Over the past year or so, the forecasted financial downturn has made headlines everywhere and businesses have been tasked with the appropriate prep work to weather any unexpected difficulties. As expected, the world of talent has since started to contract – seen in the high attrition rates, redundancies announced across several sectors and hiring freezes altogether.  Whilst the economic uncertainty hasn’t had the best effects, these periods are historically well-documented and can be properly prepared for. In this article, we’ve totalled ten of the most important trends shaping talent acquisition landscape in 2023 to help share the ways in which business leaders can prepare ahead.  


1. Workforce planning for an economic downturn 

Strategic workforce planning is top of mind and for good reason. Estimates surrounding the impact of 2023’s financial downturn triggered many businesses to respond quickly, prompting hiring freezes, cost cutting, and redundancies. However, based on data from the aftermath of the Great Recession in 2007–2009, it is suggested that companies who take this approach will have only a limited possibility of full recovery once the economy returns to normal. 

The best teams are producing multi-scenario plans to cover off the event spectrum with their finger firmly on the pulse, monitoring market conditions closely. In order to retain the best possible chances of longevity and steer away long-term damage, businesses are urged to embed a robust strategy capable of a quick recovery into hiring once the recession ceases.   


2. The great return to the office  

As with most influential trends in workplace discourse, the Great Return has been predicted a comeback for some time now, with businesses going through transitional changes since the pandemic. In the last year or so, businesses have been shaping and adjusting their workplace policies to suit a hybrid of needs – above all else, flexibility. Many have been tasked with the challenge of producing a ‘destination workplace,’ a place where employees choose to be, rather than need to be. In the next 12 months, we can expect to see a full range of in-person and hybrid models to be on the agenda for businesses with the intention that this will improve collaboration, innovation and creativity.  

Already ahead of the curve, corporate giants such as Apple, Google, and Unilever have already announced their plans for getting staff at least partially back onsite. Others, like investment bank Goldman Sachs, are pushing for a return to full-time in-person work for all employees.  

Still in hot debate, a survey showed that 37% of HR leaders anticipate a shift in working patterns that will require employees to work from the office more often. But at the same time, 48% believe a full return to office would hurt their ability to attract and retain talent. Whether businesses choose to mandate a full RTO or not, retention will be a key indicator of effective decision-making in the year ahead. 


3. Increased internal mobility, upskilling and rise of the boomerang employee 

As businesses shift towards internal mobility, it is becoming increasingly common for “boomerang employees” to return to their former employers. These individuals, who may have previously left in pursuit of new opportunities, now present a valuable pool of candidates for recruiters and hiring managers to consider. Not only do they possess a familiarity with the organisation, but they can also seamlessly transition back into their roles with minimal training required. It is crucial for organizations to recognize the potential of boomerang employees and actively consider them as candidates for open positions.  

In 2023, businesses that want to eradicate high attrition rates, should think about developing an internal mobility strategy, which both creates an accessible source of talent and supports better retention.  


4. Data-driven recruitment strategies – DE&I 

As we move into 2023, achieving inclusive hiring practices is top of mind. In order to effectively evaluate and improve processes in this space, more and more talent acquisition teams are turning to data-driven approaches.  

Where in recent years, DE&I became a key part of talent discourse, this year we’ll see more business turn focus on using data practice to drive efforts to support equity in the workplace. By utilizing demographic data in conjunction with metrics such as pass-through rates and interview feedback, recruiters can identify and address equity gaps in their recruitment funnel. As the importance of diversity, equity, and inclusion in the workplace continues to grow, it is crucial for organizations to adopt this data-driven approach to achieve more inclusive hiring outcomes. 


5. Increased automation and AI of recruitment tasks  

Naturally, in times of economic uncertainty, businesses need to be sure that the tools they invest in will truly save them money in the long run. So, while spending on recruitment automation may increase in 2023, businesses would be wise to spend time calculating the ROI that each tool or software solution can give them before investing.  

Currently, only one in four businesses use automation or AI to support their HR efforts, including recruiting and hiring according to a report by SHRM. This could very well change as more businesses look to cut costs and boost efficiency in the face of recession. 


6. Focus on wellbeing and work-life balance 

As we move into 2023, the subject of employee mental health is becoming increasingly critical for business leaders to address. A study conducted in 2022 found that an alarming 89% of employees reported experiencing burnout at some point in the past year, emphasizing the need for employers to take proactive measures to support their employees’ mental well-being. This can include implementing policies that promote a healthy work-life balance, providing access to mental health resources such as counselling and stress management programs, and creating a culture that encourages open communication and support around mental health. 

Furthermore, as mental health has a direct impact on productivity, employee engagement and retention, employers should consider incorporating mental health support as a key element of their Employee Value Proposition (EVP) strategy. This will not only improve the well-being of employees but also enhance organizational performance and competitiveness in the long run. 


7. Recruitment recognised as a strategic role  

Predicative insights from a 2019 LinkedIn report suggested that the role of the recruiter would transition from sales-focused to business-oriented over the next few years. Fast-forward to 2023 and more of the administrative parts of the recruitment process are automated and the role of the recruiter has undergone a significant shift. With the rise of automation and outsourcing of repetitive, administrative tasks, recruiters are now being called upon to play a more strategic role in talent acquisition. This includes utilizing market knowledge and perspective, problem-solving, and aligning recruitment efforts with overall business goals.  

Moreover, in the face of high attrition rates and fierce competition for top candidates, recruitment is increasingly being seen as a strategic function within organisations, with recruiters expected to play a key role in transforming talent acquisition processes.  


8. Ongoing talent shortage will dominate business decision-making 

The ongoing talent shortage will continue to dominate business decision-making in hiring in the UK. According to a recent survey by the Recruitment and Employment Confederation (REC), nearly two-thirds of UK employers have reported difficulties in filling job vacancies in 2022.  

The situation is particularly acute in certain sectors such as IT and Engineering, where the skills gap is particularly wide. The shortages have led to increased competition for talent and higher salaries. A report by the Office for National Statistics (ONS) found that average weekly earnings for permanent employees in the UK increased by 4.5% in 2022, the fastest rate of growth in over a decade.  

As a result, businesses are having to be more strategic in their hiring, focusing on recruiting and developing the skills they need to stay competitive. This is likely to lead to increased investment in training and development programs, as well as a greater emphasis on employee retention and engagement. Additionally, businesses will likely also have to be more creative in their recruitment efforts, using social media, employee referrals, and other tools to reach potential candidates. 


9. Web 3.0 technologies will transform all aspects of people’s lives  

Artificial intelligence and the Internet of Things, more and more companies are turning to new technology to streamline and improve their hiring process. 

According to a recent survey conducted by the Society for Human Resource Management (SHRM), over half of organizations have reported using AI in their recruitment process, such as chatbots, to assist with screening and scheduling interviews. Additionally, a significant number of organizations are also using virtual reality for interviewing and assessing candidates, and language models such as ChatGPT to make the job adverts and related collateral sleeker and inviting. 

Businesses are to focus more on recruiting and developing employees with the skills required to work with these new technologies to better support these new tech adoptions. This could mean recruiting employees with expertise in areas such as data science, blockchain, and AI. As new forms of collaboration and communication become possible, businesses will also need to adapt their recruitment and retention strategies to take advantage of these new opportunities. In order to stay competitive, companies will have to embrace new technologies and the skills they require to thrive in this new era in tech innovation. 


10. Pay transparency will become the new normal  

Pay transparency will continue to be a key component of change in the world of work. According to a survey by the Chartered Institute of Personnel and Development (CIPD) conducted in 2022, more than 60% of UK employers have introduced pay transparency, and more businesses are expected to follow this trend in 2023.  

Another study by the CIPD found that businesses with more transparent pay practices had considerably lower turnover rates among their employees, highlighting the business case further for pay transparency. As part of the wider discourse on equity and disparity in the workplace, CIPD also found that businesses with greater pay transparency have a more engaged workforce, with employees being more likely to recommend their employer to friends and family.  

Arrows Group have recently signed up to the Earn Your Worth initiative where we no longer ask our candidates to divulge their salary history, in a bid to cut pay gaps and improve equity across the creative industries. We believe asking for salary history perpetuates gender, ethnicity, sexuality, and disability inequality; and allows for unconscious bias to take control. There is clear evidence which indicates that when making this simple, low-cost change to the hiring process, it can positively impact pay inequality. This will be especially important as businesses increasingly compete for top talent in a tight labour market and will be seen to attract, retain and engage employees. 


If you’d like to talk about your talent acquisition strategies, regardless of whether you’re looking to hire now, or in the near future, then reach out to us on talk@arrowsgroup.com.  


In the first of a 3-part series on the challenges currently facing CTOs and software companies, Charlie Sell, MD for Solutions & Consultancy, discusses how the increasing pressure to drive productivity and ROI without further investment raises the prospect of technical debt and all that comes with it.

As CTO face calls from founders, shareholders or investors to deliver the same quality of product, at greater speed with less investment and resource, something has to give.

If engineers are expected to work harder, work faster, be more productive or cut corners, it comes at a cost, including the risk of damage developer morale. How do CTOs strike the right balance to ensure the company doesn’t strike out?

What’s different now?

Pressure to release products or updates is nothing new. The core driver in recent years has been speed to market, and most companies have been given funding to invest in engineering capability. In fact most of the hiring that’s happened within our clients has been within the engineering teams.

However in the current climate, resource has been temporarily put on hold. Some are taking a cautious approach, saying “Stop hiring right now, we don’t know what’s going to happen in the market”. Others are saying “We were going to commit £5 million to next year’s R&D budget, but now it’s only going to be £1m”.

The challenge now is that founders and investors still want what they’ve always wanted; Speed, quality and profit, but from lower levels of investment. For many CTOs, that brings technical debt – the often intentional cutting of corners or acceptance that your product will launch unfinished – into their strategic decision making.

The dangers of technical debt

Many CTOs are now having to make their Board aware of the benefits and costs of technical debt, and pose questions like “Are we willing to accept that the product will be 80% complete?”

For some companies, technical debt is part of the long-term model or, with hardware related companies for example, the impact may take months or years to play out. But for many, particularly ecommerce, the consequences hit faster and harder than they expect.

For those companies, it may be possible to cut corners in other business functions – to be understaffed in human resources or even in sales teams – without , but where technology serves a fast-paced consumer market, cutting corners on tech is a delicate balancing act.

With online reviews an increasingly important factor in consumer choices, the impact of a product falling short of consumer expectations can become evident immediately.

Yet even when you are aware of the risks, releasing software that’s part-finished may still be the right strategic decision if it enables you to get to market before the competition. Many of our SaaS clients have people tied in to monthly or yearly subscriptions, so it may be preferable to keep them tied in. There’s no right or wrong answer when it comes to technical debt, only that it must be a strategic choice.

Something that must be a part of that strategy is communication – both upwards and downwards – about the rationale behind accepting a degree of technical debt. If the need and tolerance for technical debt isn’t explained to engineering teams, morale can quickly drop.

Engineers often work out of pride for their product and stay with a company because they believe in what they’re developing. When pressure to deliver begins to disrupt their work-life balance or there’s a change in the culture, engineers can get burnt out, stop believing in the value of the product or leave. Individually, each of those are damaging, but combined, they can be terminal for a company.


A recipe for success

Economic uncertainty has become another factor in the technical debt equation, but it won’t last forever and the challenge of technical debt will still be there, albeit with a different lens. That means that every business needs an understanding of that equation and an effective response.

One solution companies try is outsourcing, and while it can work in specific circumstances (I’ll be discussing the pros and cons in part 2 of this series) and it helps to reduce cost, it’s almost impossible to get the same quality. Offshore developer teams can be just as skilled as your in-house team, but time differences and cultural differences are difficult barriers to overcome.

The only approach to the challenge of technical debt that really works is good communication. For the company to take a balanced view of the benefits and risks, it’s crucial that everyone gets an appreciation of why you may be willing to accept technical debt, and quite how much you can take on.

In the best companies, the engineering teams are part of the conversation. The CTO will discuss the realities they face and agree the compromises they are willing to accept. Then, with their buy-in secured, it can be discussed at the business level. To have these conversations, CTOs must wear both hats, and have an understanding of the financial implications as well as the technical detail.

Technical debt is a hot topic and it’s certainly not going away. In this period of economic turbulence, the most effective leaders will be those who embrace the difficult conversations and articulate the challenges to both the business and engineering sides of the company.

Our annual survey is back, and we’re looking to make it our most comprehensive yet! The 2023 Tech Industries Census (formerly our Salary Survey), will explore careers, salaries and workplace trends, enabling us to help shape the future of the workplace.

We’d love to get your input on a wide range of topics, helping to enable data-led action towards a more equitable future for all including:

➡️ What is your worth?

➡️ Are you being paid fairly?

➡️ Have pay gaps improved?

➡️ What is important to your career aspirations?

➡️ Is international relocation something you’re now open to exploring?

➡️ Has representation increased?

The census only takes a few minutes to complete, and respondents will automatically be entered into a prize draw to WIN £500 cash, in addition to receiving an exclusive copy of the findings!

Take part in the census here

Kate Bergman, Director at Arrow’s Group Global, has seen the tech recruitment world rise, fall and rise again, and is upbeat about the year ahead for the Tech Industries.

“The last twenty years have seen unparalleled technological transformation across every sector, and while the current economic outlook is by all accounts bleak, we’re still seeing opportunities everywhere, for those nimble enough to take advantage of them.”

Despite the anxiety of downturns, and the dramatic cuts at Silicon Valley at the back end of last year, the future of work is undoubtedly digital, and will need to be delivered by skilled technologists. With over 600,000 unfilled digital and tech roles in the UK alone, there is reason for the sector to remain optimistic.

So, what can we learn from the current situation in the sector?

Businesses are having to be more agile, adapting their business models and seeking new revenue streams. Those who are nimble and willing to innovate will continue to build brands and sell products. The good news is that investment in the tech sector is still there. UK artificial intelligence (AI) startups were forecast to attract £7.5bn in investment in 2022, in a sign that the sector remained strong amid turbulent macroeconomic conditions. Entrepreneur network Tech Nation found that the AI sector took 14% of all UK VC investment. Fintech remains the UK’s dominant sector for funding.

Digital advertising has fuelled the web for the best part of two decades, however, you only have to look at emerging platforms such as TikTok to see that this is unlikely to continue. This year, TikTok ad revenues are projected to edge past $5 billion, representing 139.9% growth YoY, making up 2% of the total US digital ad market spend. By 2025, the platform is projected to surpass 1 billion users worldwide presenting great opportunities to reach a global audience, easily and effectively.

We’ve also seen a raft of subscription models that have been transforming the business landscape.  By 2023, it’s estimated that 53% of software companies will embrace the subscription model. Faced with the opportunity to grow revenues up to 5x-8x faster by adopting a subscription model approach, many businesses are moving away from one-off payments to create ‘forever transactions’ with loyal repeat customers.

It’s important to build sustainable business models that allow scale where appropriate. The cuts across of Silicon Valley are not all down to poor planning, but Patrick Collison at Stripe, sent an email explaining why they had to restructure, cutting 1,000 jobs, taking responsibility for over-investing. Even if you feel your business is resilient enough or has performed well in the past, it’s important to assess every aspect of your operations to ensure they are working as you’d like, and if not, create a plan B for if the market worsens.

Recessions often induce a wave of re-structuring or redistribution of talent, as businesses optimise their budgets when times get tough, and although unsettling, this shouldn’t be viewed as wholly negative for the sector. While big tech companies may no longer need as many young innovators, the SMEs of the UK are in dire need of their expertise.

For opportunistic businesses, and those looking to scale, they now have the opportunity to hire highly experienced workers who have been made redundant, or who are not getting the support they need in their current role – but they have to act quickly. Paradoxically, layoffs can also be good news for the employees. Tech professionals who are part of these layoffs will likely end up on one of two paths: back with another large tech firm in a similar role, or with a smaller company where they can put their world-class skills to the test, and therefore have greater impact.

I believe that we’re only at the beginning of this transformation journey. Many industries are still going through digital transformation and will continue to invest large sums into their tech and digital infrastructure, and with over half a million unfilled vacancies, talented engineers and consultants will always be in demand. Whilst I don’t underestimate the challenges that the sector faces, there are still huge opportunities for talent and businesses alike.

By Kate Bergman, Director.