It’s getting boring to say that “this year has been a crazy year” – because honestly, since 2020, it feels like every year has been more turbulent than the previous one.
Nevertheless, it still calls for a breakdown of the main trends that we saw throughout the year. Without further ado, let’s have a look at the top seven developments of 2023:
2023 saw a continuation of the previous year’s trend with the tech industry experiencing more than 240,000 job losses, a 50% increase from the prior year.
Major companies like Google, Amazon, and Microsoft, along with startups across sectors, announced significant cutbacks.
It wasn’t just that there were more layoffs – according to the layoff tracker, Layoffs.fyi, we saw 1,064 companies laying off 164,969 employees in 2022 and 1,179 laying off 261,847 in 2023. So, the number of companies hasn’t grown so much as the number of people who lost jobs.
The reasons range from economic caution to a shift from growth to efficiency. The layoffs have profound impacts on innovation, company pressures, and the availability of talent for growing businesses.
We may not see the end of it yet. Layoffs are anticipated by four of 10 companies going into 2024 according to a ResumeBuilder.com survey.
2. Job turbulence
In 2023, the job market across the UK, US, and the APAC region showcased distinct trends reflecting their unique economic landscapes, technological advancements, and employment policies. In short, 2023 was a volatile year.
The US saw a mixed bag of employment changes over the year. According to the US Bureau of Labor Statistics, there was a robust increase in total nonfarm employment, with significant contributions from sectors like leisure and hospitality, health care, and professional and business services. Specific areas like retail trade and transportation also showed growth, indicating a recovering and adaptive economy.
Also according to BLS, manufacturing and construction sectors demonstrated modest growth, signifying a sustained demand for goods and infrastructure development.
Meanwhile, the information sector experienced fluctuations, reflecting the dynamic nature of the tech industry and its impact on job numbers.
The UK experienced a decline in job vacancies, falling for the 17th consecutive period according to the UK’s Office for National Statistics (ONS), yet still above pre-pandemic levels.
This indicates a cooling job market but with a sustained demand for labor higher than historical averages.
The UK saw significant numbers of working days lost due to labor disputes, particularly in the health and social work sector, indicating industrial relations strains. Despite this, the overall number of workforce jobs reached a record high, suggesting an expanding labor market.
The APAC region solidified its position as a global service leader, with countries like India, China, and Malaysia offering cost-effective and skilled labor.
However, hiring witnessed a slowdown in major markets such as Singapore and India, indicating a more cautious approach to employment amidst economic uncertainties, according to the workforce consultancy group Resource Solutions.
The group also noted significant shifts towards a tech-driven economy, formal upskilling programs, and a surge in ESG-related job openings
It continues to be an unpredictable job market for many around the globe – and, again, 2024 will likely see the same trends as 2023.
3. Salary trends
In 2023, the conversation around salaries evolved significantly, reflecting broader economic trends, legislative changes, and shifting cultural attitudes towards pay transparency and equity.
The year saw significant salary increases across industries in the United States, according to the Conference Board’s US Salary Increase Budgets 2023-2024 – with an average increase of 4.4% from 2022. That’s expected to continue into 2024, with increases predicted to be an average of 4.1% from 2023.
Why? The report points to talent shortages, inflation, and tech developments as major contributors.
Meanwhile, the UK saw a notable 7.3% annual growth in regular pay according to the UK’s Office for National Statistics, showing a strong but slowing wage increase trend.
This especially was seen in the public sector, a sign of government moves to retain and attract new talent in this unpredictable environment.
Salary transparency is also a thing. Notably, the UK government launched a pilot project aimed at increasing pay transparency to break down barriers for women and other underrepresented groups. It’s a step towards addressing overall salary equity, including the gender pay gap.
Meanwhile, back in the US, a number of states including California, Colorado and New York have introduced salary transparency laws – there’s more, of course. Plus, a handful of municipalities are doing the same. More legislations are coming in 2024 (Hawaii) and 2025 (Illinois). It’s likely a sign of things to come.
How do people feel about that? It’s generally positive, according to a ZipJob study – 65% of respondents say they would like to ask, or have already asked, about a colleague’s salary.
4. The four-day work week
The year also saw increased experimentation with the four-day work week.
Various companies across the US, Canada, Australia, and other countries participated in six-month-long pilot programs organized by 4 Day Week Global – with a comprehensive report from the group citing increases in work efficiency and work-life balance as a result of the project.
Governments are also backing pilot projects, including at the state level (with more than 60 UK companies trialing it to the end of 2022) and the provincial level (including Ontario’s Bill 55 – Four-Day Work Week Act).
This kind of thing will continue as companies (and employees) experiment with alternative schedules. The death knell of the 9-to-5 system has long been predicted – and we’re seeing it unfold in real time.
5. Growing skills and talent gaps
The year also saw growing skills and talent gaps across industries, thanks to tech developments, evolving work, and educational misalignments.
Meanwhile, a report from Wiley University in Texas noted an increase in employers reporting skills gaps from 55% in 2021 to 69% in 2023. It also found that one in four (26%) say they’re unable to hire qualified candidates due to skills gaps.
A Harvard Business School report emphasized the urgent need for US-based employers to actively partner with local community colleges to close the middle skills gap. The nature of middle-skills jobs is evolving faster than educational institutions can adapt their curriculums, leading to a significant disconnect.
Another study from DeVry University in Illinois took a deep dive into the state of upskilling and the barriers to professional development. It found that 97% of workers and 96% of employers say that upskilling is essential or nice to have – but just one in three workers say employers are living up to their responsibility to upskill them for the future workplace.
This means greater emphasis on on-the-job training and L&D initiatives going into 2024 – and higher value being placed on workers who are agile and willing to learn (and roll with the punches, too).
6. Increased stress for workers
Due to the economy and layoffs – and continued emphasis on productivity for those “left behind” in the workplace with an increased burden on maintaining productivity – workplace stress was a huge factor in 2023.
Stress, burnout, loneliness, and anxiousness have skyrocketed, according to Calm’s Workplace Mental Health Trends Report: The Future of Work.
Also, the ongoing seesaw between working from home – with its added emphasis on output and productivity – and returning to the office continues to be a factor in 2023, again exacerbating the mental well-being of workers.
The hybrid work model continues as a growing trend, and it’s worth watching how this develops into 2024 as a potential mitigator for stress, as well as mental health support for teams.
Our survey report from 2022 on mental health in the workplace also reveals a lot about what you can do as an employer in that area.
7. The explosion of AI
And finally – the entrance of artificial intelligence into everyday society had huge impacts, especially in the workplace. A global survey report by McKinsey titled The state of AI in 2023: Generative AI’s breakout year noted that 79% of workers have had some exposure to generative AI in their workplace, with 22% adopting it in their workflows.
Plus, two out of five (40%) organizations, meanwhile, planned increased AI investment going forward.
And we really hate to come full circle to the first highlight at the top, but this may also impact job security with 44% of employers saying AI will likely replace employees in 2024 according to a ResumeBuilder.com survey.
Meanwhile, in December 2023, Workable released a survey report on AI in Hiring and Work that found 62.5% of hiring managers utilized AI tools in their hiring processes over the past year. Nine out of 10 (89.6%) found they were able to hire more quickly, and 85.3% said they saved time and money invested in the hiring process.
Despite all the doom and gloom, there’s some interesting opportunities for optimism here.
We don’t see AI going anywhere soon – Workable has incorporated the technology into its own software with huge benefits. Watch for more developments in this area in 2024.
Meanwhile, what did 2023 look like for you and what’s in store for 2024? Share your own workplace story with us and we’ll work with you to get it published!