Top 6 HR Trends For 2023

May 2, 2023 No Comments

By Edie L. Goldberg, Ph.D., nationally recognized expert in HR Strategy.

Where is HR headed in 2023? Many of the trends that appeared during the pandemic will continue. Events related to the situation in Europe, the climate crisis, the social justice movement and a looming recession will continue to transform the context for your business.

1. Talent Shortages And Upskilling

We are still facing enormous talent shortages as skill sets must keep pace with new technology. In 2022, there were two open jobs for every unemployed person. Although recent months saw layoffs in the technology industry, there are still significant talent shortages in tech. The talent crunch is also acute in hospitality, healthcare and retail.

Companies need to find new approaches to access the talent they require. Many organizations will turn to developing their internal talent because the external supply is insufficient. Companies will also need to tap nontraditional sources of talent: people without a four-year college degree. Broadening the list of accepted credentials and certifications, especially for technical skills, is one way that companies can attract new sources of talent. Continuing to rely on a four-year college degree does not guarantee the most up-to-date skills needed in many technical roles.

2. Employee Experience

The employee experience is among the hottest new areas of focus in HR. Employees want their work experience to be as easy and customized as their Amazon and Netflix experiences. A wide variety of employee experience platforms have entered the market, and the demand for these technologies continues to increase. Employee experience trends include:

– Flexible Work Models

Because of the remote work experience during the pandemic, many employees want the flexibility to work at home when they choose. Some companies are even job crafting, i.e., allowing employees to design their job around what brings them the most satisfaction and what best leverages their expertise.

– Internal Talent Mobility

Expect the explosion in internal marketplaces to continue. Internal talent marketplaces help optimize, develop and retain human resources on a previously unseen scale. Talent mobility not only helps you build new skills, but it also increases employee engagement and unleashes hidden capabilities. Internal talent mobility strategies, like gigs or projects, allow companies to borrow what they can’t buy in the short term.

– Training Managers To Have More Meaningful And Intentional Conversations

Recently, company leaders have been concerned that the culture in their organizations was deteriorating due to remote and hybrid work. The root cause is that managers have not been properly trained in how to engage with employees regardless of where they work, in the office or at home. Managers need to be more intentional about how they interact with employees and how they reinforce the values of the organization through their day-to-day behaviors. Research from Gallup has demonstrated that when managers have meaningful conversations with their employees, they increase employee engagement. Helping to improve managers’ skills will be an important part of improving the employee experience.

3. Organizational Agility

The Covid-19 pandemic brought to light the need for companies to build the agility to pivot their organization quickly to address changing business requirements. From Bank of America setting up a new PPP loan department seemingly overnight to Mastercard accelerating its plans to increase access to contactless payments by adding it to more of its products, companies met real challenges very rapidly.

Companies that had the ability to shift talent to their most pressing business challenges came out ahead. Developing new strategies to optimize the use of talent helps enable a more responsive organization.

4. Purpose-Driven Work And Workplace

Over the past several years we’ve seen a new role emerge for HR: “Culture Architect and Community Activist.” Employees are beginning to put more weight on the culture of an organization and how it stands up for the values it espouses.

Increasingly, people want to work for a company that gives an employee purpose and meaning, whether through their work or because of a belief in what the company stands for. Companies will seek to both demonstrate their values and show employees and customers what the brand stands for.

5. Addressing Workplace Burnout And Mental Health Challenges

The first two years of the pandemic resulted in people working an excessive number of hours as we increasingly blurred the lines between work and home. The fallout is unprecedented levels of workplace burnout, as well as a huge increase in depression and anxiety. Those issues amount to $1 trillion dollars of lost productivity according to the World Health Organization.

We need to be more realistic about what we expect from our employees and reinforce the need to take time off. We also need to provide support for burnout, stress and mental health challenges that impede well-being and hence productivity.

6. HR Digitization

Pre-pandemic we were in the middle of a 10-year transition toward HR digitization to improve the employee experience and increase personalization. The pandemic accelerated the timeline. Digital transformation projects that we thought would take three years took three weeks.

We have made great strides, but not enough companies are leveraging the technology available to improve how we work. For example, new talent analytics tools can analyze where an employee is within their pay band, how long they have been in that role, changes in engagement scores, increases in time off, etc. to determine if an employee is at risk for turning over. Managers then get a list of at-risk employees and specific steps to take to reduce their turnover risk.

A tight labor market, inflation and perhaps a recession means challenging business conditions ahead. HR can respond by optimizing existing talent through strategies that both better leverage what you have internally and engage and support employees to increase productivity. It all comes down to the employee experience. Engaged employees are more productive, experience less stress and are less likely to turnover.