Four hiring trends in 2023 + four predictions for 2024

 

Market trends in 2023 

1. The great slowdown

When this year began, there seemed a disconnect between the gloomy outlook forecast by media and the amount of work we were engaged in with clients. Despite what pundits were reporting, the financial services industry labour market was busy in the first half of 2023.

Things changed around June/ July when activity slowed and redundancy programs rolled through the bigger financial institutions.  We saw projects in specific industries begin to stall because of uncertainty, and firms begin to take a closer look at hiring spend across all role types.

As we wind up 2023, this shift has caused employers to be more hesitant. The aggressive hiring environment of 2022 has now been replaced by a slower hiring process and much more layers of approval. Partly as a correction to high turnover rates since the start of the pandemic, hirers are more cautious about securing the right candidate and are doing so with less confidence around decision-making. It makes for a more inefficient hiring process as hirers are meeting more candidates, conducting more rounds of interviews and involving more people in the process. As a result of this more drawn-out process, roles can change, be pulled, or employers lose out on preferred candidates to faster processes. We’ve seen role profiles change during campaigns as budgets shrink, downgrading requirements in experience with plans to switch focus to  in-role development rather than new talent acquisition.

Our advice to employers is that while the right fit is essential, especially as many organisations rebuild their culture after the disruption and disconnection of recent years, the old adage “time kills deals” holds true as good candidates will be snapped up fast in any market.

 

2. Internal development 

As those role profiles were downgraded to lower salaries and experiences, firms had to re-prioritise professional training and development. Firms began to build their team members’ skills where they couldn’t find or couldn’t afford new recruits. The shift back to training up certain skill sets in-house was made easier by teams coming back together in the office and is a major lever for retention, especially amongst more junior employees.

 

3. Hiring got personal

2023 also saw businesses take hiring into their own hands, partly driven by dwindling budgets. Employers turned to internal resources, activating their teams to recruit by rewarding referrals. Placements from employee referrals increased – from overseas offices, friends and other connections.

The Australian market continues to be strongly network driven. Hirers are often familiar with candidates or have overlapping connections.

Our advice to both employers and candidates is to prioritise and invest in your networks. Don’t wait to connect until you have an urgent need, keep in touch with resources like the Keegan Adams team to access market information.

 

4. Demand for diversity

We’ve seen an increase in gender preferences for roles as businesses attempt to improve the diversity of their workforce. Businesses and HR departments are re-focused on improving diversity, equity and inclusion and increasing their efforts for the overall benefit of their business. Wellbeing programs are also a current focus, with Employee Value Propositions in the spotlight. For many established Australian businesses, these are well developed with hybrid working models and benefits such as parental leave already well-structured and successful. Diversity, in contrast, is still a puzzle to be solved.

The focus currently is still very much on gender diversity, but we predict other initiatives will follow.

 

What to expect in 2024 

1. The young & the restless

Despite the current slowdown, candidates in the first five years of their career are still moving roles and will continue to do so into next year. They are easy to identify thanks to their prevalence on social platforms including LinkedIn. (Where previously candidates might not have had a LinkedIn profile until they reached management, most younger candidates have a profile from their first day on the job – or before).

In the earlier stages of their career, under 30s are willing to move more frequently to secure salary increases and promotions, with job security a lower priority. They see their career path as a fluid river, not a straight road, with diverse experience across different businesses viewed as  a positive. While 2021-22 saw unusual salary increases and offers, 2023 saw meagre salary increases and bonuses across a large part of the industry. Despite diminished bonuses across the board, expectations of strong rewards will push many to jump again next year.

 

2. More demand for ESG and wealth

2023 saw a surge in demand for ESG and private debt talent that will continue strongly into 2024. ESG qualifications and experience are in short supply and hirers don’t feel confident in their understanding of the requirements thanks to the infancy of the sector domestically. A shortage of supply has employers looking at overseas markets, with increased openness to business sponsorships.

Both shortages will also see the 2023 trend for internal development continue into the new year: where businesses can’t secure the talent in market, they will look to grow it in-house.

 

3. Risk at risk?

Across all financial services sectors, risk and compliance had an interesting year this year, with major banks pushing much remediation and AML/KYC work overseas, sloughing off hundreds of contractors in the process. We will see more of these projects wound down, at least onshore, especially after regulators ruled favourably on overseas outsourcing. Some in these roles are moving already, a trend that will pick up in coming months. But most are in no rush as the move from contractor to permanent may hold a drop in pay, especially as the market is flooded with this skill set.

It’s not all bad news though: the largest firms are seeing the volumes of work drop off, but it is flowing down to smaller banks and more complex cases. And risk and compliance burdens will continue to grow, so those that can pivot to the new skills requirements will have plenty of options.

 

4. Quiet quitting replaced by quiet optimism

Quiet quitting had a moment in early 2023, but as teams came back together in person and felt more connected, those lone ships leaning out at home largely have been righted. As 2023 winds up we see that many people either found they did want to be in their roles or made necessary moves. The result is that there isn’t much quiet quitting evident anymore.

 

A final word

2023 saw some stability return and pace slow after several frantic years reeling in response to the pandemic’s impact on our lives and businesses. People are more rested and refreshed than they have been, looking ahead with enthusiasm rather than trepidation.

As the industry looks to 2024 and despite geopolitical volatility, market sentiment is one of relief that we appear to have bypassed a potential economic crisis. We expect there will still be some breath holding as interest rates stay high and the remaining fallout on mortgages plays out, but there is also a sense of quiet optimism. Large jumps in salaries and bonuses look unlikely as businesses continue to act conservatively but overall, we believe the Australian financial services industry will continue to be a good place to be.

Finally, a heartfelt thank you to our clients for putting your trust in us. We have gained so much satisfaction from helping steer you through the ever-changing labour market, whether we’ve filled positions for you or helped place you in your next great role. The team and I wish you a wonderfully relaxing break over summer and look forward to working with you again in 2024.

Claire Tate