Are we facing a crisis? The employer vs. employee market. 2023 in a nutshell.

The year 2023 brought with it for each of us a variety of experiences in the Polish labor market, depending on the industry we work in. In order to better understand the situation, Nicole Tomanek – our Head of People & Culture – spoke with Barbara Kowalewska, CEO at IT Leaders and HR Business Consultant and CEO at Talent Solution, a specialist in recruitment in the IT industry and beyond.

We conjugate crisis by all cases but it is worth putting data on this situation. And it makes it clear that you can’t really put either group, either the employee or the employer, at an advantage today,” says Barbara.

Unemployment: Record low rates

Unemployment is at a record low in 2023, according to a Eurostat survey, where Poland ranks among the EU leaders alongside Malta and the Czech Republic. According to the Central Statistical Office, the nationwide unemployment rate is just 5%. Compared to the last crisis a decade ago, where the unemployment rate was 13%, the current situation is much more stable. Over the past decade, Poland has benefited from European Union subsidies, which has translated into the development of digitization. This trend, also supported by the era of digitization, is prompting companies to invest in new solutions.

Crisis or market transformation?

The question of whether the current situation is a crisis or simply changes in the labor market remains open. Barbara stresses that today it is difficult to say unequivocally whether employers or employees are better off. In recent years, the labor market has undergone significant transformations.

Boom in 2020

During the pandemic, especially in 2020, there was a noticeable boom in IT and other industries, which began to digitize intensively. The shift from offline to online work resulted in increased hiring of specialists, especially in the IT industry, where the demand for experts was huge. It is noteworthy that during the boom, companies hired specialists in stock, preparing for possible orders. This caused a lot of competition between companies for the best specialists.

Changes in the labor market situation after the outbreak of war in Ukraine in 2022

The beginning of 2022 was marked by the outbreak of war in Ukraine, which affected the situation in the Polish labor market. Although projects continued to be implemented, uncertainty began to shape the market. Funds, mainly directed at development, were cut, which affected the dynamics of some sectors.

Rational approach to hiring

In 2022, companies began to take a more rational approach to the hiring process. Rising inflation, energy and fuel costs have caused the cost of doing business to rise significantly. Companies in various industries, both IT and non-IT, have also experienced pressure for employee raises. As a result, we do not have a clear-cut employer or employee market, and the situation is beginning to normalize.

Overproduction of recruitment in the IT industry

In 2022, the IT industry enjoyed a relentless demand for programmers, generating impacts on many other sectors of the economy. However, an oversupply of recruits was evident, and recruiters had to step up their efforts to find the right jobs for candidates. The normalization of the market has prompted a more proactive approach to the job search, forcing recruiters to take more advanced measures than before.

Normalization vs. changing attitudes

Normalization of the labor market situation did not mean crisis or unemployment, but it did mark a change in attitudes and approaches. Recruiters and candidates had to adjust to the new reality, where the recruitment process required more commitment and diligence. Instead of excessive acceleration, it now became crucial to actively participate in the job search, create professional resumes and take concrete steps toward employment.

The market for competence is now underway

The normalization of the labor market situation has had a significant impact on employers’ hiring decisions. Companies, aware of the current situation, have been planning budgets for 2023 with more caution, treating hiring as an investment expecting concrete results. Increased awareness of the market for competencies has meant that companies are now focusing on the value a new employee can bring.

Employees’ perspective

In 2023, a more cautious approach by employees to career changes is noticeable. It is no longer just a matter of salary compliance, but rather job security. People have become more aware, looking for stability in new jobs. The “the cash register must match” approach is giving way to an assessment of security and organizational culture.

Increasing value of organizational culture

It is worth noting that people are increasingly guided by organizational culture when deciding to change jobs. Looking for places with a better atmosphere and a favorable work environment is becoming an important part of employer selection. Companies hiring to build a good organizational culture gain an advantage in recruitment.

Changes in wages vs. inflation

The beginning of the year brought significant changes in salary expectations. People sought higher wages, often motivated by rising inflation, which reached nearly 19% in February. The increases came in response to more expensive loans and financial obligations related to investments, which had previously been fueled by low interest rates. People were not only looking for a better place to work, but also one where they could earn enough to meet their financial obligations.

The new normal in IT?

The new reality in the IT industry is setting new standards, and the crisis has contributed to significant changes in how companies approach hiring. Now data and results count, companies are looking for TOP talent, and candidates with more commitment are gaining an edge. In addition to programming, specializations such as Security, Data Analytics, AI and IT Administration are gaining ground. Salaries are stabilizing at the level of actual skills and performance, and entry into the industry for Entry candidates requires visible passion and commitment. Recruiting is increasingly moving to social media platforms, and the ability to use AI is becoming crucial. Proactive actions, business understanding and Employer Branding skills are now valued.

Recommendations for IT Recruiters and more

Leverage the strengths you’ve acquired through your career path:

  • Creativity in finding candidates:

Creativity has become a key component of recruiting in a standardized market where there is less competition for specialists. Using a variety of tools, such as advanced search, social media, and networking, is becoming important. Recruiters should develop out-of-the-box methods to reach candidates.

  • Business and marketing skills:

Business knowledge and marketing skills are becoming as important as tool skills. Recruiters should be able to operate at the frontiers of marketing, building employer branding and presenting job offers in an attractive way. Understanding the business and its needs is the key to successful recruiting.

  • The value of soft skills:

Soft skills are the cornerstone of recruitment. Presenting an offer, building relationships with candidates, and communicating effectively become key elements of success. The ability to work effectively in the area of employer branding also adds value.

  • Developing HR Business Partner Skills:

For internal recruiters, developing into an HR Business Partner becomes an attractive option. Supporting managers, building organizational culture and engaging employees are key tasks. Internal recruiters should develop skills in the HR business area.

  • Previous experience as a recruiter:

Experience in marketing and sales brings unique skills to recruiting that can be key to building relationships with candidates and successfully attracting top talent. Recruiters in these areas have the potential to apply their skills in a dynamic recruiting environment.

I can share my experience, when I entered the job market there was even an obsession with “specialization”. It was highly emphasized that you had to be specific and narrowly specialized, and you couldn’t have a mismatch – the “all or nothing” principle. I think that is exactly what you should not be ashamed of and even emphasize your versatility as a great asset,” says Nicole.

What can you advise someone starting out in IT?

Before you enter the IT industry, understand what motivates you – whether it’s a passion for programming, development or a fascination with technology. Find areas of interest, such as front-end, back-end or IT security. Create your own project, gaining hands-on experience valued by employers. Join the online IT community, participate in open source projects on GitHub, which can make finding a job easier. Build relationships and online activity on LinkedIn. Attending local meetings and conferences will allow you to build contacts and gain knowledge. In addition to hard technical skills, develop soft skills such as communication and collaboration. In conclusion, entering the IT industry is not only about acquiring skills, but also about building relationships and being flexible in your approach to different areas.

Summary of the state of the labor market

Reports indicate positive trends with a surplus of companies hiring, suggesting stability and growth in the labor market. After the summer, companies are actively acquiring new projects, increasing the recovery of the market, especially in the IT industry.

The research shows that 16% of companies are planning to increase hiring, while only 16% intend to make layoffs. This indicates a greater inclination to grow teams than to downsize.

Anticipated post-pandemic investments could result in growth in sectors such as construction, services and materials. The IT industry maintains a strong employment outlook, keeping demand in different areas.

Interest rates are expected to decrease, which will affect borrowing costs, motivating companies to invest and increase employment.

It is noteworthy that companies are focusing on more rational hiring, emphasizing creativity, soft skills and the ability to create value.

The change in candidates’ attitudes is manifested in greater caution, a focus on job security and organizational culture. All in all, the labor market is transforming positively, and post-pandemic investment and expected interest rate cuts will further boost the economy and employment prospects.

A key element in the labor market today is the balance between employers’ expectations and employees’ needs. These dynamics require flexibility and readiness to adapt to changing conditions.

Also, the issue of nurturing organizational culture and ensuring work-life balance is important in terms of employer behavior, especially in an era of increased interest in this aspect from employees.