5 HR Trends to Look Out for in 2023

In recent years, we’ve all had to get acquainted and accustomed to new norms, even as the pandemic becomes a somewhat distant memory. Companies around the world, for example, have embraced and solidified hybrid and remote working as a part of their operations, with employees now starting to feel more comfortable and confident with their new working styles. 

With that said, 2023 is expected to be another year of transition for organisations in order to prioritise workforce wellbeing. Whether that’s emphasising employee mental health or providing HR support due to the rising living costs, employees are at the forefront of this year’s trends.

Below you can find a comprehensive overview of the 5 HR trends that organisations around the world will be embracing in 2023. 

1) Addressing recession through a ‘people first’ approach

If there’s one thing that 2022 has prepared us for, it’s the much anticipated recession we’ll likely be facing in 2023.

As living costs rise, a potential economic downturn is perhaps one of the most glaring trends forecasted for 2023 that HR should look out for.

For many employers, employees and HR professionals, this may be their first experience dealing with a recession of this magnitude, leaving many unsure on the next steps forward. Will organisations, for example, revert back to the ‘safe’ and traditional mindset that using layoffs is the most feasible way to manage costs? 

There is hope yet!

With the Global Talent Shortage reaching an all time high of 75% in 2022, this is actually far from likely. Organisations are instead being encouraged to adopt a ‘people first’ approach, placing employees at the heart of their operations.

This means investing in learning and development, closing current and impending skills gaps and helping individuals move on or up to new roles. 

2) Resolving the productivity issues of hybrid working 

Most organisations across the globe have now adopted some kind of hybrid or remote working scheme, however, that in itself has caused greater disconnect between employees and employers and raised questions as to how far hybrid working enhances or impacts productivity. If that wasn’t enough, the increased possibility of a global recession along with a skills shortage, have created the perfect opportunity for HR leaders to team up with people analytics professionals to reshape the way we think of hybrid work.

According to Microsoft’s Work Trend Index Special Report, 87% of employees saying they are productive, while 85% of employers stated that they found it difficult to have confidence that their staff is productive, placing even greater pressure on employees to prove themselves. 

Leaders are encouraged to shift their focus on helping their employees prioritise their workload, as 31% of employees find it important that their manager helps them focus on the work that is of most importance. 

3) Further promoting diversity, equality and inclusion

Unsurprisingly, diversity, equality and inclusion are the top areas for HR managers to focus on in 2023. Issues such as equal pay, unconscious bias, inclusivity and belonging are all major issues that are yet to be successfully dealt with when it comes to the vast majority of organisations around the world.

Based on the 2022 Workplace DEI report by Culture Amp, only 34% of organisations have sufficient resources to support their DEI initiatives, while a mere 27% of organisations know how to measure them effectively.

While many organisations now are expected to devise plans to deal with a possible recession, while also tackling solutions for rising living costs, many employers will opt to not focus on their organisation’s DEI initiatives.

More specifically, the CIPD Inclusion and Diversity at Work Survey Report 2022 found that 36% of employers said they’re not planning on focusing on any of the DEI areas over the next five years. As stated by Dr Jill Miller (PhD), CIPD Senior Policy Advisor, “It’s important that organisations don’t lose focus on inclusion and diversity and allow operational demands to take over, or assume the job is done”. 

We are far from having established solid DEI initiatives for organisations across the globe, so this is an area expected to see major changes in 2023. 

4) Championing for the mental health and wellbeing of employees 

Ever since the end of the COVID-19 pandemic, burnout rates have been soaring with 88% of UK employees reporting that they have experienced some level of burnout over the last two years, accelerating the decline of corporate challenges such as employee wellbeing. 

Now we know what you’re thinking, a lot of companies have some variant of a wellness programme available for their employees - 9 out of 10 organisations worldwide, to be exact - what more can be done?

Well, with mental health and burnout now taken more seriously in the working world, it’s not enough to simply offer an overarching employee wellness service. Instead, companies will be opting to prioritise employees with individual-focused approaches, such as wellness programmes or workplace wellness plans that can be tailored to individual employees, whether that means offering flexible working, paid personal days, financial education and so on. 

To compound this, research performed by the McKinsey Health Institute found that 4 out of 5 HR leaders view mental health and wellbeing as a top priority for their organisation, and that ‘employers should view high rates of burnout as a warning sign that the organisation - not the individuals in the workforce - needs to undergo systematic change’.

5) Incorporation of purpose and ESG

As of late, organisations around the world are being confronted with scrutiny and pressure to focus on their organisation’s Environmental, Social and Governance (ESG) propositions.

Being that ESG enables organisations to target different areas of their business to implement more sustainable and ethical practices, it should come as no surprise that this pressure often comes from industry regulators, business investors, and even employees. 

In fact, according to a study by PRCA, Millennials and Gen Z employees expect their companies to have clear propositions on ESG issues, as 61% of the respondents claimed that it’s important or very important that companies take a stance on important issues that matter to them.

That being said, a Marsh McLennan research found that by 2029 Millennials and Gen Z will make up around 72% of the global workforce. Since these generations view environmental and social concerns being of high importance, they’ll also expect more from their employers on these issues, meaning HR managers will need to help implement ESG initiatives in their organisations to help businesses identify material risks and opportunities for growth.

Although 2022 proved to be the year that organisations around the world reassessed their operations and practices, HR professionals should look at the year ahead with the above themes in mind. Keeping up with these trends and identifying how to apply them to the organisation is the best way for HR managers to stay ahead of the curve and keep their organisation in check. 

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