5 HR Trends- 2023

2023 is bringing a revolution in the world of work. The pandemic has driven digital transformation four years in the future, transforming the relationship between employee-employer. Although HR has been the captain of the boat for leading change and crisis in the past years, it also runs the risk of missing the boat on this fundamental shift in how we work.

I believe that 2023 is HR’s window of opportunity to transpose the function’s value proposition in the post-pandemic reality. Human Resources professionals have played a notable role in guiding firms through the storm of the pandemic, inflation surge, and economic slowdown. In simple words, HR can significantly impact firms if adequately enabled.

Experts have pinpointed a few HR trends to expect that will be shaping 2023 in the workplace. Some trends have been ongoing, but current developments have accelerated them. While many are the outcome of intense changes that organizations have had to make and, in some cases, are still facing.

Let’s dive in!

1. A compass to total well being 

There’s a hushed crisis happening in organizations. Reports from American Psychological Association(APA), nearly 3 in 5 employees reported adverse effects of work-related stress in the wake of the pandemic. 87% of Americans felt anxious about inflation, and 7 in 10 employees worry that the purchasing power changes haven’t supported their compensation.  

HR has arguably been impacted too. The function played a leading role during the pandemic, which has taken its toll. Reports revealed that a staggering 98% of HR professionals report feeling burned out at some point in the past six months. 

But now HR trend for 2023 is that organizations will take more accountability for this looming burnout crisis among employees. However, this may go against the nature of Human Resources, which must focus on helping others. But HR professionals should put on their oxygen masks first. Otherwise, the department will be unable to help the rest of the organization.

Next, HR will move towards a more proactive approach to well-being and resilience, involving a more holistic employee approach focusing on mental, physical, and financial. 

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2. Managing workforce ecosystems

While HR has traditionally focused on permanent employees, other types of workers, like contractors, gig workers, and employees working for supply chain partners, play an increasingly significant role in the company’s service delivery.

In the United States alone, 16% of Americans have earned money through gig platforms. ADP stated that in about 40% of companies, one in four workers is a gig worker. Meaning that a big part of the total workforce goes unmanaged, and HR needs to take advantage of an opportunity to make an impact.

2023 is the year where HR will begin to manage the complicated workforce ecosystem beyond permanent employees. Likewise, HR will become actively involved in managing its contingent workforce. Creating a more blended workforce ecosystem by adding value to external. 

Uber is the largest taxi company without drivers, Airbnb is the largest hotel chain without properties, and platforms like YouTube, Netflix, and TikTok outsource most of their content creation. These companies are highly dependent on their contributors. There is a role for HR to play in making these contributors part of their people practices.

3. Redefining remote and hybrid work strategies

Work has changed in the course of the pandemic. McKinsey reported that the pandemic has pushed up digital transformation in organizations by three to four years. And workers have happily adapted. For example, the data from LinkedIn displays that remote jobs, which make up around 20% of all jobs on LinkedIn, received over 50% of all job applications!

Thus, resistance to some degree of flexible working will put businesses at a competitive disadvantage. Only some organizations have realized this and continue to hold onto old strategies that previously made sense. For example, 95% of executives believe that employees must be in the office to maintain company culture. Also, the collaboration of Microsoft employees dropped by 25% and became more siloed in a remote setting compared to pre-pandemic levels. 

4. Up-skilling leaders and managers

During the Great Resignation, many high performers were promoted to managerial positions to retain them. Simultaneously, several organizations have been willing to take a shot at hiring less experienced candidates for managerial positions due to the talent shortage.

Meaning that today’s leadership pipeline is loaded with new candidates with no managerial experience. Developing the next generation of leaders is a top challenge for 55% of CEOs for a good reason. Organizations delivering high-quality development experiences are 1.5 times more likely to have high leader engagement and retention rates. In addition, they are twice as likely to be voted as the best places to work. However, only 11% of companies have a strong leadership bench.

Here HR plays a pivotal role. One of the significant trends in Human Resources we see for 2023 is HR’s investment in upskilling leaders. HR practitioners will identify and communicate leadership expectations. What does the organization expect from leaders? How does this decrypt into practical behaviors? And how do we help leaders become self-aware of their behaviors’ impact on those around them?

Besides clear communication about expectations, HR becomes ears to the employees’ voice. They invest in leadership development plans and programs, training, mentorship, on-the-job immersive experiences, and talent rotation strategies to fast-track exposure, experience, and skill development. 

Upskilling leaders and managers are key for HR to create value in the organization and help retain employees. 

5. Reshaping workplace learning

2023 is also the year in which HR will reinvent employee development strategies and bring learning into the day-to-day job.

According to a McKinsey report, the Great Resignation and the Great Reshuffle, lack of career development and advancement is the prime reason for quitting a job. While 87% of the firms know they have a skills gap or will have one within the next few years, only 40% of the employees say their company is upskilling.

Closing the skill gap is one of the crucial ways for HR to make a difference in their organization. However, doing this well demands initiative and reinvention of old learning approaches. In 2023, the focus will be more on strategic learning aligned with the organization’s capabilities to be competitive. It will incorporate hard skills, which are more technical, and soft skills, like communication, time management, and analytical and critical thinking skills. Therefore, enforcing learning these within the flow of work requires a reinvention of traditional training methods. 

A final word

We see 2023 as a year of tremendous opportunity for HR. However, there are several challenges to overcome. It is time for HR to step up to the plate, capture the opportunities that 2023 offers, and reposition the function’s value proposition as a leader and a builder of competitive people potential. That is the true power of HR: driving strategic impact through people.


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