This post is part of G2's 2023 digital trends series. Read more about G2’s perspective on digital transformation trends in an introduction from Emily Malis Greathouse, director, market research, and additional coverage on trends identified by G2’s analysts. 

2023 HR talent management calls for diversity recruiting and talent assessment software

Seeking talent worth investing in

When it comes to the talent pool, companies have taken employees for granted and are now bearing the brunt of it in the form of mounting turnover and record levels of disengagement worldwide. Everyone needs talented, engaged employees. Fortunately, talent assessment software and diversity recruiting software can pick up the slack.

With the average cost per hire at $4,683, according to a recent benchmarking report from SHRM, it’s important to find the right person, not just a body to fill an office (or virtual office, as the case may be).

For G2's 2023 trends, we're focusing on this specific subset of talent management, focusing on what the data says, how the space is changing, and what it means for the future of HR.

Between 2017 and 2022, reviews in G2’s Talent Assessment category grew by 1011.89%

Talent assessment software, sometimes referred to as pre-employment testing, is the first step in finding qualified candidates. What was once a simple checklist has become a more involved process. Psychometric tests, which combine personality, psychological, situational, behavioral, and skill-based markers, lead the way in accurately predicting who’s a good fit for the role.

Simulations and behavioral screening demonstrate how candidates react to situations in real time, giving employers a better idea of what their daily workday might look like. Another new emerging measurement is emotional intelligence, which digs into soft skills. What good are skills if someone can’t get along with others? With all these complex markers to determine candidate success, recruiters can’t make the process too overwhelming and risk alienating qualified people.

According to G2 data, the rising importance of talent assessment is transparent. In the last two years, the category has exploded, increasing from a couple of hundred reviews per year to nearly 1600 in 2022 as of December 1.

Diversity recruiting software, which utilizes AI in the screening and assessment phase, is another growing category in this industry. However, what’s been most notable about it in 2022 was the change in the rolling average return on investment. A rolling average calculates the average change from month to month.

For return on investment (ROI), we report the number of months until survey respondents reported getting a return on investment. At its height, it was 23 months average until ROI, but that number has steadily fallen. We predict this number will continue to fall as more departments use this tool.

Another essential trend in diversity hiring is blind hiring. Specifically, more hiring managers are turning to software that takes identifying markers like names, pictures, and even previous work experience out of the occasion to ensure bias doesn’t get in the way. Add that to the fact that diverse organizations earn 2.5 times the cash flow per employee, according to a 2022 D&I report from Research and Markets. 

What does the 2023 workplace look like? 

While the news isn’t as dire as it could be, there’s not a lot of growth predicted for 2023. Morgan Stanley predicts the U.S. economy will narrowly miss a recession, Europe’s economy will shrink, and other areas will start growing. That means recruiters must balance the reality of continuing inflation and slow economic conditions with a need for more workers and emerging growth near the end of the year. It’s a delicate balancing act that requires being more confident than ever that each candidate is qualified and that there’s no stone left unturned for potential talent.

That’s why 2023 is the year of diversity recruiting and talent assessment in HR. Don’t let potential bias or unclear testing metrics scare off people when it could make a world of difference in a shaky economy. 

Edited by Shanti S Nair