In the months leading up to 2023, recruiters across the country predicted this would be a year fraught with challenges and surprises. Throughout 2022, we witnessed mass global layoffs across the tech sector and stark increases in the cost of living throughout the UK. However, perhaps now it is time to look at the sector with a fresh perspective – is it all doom and gloom, or is this a recalibration as a result of the changes seen during the COVID years?

With the UK leading the way, many firms that hired too many people during the pandemic are now seeking to cut back. While this may seem like bad news for job seekers, it could be a positive sign that the job market is returning to some semblance of normality. While the prospect of unemployment is daunting, this recalibration is necessary for the long-term health and sustainability of the job market. Over the past few years, particularly during Covid, many tech companies made volume, and some would argue, hasty hiring decisions in reaction to the sudden Covid-enforced movement to on-line.

This fueled notably-high tech company valuations and a flow of VC capital – times were good for a number for the tech industry. As the world returned to pre-Covid levels of in-person interaction, companies were forced to reassess and make changes as necessary. Through the reassessment of staffing needs, tech companies are ensuring that they have the right people in the right positions to meet their long-term goals, benefitting not only the companies themselves, but also the employees who remain. By adjusting their team sizes, companies can provide their employees with a greater sense of security, stability, and career progression opportunities.

However, it undoubtedly remains a difficult time for many across the UK, and this extends far past business owners making tough decisions. Employees are at the mercy of a cost of living crisis that is yet to show relent, and in many cases, salaries that are not in keeping with these developments. Our research at the end of last year found that despite the fact that 100% of respondents believed the UK would enter a recession in 2023, only 22% of the workforce received a pay rise to reflect the testing economic climate – yet 94% of respondents believe that they should get paid more this year to meet these challenges.

Not only was there a demand for increased salaries, other workforce trends that appeared from the catalyst that was COVID-19 remain in 2023. It has become increasingly clear that employee demands are becoming more and more disruptive to the traditional working model, from flexible hours to hybrid working and a greater focus on work-life balance and purpose – and employers are listening.

Our survey revealed that for many workers, workplace flexibility seemed to be more or equally crucial. Only 6% of respondents claimed they had returned to the office full-time, while 61% of those polled said they were using hybrid work, stopping by the office two or three times each week. 11% of people who work full-time remotely do so while living in the same nation as their employer, and 11% do so while living in a different country.

Hybrid working is no longer a trendy term occasionally used by human resources professionals as of mid-2023. It is clear from employee demand that the concept of working in a hybrid approach has replaced the old standard for the workplace, and when managed correctly, hybrid working can and does yiled positive results such as increased job satisfaction and increased productivity. Additionally, there is likely to be less absenteeism, less time spent travelling, and lower additional costs of going into the office.

Additionally, it has proven to be beneficial for those who balance their profession with taking care of young children or elderly relatives – a role which statistics show is more regularly undertaken by women verus their male counterparts. Whilst some major financial services organisations in London City are calling for a return to 5 days in the office – this remains the exception – and the majority of our clients and candidates are working on a hybrid working basis and we expect this to continue throughout 2023.

Another clear benefit of the hybrid working model which continues in 2023 is the decentralisation of talent and a wider talent pool for employers to access. Whilst companies have access to talent pools that, historically, have been based on proximity to the employer’s place of business, a lot of people now prefer to relocate outside of bigger cities for a number of reasons including financial savings, work-life balance etc. There is little doubt that this trend will persist into late 2023.

Early in 2023, many businesses in the UK and elsewhere tried out the four-day work week, a trend that has garnered much attention and has demonstrated some benefits. Although a company’s in-person culture is important, many candidates believe that recognition of each employee’s unique needs approach is important when assessing prospects and determining whether to stay in their current workplace. Another buzzword that gained traction in early 2023 was quiet-quitting, although as the year has progressed it is becoming increasingly clear that this trend is not beneficial to any parties involved, and is on its way out.

2023 so far has demonstrated that whilst the market continues to face challenging  geo-political headwinds, for the most part,  the recruitment industry is and will continue to be employee-driven. Employees will seek companies who recognise the current difficult period the workforce is going through, whether by financial means or other benefits, as the cost of living crunch continues. Given the changes in the labour force, people today want greater flexibility in their working hours and schedules. To accommodate this, workplaces must change rapidly or risk losing the greatest workers. Additionally the human element of workplaces is more important now than ever as AI becomes increasingly sophisticated, with many fearing for their jobs. Employers must assure their employees of their worth. If they can balance the needs of their workers, employers will be sure to secure and retain the best talent.