliferating.

HR burnout could be behind the finding that 63 percent of HR professionals showed some interest in non-HR jobs while browsing listings on Indeed, according to recent data from the global jobs site. On the other hand, jobs in human resources are attracting a substantial amount of interest from job seekers working in other industries, with about 36 percent of clicks on HR job postings on Indeed coming from non-HR practitioners.

The perpetual argument from some talent acquisition professionals that recruiting and hiring should be removed from under HR continued in 2023. The push for separation typically comes from recruiting professionals who want more of a direct line to business leaders such as C-suite executives or to department heads with specific talent needs. Recruiters also say that HR, as an umbrella function, faces too many competing priorities and has not traditionally valued talent acquisition as the strategic asset it should be.

Others argue that more holistic integration—not separation—is the solution to any disconnect between talent acquisition and HR.

Skills-Based Hiring

More employers are becoming aware that assessing candidates on their abilities and potential, rather than degrees and job histories, can help relieve talent shortages, increase diversity and strengthen internal mobility in the workplace.

Emily Field, a partner at global management consulting firm McKinsey & Company, said skills-based hiring is “one of the main topics that I hear CEOs and CHROs asking about. They continue to face a skills gap and a talent shortage, and at the same time, recruiting technology is screening out more than half of the applicants due to [their not meeting] education and experience requirements.”  

The first—and most important—step to implement skills-based hiring is to shift thinking. “The change management piece will be the hardest part,” Field said.

Technology can turn the promise of a skills-first future into reality for employers—and the skills tech market is flourishing. This market is evolving rapidly but is still in its early stages, according to Stacia Garr and Dani Johnson, co-founders and principal analysts at RedThread Research, an HR technology analyst firm in Woodside, Calif.

Artificial intelligence is being seen as a potential accelerant for the movement, both as a way to identify skills and operationalize skills mobility and as the catalyst to do so.  

Gerald Chertavian, founder and former CEO of Year Up, a workforce development organization in Boston, said the advent and widespread rollout of AI will benefit the skills-first movement by helping managers discover what skills they need and where skills gaps exist.

“AI is the catalyst that will usher forward a positive era of skills-first hiring as long as employers continue to prioritize this shift,” he said.

Chertavian said he understands that something as powerful as AI can be misused. But he also trusts that people will recognize when that is happening and correct it.

“I promise you that AI will do more good than bad and push the skills-first movement beyond anything we have ever seen,” he said.

The SHRM Foundation has made educating employers about the use of skilled credentials in talent acquisition a priority. A significant portion of HR professionals value skills-based hiring assessments, and some would weight them strongly as alternatives to traditional education and experience qualifications, according to research from SHRM.  

Candidate Behavior

Satisfying job candidates continues to be a challenge. For the second year in a row, candidate resentment—a measure of negative experience with the hiring process—rose around the world. The only region where candidate resentment didn’t rise was in North America, where it dipped but remains historically high, according to research from the Talent Board, a Santa Cruz, Calif.-based nonprofit organization that produces the annual Candidate Experience Awards and releases the data that determines the winners each year.

Talent Board President Kevin Grossman explained that job seekers were more sympathetic toward employers struggling with an unprecedented set of challenges during the COVID-19 pandemic, but “candidate resentment never really went away.”

The top three reasons for negative sentiment about the candidate experience were:

• The recruiting process took too long.
• The candidate’s time was disrespected.
• Salary didn’t meet expectations.

“Candidates feel like they are not being heard,” said Susan LaMotte, founder, CEO and principal strategist at exaqueo, an employer-brand consulting firm in Charleston, S.C. “The Talent Board data shows that we’re not really making much progress on candidate experience, after all these years.”

Meanwhile, a Reddit thread titled “Red Flags in an Interview that Reveal a Job is Toxic” revealed that job seekers find the biggest turnoff in an interview is the use of the term “family” to describe a company.

“It may be meant to express that the organization is collaborative and team-oriented, trusting and respectful,” said Anna Cowell, a talent acquisition consultant at Washington, D.C.-based HR consulting firm Helios HR. “But it could be a way to describe an environment where undying loyalty is expected, or commitments go beyond typical job duties and working hours.”

Instead of having warm and fuzzy feelings, people could be reminded about family dysfunction and toxicity, said J.T. O’Donnell, a career coach and founder and CEO of Work It Daily, a career-coaching site based in Portsmouth, N.H.

Indeed’s Gamble

One of the biggest stories of the year was Indeed’s experiment with a new pricing model. The site first announced its new pricing scheme in October 2022 and rolled it out in early 2023, generating a wave of backlash from mostly smaller employers that reported confusion with the product and expenses that were much larger than normal. 

Pay-per-application pricing is when employers pay only when candidates apply to a job posting. It was meant to replace the foundational pay-per-click pricing model.

Indeed discontinued pay-per-application pricing on Dec. 18. “Pay-per-application was one recent test aimed at providing greater value to employers. Over time, we found that this option required additional effort from employers and was not easy enough to support the different needs of employers. We have decided to no longer offer pay-per-application,” the company said in a statement.