HR Insights
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December 9, 2022

What’s ahead for HR in 2023: Top priorities and trends

At a time when budgets are tightening, HR must continue to meet an array of strategic business objectives, while supporting employees’ ever-changing needs. Here’s what they’ll be focused on in 2023.

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Between the global pandemic, social unrest, geopolitical instability, and macroeconomic uncertainty, HR professionals are facing more complex challenges than ever.

Not only do HR teams need to offer employees greater support than ever before, but they also have to attract and retain top talent and deliver on key strategic business objectives at a time when resources are scarce and budgets are tightening.

Below, we look at four of the top 2023 HR trends that every human resources professional should be aware of as they head into the new year.

1. Employee wellbeing takes on even greater importance

It’s no secret that today’s workers feel increasingly stressed, stretched, and burnt out. Whether it’s navigating the realities of hybrid work, dealing with the impact of higher inflation and rising interest rates on their personal finances, or simply being asked to do more with less as companies brace for a recession, many employees are feeling the pressure.

While some may choose to leave their role as a result, for those who don’t have that luxury, pressures like these are a distraction. They can reduce efficiency and make employees less productive at work.

In 2023, it will become increasingly important for employers to take the actions necessary to support their employees’ overall well-being. That will include fostering better work environments and supporting employees with the mental, physical, and financial resources they need to be successful. Practically speaking, that encompasses everything from enacting stricter work-life balance policies, to promoting healthier lifestyles in and outside of work, to giving them the education and training they need to make sound financial decisions.

2. Plugging gaps with skills and career development opportunities

Empowering your workforce with the training they need to acquire new skills and advance their career is always important. But in 2023, that goal will take on particular urgency as companies look to upskill employees who were brought on or promoted during the Great Resignation. That’s because the combination of millions of employees leaving their jobs over the past few years and ultra-low unemployment rates has left many companies struggling to find the talent they need.

As a result, some have had no choice but to promote existing workers before they were actually ready or hire external candidates who may not have possessed all the necessary skills. Either way, that leaves a major skills gap.

While upskilling workers is critical at all levels of the organization, it’s essential among managers and other business leaders to drive retention and engagement and ensure that they’re able to lead their teams successfully. In addition to ensuring they have the right technical skills, it’s also important that employees have the necessary training to lead remote or hybrid teams effectively.

To get the best results, HR teams will need to craft leadership development plans, implement talent rotation and mentoring programs, and give employees regular opportunities to take classes, pursue training, or otherwise increase their knowledge and enhance their skillsets.

3. Embracing workplace flexibility

If the pandemic had any universal and lasting impact on business, it’s changed the way employees want to work. After more than two years of having adapted to either remote, hybrid, or asynchronous work, a significant number of employees aren’t willing to give that up. They want to be able to work from anywhere so that they can avoid long commutes and having to live in high-cost urban environments. They also want to work when it fits their schedule so that they can be available to provide care for family members, enjoy greater flexibility, or simply strike a better work-life balance.

While many executives want their employees to return to the office full-time — something that they say is critical to maintaining their company culture — nearly half of employees disagree. In our 2023 Pulse of Talent research, 49% of survey respondents said flexibility is one of the most important attributes to them in a job. In fact, respondents aged 18 to 24 rated flexibility as the job attribute they value most, even more than compensation.

For HR leaders, it’s critical to empower employees with the tools they need to be as effective as possible from any location. So too is ensuring that managers are equipped to oversee them effectively. HR must also help executives understand the potential implications that not allowing for at least some level of workplace flexibility could have on attracting and retaining talent.

4. Promoting pay transparency and fair compensation

A new study from Mercer finds that pay is the top driver of employee satisfaction at work, while pay-related issues like being able to cover monthly expenses and afford to retire have emerged as the biggest stressors keeping workers up at night. Here, inflation and higher costs are to blame.

For HR professionals, it will be important to help employees understand how decisions around compensation are made and to ensure they are indeed being compensated fairly. This will be a particularly relevant issue given that unemployment levels remain remarkably low, inflation is high, and labor markets are tight. Under such conditions, it’s not uncommon for companies to have to hire new employees at considerably higher salaries than they’re paying existing staff to do the same work. Left unaddressed, this can result in pay inequality and distrust.

Get ready for a busy year

The 2023 HR trends outlined above will be crucial to remember as the recent disruptions around the world continue to make their ripple effect. As an HR professional, addressing these trends proactively could help you ensure your company’s long-term success.

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