It seems like 2022 flew by – it’s hard to believe it’s time for a retrospective already! With much of the world back in a post-pandemic embrace, it was a rebuilding year for many, punctuated by gathering storm clouds in the tech sector.
In January, I threw three darts around trends that began to emerge in the pandemic and tried to extrapolate what we’d see this year. Let’s revisit those predictions from January:
“Remote-first will become the standard, ushering a difficult year for company culture.”
Looking within 50 miles of my corner of southeast Michigan – admittedly not an employment hotspot or a particularly diversified economy — there have been 85,369 open job postings on LinkedIn for remote jobs, 7,530 hybrid postings, and 61,756 on-site postings in the past month.
That’s a pretty significant uptick in in-person roles over the past twelve months.
I think segmentation is the story here. Newer, growing startups remain dialed-in to remote-first work, and the wide talent pool it enables. Larger, more established employers are trying to steer the ship back to in-person work, preferring the management visibility, collaboration and perceived productivity of face-to-face work.
Anecdotally, there’s still a pretty significant gap between intention and reality in these workplaces – while executives continue to push hiring for in-person roles, many offices remain ghost towns during the week. I think market trends in 2023 will determine if leadership teams are still willing to constrain their talent pool to local candidates in the hope that offices are once again buzzing with activity. And companies that recruited out-of-state candidates for remote positions in the past two years may never be able to achieve a culture grounded in the office again: even if new candidates remain local, their bosses may be remote indefinitely.
Totally non-biased assessment: B
“Inflation and competition for talent will drive increased salary transparency.”
While the tech hiring slowdown has certainly influenced the pace here, the trend toward salary transparency continues. Demographic trends are part of it: nearly 90 percent of Gen Z workers say they are comfortable discussing their salary with others, and a third say they openly discuss their pay with peers.
Colorado and New York City’s transparency laws were forecasted in some circles to have a chilling effect on hiring in those geographies, as employers excluded candidates there to avoid having to post salary ranges. However, 2022 research found a relatively modest 8.2% drop in postings in Colorado relative to a nearby peer state. Indeed, postings that include Colorado and/or New York pay ranges provide valuable data to job seekers throughout the country as they triangulate on where to invest time in the job application process.
SHRM has already noted the trend among its members: according to its research, 17% of companies are already including salary ranges in their postings, and 62% of companies have plans to.
Totally non-biased assessment: A-
“Necessity will drive innovative work arrangements.”
60 million workers performed freelance work this year – a record 39% of the workforce. But the source, Upwork, is hardly unbiased. At the time of this writing, LinkedIn, which skews in the other direction, has over 1.4M job openings currently – of which about 72,000 (or about 5%) are contract work.
So while I do believe small and midsize businesses have been forced to rely more on freelancers – and 59% plan to use more of them in the next six months, I think this is again more of a story of segmentation, where the talent crunch has left smaller employers unable to compete with big players in compensation and benefits, so they’re forced to buy services à la carte.
Larger employers have continued to focus hiring on fulltime roles, and signs of a softening economy seem to have started the pendulum swing away from the seller’s market for talent.
I believe this is turning out to be less of a structural shift and more of a product of this talent market segmentation that may begin to level out if the economy continues to cool in 2023.
So while the headline is probably true, it’s not what I envisioned when I wrote it.
Totally non-biased assessment: C-
The upshot: segmentation is the story.
All in all, I think I could have done worse, but I think we’ll look back on 2022 as a transition year. It remains to be seen what it is a transition to. Were we taking a breath after a transformational two years on the way to a permanent restructuring of the workforce, or will increased employer leverage drive a reversion back toward the mean?
The answer will come down to segmentation. The experience of working for a large employer compared to a small business has been diverging over decades, as smaller employers struggle to offer competitive benefits and compensation and as the talent market has grown ever more competitive.
Now, we’re seeing radically different approaches to talent acquisition and the workplace between organization sizes, and I think that may have some real staying power. And new issues will arise, as pandemic-era remote hires grapple with their workplaces returning to the office; and culture integrations that were already a challenge in mergers and acquisitions will become even hairier.
Employees are wise to understand the broader context of the talent market and how they fit into it: as employee experience continues to radically diverge across companies, we owe it to ourselves to keep a watchful eye on trends, and, most importantly, to understand ourselves and the conditions that enable us to thrive in the workplace.
What energizes and engages one person may alienate another. Of course, there’s always been plenty of diversity in workplace cultures. But now, the fundamentals – literally what it means to be at work — play a bigger role, and now, more than ever, it’s up to us to ensure that we’re well-matched to our organizations and their direction.