Get paid up to $18,750 for your referral to ExtensisHR!   Start Referral Close

2023 Hiring Trends SMBs Should Expect This Year

Quick look: Almost half of employees plan to job-hunt, and 92% of employers plan to hire this year. To remain competitive, business leaders must stay on the pulse of 2023 hiring trends. Here are 7 developments expected to hit the industry and how a PEO can help SMBs make the most of them.

Talent acquisition has undergone considerable changes in just a few years, and that’s expected to continue in 2023 as the tight labor market persists.

According to consulting firm Robert Half, 46% of employees plan to look for a new job this year. This figure is up 41% from June 2022. The survey also revealed the following workers are most likely to change their employment in 2023:

Echoing this, job board website Monster reports that 92% of employers plan to hire this year. Recruiting fresh talent is an evergreen business priority, and especially during the ongoing workforce shift, small- and medium-sized business (SMB) leaders must remain aware of what today’s top talent wants and how to stay compliant with new legislation.

7 hiring trends in 2023

The last several years have seen no shortage of recruiting developments. Here are seven hiring trends SMBs should consider dedicating resources to:

1. Beyond-basic benefits

Salary will always be important to job seekers, but employers should note that 60% of today’s talent feels that benefits are second only to salary in importance, according to research from

Organizations are predicted to focus on offering more robust benefits packages to accommodate this trend and attract and retain employees. In particular, non-traditional benefits will gain traction as more workers begin to expect plans like family-forming supportfinancial wellness programs, pet insurancemental health coverage, 401(k) matching, parental leave, and more.

It can be expensive, yet worthwhile, for SMBs to offer these benefits to their staff. However, partnering with a professional employer organization (PEO) to gain access to large-group plan pricing may be a way for small businesses to stay competitive without breaking the bank.

2. Professional development opportunities

Employees’ desire to continually learn and grow isn’t new, but it’s increasingly becoming a priority for employers.

Providing ample professional development pathways is mutually beneficial for workers and their companies. Learning and development programs allow for internal mobility and help staff feel more engaged and fulfilled.

For SMBs, a comprehensive learning and development strategy, including a focus on reskilling and upskilling, shows an organization’s commitment to investing in its staff, can boost employee retention rates, and creates more skilled teams.

Employers should remember that developing hard and soft skills is important. For instance, a manager could be a power user of multiple technologies but, without proper time management skills, could create bottlenecks and hinder organizational success.

3. Hybrid work environments

Unsurprisingly, a flexible workplace will remain relevant in 2023. In fact, Gartner predicts that flexibility will even reach frontline workers this year through providing paid leave and more control over work schedules, stability, and the type and amount of work assignments.

Employers should invest in mobile-first technology to accommodate a dispersed workforce and ensure their staff can complete tasks no matter where they work or what device they use.

Business leaders must also remain aware of compliance concerns regarding a remote workforce. Potential issues include:

  • Wage laws
  • Taxes (employees could live and work in different states each with their own tax laws)
  • Workplace safety (workers’ compensation is still applicable for those who work from home)
  • Cybersecurity risks
  • Pay transparency

4. Pay transparency

More states and areas have pay transparency laws than ever before, and employers must keep them on their radar as they navigate the new year and beyond.

While business leaders may be aware of Colorado’s and New York City’s existing statutes, more states are following suit in 2023, including California, Rhode Island, and Washington.

Pay transparency laws differ by each state and region. Still, they typically require disclosing pay scale information to job candidates and current employees for their current jobs or those they are applying for.

As these regulations become more widespread, employers should note that even if they aren’t headquartered in a specific state or city, pay transparency rules still apply to them. For instance, New York City’s mandates apply not only to organizations based there but to any position in which a resident of New York City can be hired.

5. Leveraging boomerang employees

Not every new hire is brand new to an organization. Indeed, there is a wave of boomerang employees who leave a company but later choose to return.

There are different types of boomerang employees, too. Most recently there’s been a wave of retirees returning to the workforce due to economic instability or simply missing working and socializing.

Other boomerang employees may have left the company to pursue new opportunities only to realize the grass isn’t always greener on the other side. A LinkedIn report claims that these workers accounted for 4.3% of hires in 2021, up from 3.9% in 2021.

Regardless of their source, many boomerang employees bring with them proven skillsets that can foster an organization’s institutional knowledge.

6. Proactive candidate outreach

Gone are the days of waiting for the perfect candidate to apply for your open role. While previously, recruiters mainly only proactively communicated with C-suite candidates, this type of outreach is becoming more commonplace for all job levels. A LinkedIn survey found that 85% of recruiters believe engaging passive candidates is becoming more important.

SMBs may consider partnering with a PEO to aid in this proactive outreach and produce high-quality candidates that may not have been on a business’s radar otherwise. For instance, ExtensisHR’s 45-day recruiting solution helps companies find passive and proactive candidates through AI-led sourcing and sponsored job ads.

7. Keeping an eye on AI

Another topic slated to remain in the headlines this year is legislation addressing the bias that can occur using employment decision-making tools that utilize artificial intelligence (AI). These programs help organizations decide if a job candidate is a good fit for a role or if a current worker is eligible for promotion. But unfortunately, some of these tools use processes that have yet to be coded to remove bias and may isolate certain people.

This bias has caught states’, cities’, and the federal government’s attention. In April 2023, New York City plans to require a bias audit of these automated tools to be conducted before they are used. Further, candidates and employees residing within the city must be informed of the use of these programs and the job qualifications and characteristics they will measure.

On a national level, the U.S. Equal Employment Opportunity Commission (EEOC) has introduced an initiative to ensure that AI-based employment tools comply with federal civil rights laws.

The help you need to conquer 2023 hiring trends

You’re not alone if recent recruiting best practices have left you feeling overwhelmed. Many SMB leaders want to do everything they can to attract and retain talent and ensure compliance but lack the time or resources to do so.

That’s where a PEO can make a big difference. Partnering with a PEO simplifies every aspect of your organization’s HR. Consider a PEO, like ExtensisHR, that provides:

  • Full-cycle recruiting services (at no additional charge) that include:
    • Unlimited 30-minute phone consultations with a recruiting specialist
    • Sourcing for most staff-level positions
    • Job advertisement creation
    • Salary surveys
    • Skills assessments
    • Offer letter consultations
    • And more
  • A DEI Dashboard tool that can provide real-time internal pay audit data
  • Risk and compliance expertise designed to keep your ever-changing workforce compliant
  • Comprehensive tax and payroll services to simplify employing remote workers
  • A mobile-first Work Anywhere® platform so your staff can securely manage critical tasks from anywhere, at any time

Recruiting the best employees can be easier than you thought possible. Contact the experts at ExtensisHR to get started today.

Our expert advice, direct to your inbox.