Entering 2023, HR leaders are finding themselves battling economic uncertainty like never before. Rising inflation rates have affected every industry. As of December 13, 2022, the U.S. Labor Department reports the annual inflation rate is 7.7%. The old phrase, “what goes up, must come down” comes to mind as organizations face the challenge of meeting these rising costs, while also preparing for a dreaded recession. These uncertainties will influence a lot of decisions in HR. In our first Astronology® of the year, we will discuss four HR trends we anticipate to be front and center for HR Professionals in 2023 as a result of these macroeconomic forces.
With layoffs at large tech organizations in the news last year, and economists predicting an incoming recession, employees are concerned about the fate of their own employment – and employers are trying to brace for impact. In 2022, salary increases rose to about 4.2%. For 2023, salary increase budgets are forecast to increase to 4.6%. In response, organizations are adjusting their salary budgets to increase spending through compensation plans and benefit programs their employees value. We look forward to sharing more Astronology® articles in the future regarding compensation trends in 2023.
Fighting “Quiet Quitting” with Upskilling
In 2022 “Quiet Quitting” (employee disengagement) became a trending HR topic. In response, employers began strategizing how to combat it in 2023. Specifically, attempts to address this issue were made by focusing on employee satisfaction and engagement. The 2022 Global Career Impact Survey from Emeritus highlighted that 89% of Emeritus learners feel more engaged at work if they are learning new concepts and skills. A recent Gallup study found that “48% of American workers would make the move to a new job if opportunities for skills training were offered.” In response, organizations are developing learning and development programs where upskilling is encouraged. Todd Zipper, executive vice president at Wiley publishing house explained in a recent SHRM online article, “…This strategy will open new pathways to career advancement and internal mobility for succession planning. As a result, promoting talent from within companies will take on increasing significance to enhance retention and tame recruitment and onboarding costs.” To learn more about upskilling and how you can develop your own program, read our article on upskilling!
Continued Diversity, Equity, Inclusion, and Belonging (DEIB) Efforts
Nearly 80% of workers expect their place of work to value DEIB (Diversity, Equity, Inclusion, and Belonging), and 50% of employees are less likely to leave a company that has strong DEIB values. This means that companies have to maintain and improve their DEIB efforts in 2023. In a recent SHRM article, ChartHop’s Director of DEIB, Ivori Johnson, expressed, “DEIB is the future of HR. Because of their commonalities, I see a significant overlap in the roles diversity, equity, inclusion and belonging leaders and HR leaders play within a company. A DEIB leader may sit in on performance reviews as an impartial observer to identify possible bias. These leaders may also contribute to onboarding to ensure that the company is thinking through the lens of inclusion.” We look forward to seeing how employers take their DEIB efforts to the next level in 2023.
Another trending HR topic for 2023 is the state of flexible work. During the height of the pandemic, the majority of work was performed remotely. There is a viewpoint from many in leadership roles that coming into the office builds better work culture and should be prioritized. As a result, starting during the summer of 2021 we saw a variety of employers try different strategies to encourage employees to return to work facilities. The results of these attempts have been mixed. What was clear from these attempts is that remote work or hybrid work is here to stay. Gallup polls project that about “75% of remote capable workers will be hybrid or fully remote in the long term.”
Some theorize the current economic challenges may turn the tide for more in-person work. Yet most experts believe there are more advantages to providing some form of flexible work. For instance, a study performed by Stanford University, the University of Chicago, and the Instituto Tecnológico Autónomo de México cites that hybrid work boosted employee satisfaction and productivity, resulting in reduced attrition by 35%. Additionally, some organizations are reaping the benefits from lowered expenses by reducing their office facilities. Yelp recently closed three of their offices, and plans to use the savings on their hiring and employee benefits. We look forward to seeing how flexible work continues to evolve in 2023.
What’s On Your Radar Screen?
We’ve shared four trends that will impact HR in 2023. What other HR trends do you think will have a spotlight in 2023? Share your thoughts and opinions in the comment box below!