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Human resources leaders have experienced unusual challenges in the past couple of years. As remote work abruptly shifted, mass resignations occurred, economic volatility increased, and geopolitical instability led to chaos.
Despite the changes in the world of work coming in 2023, we believe HR has a unique opportunity to reposition the function's value proposition after the pandemic.
Here are 10 HR trends that will shape the workplace in 2023. Recently, certain trends have accelerated, although they have been ongoing for some time. Some of them result from drastic changes that organizations have had to make and, in some cases, still face.
Let's dive in!
Organizations are suffering from a silent crisis. Nearly 3 in 5 employees experienced negative effects of work-related stress following the pandemic. 78% of Americans worry about inflation, and seven in ten believe that their wages do not match changes in purchasing power. The HR department has also been affected. (As per APA report)
It is reported that 98% of HR professionals have felt burnt out in the last six months. (Report by Workvivo)
Organizations will take more responsibility for employees' burnout crisis in 2023. The first reason is that it is a good thing to do, and the second is that it threatens organizational continuity.
To overcome burnout, HR must first overcome its own. Human Resources professionals must put on their oxygen masks before helping others, even though this goes against their nature. Unless the department can help the organization, the rest will suffer.
The next step is for HR to become more proactive with well-being. It involves developing a holistic approach to employee well-being that addresses mental, physical, and financial aspects.
Numerous companies are adopting hybrid working, except for a few outliers. Yet employers and employees are still divided on whether hybrid technology enhances or impacts productivity. Thus, solving the 'Productivity Paradox' presents HR and people analytics professionals with a chance to lead the future design of a fully adaptable company to hybrid work, workplaces, and workforces, while retaining its purpose, value, and culture.
Fort suggests discussing how employees can balance well-being, engagement, and productivity. "We don't start with how many days people should work in or out of the office."
A key HR trend for 2023 is gamification, in which game-like elements are used in non-game contexts to motivate employees, to points, badges, and leaderboards. Gamification can also be used to help employees learn new skills. Creating fun and challenging HR games is one of the essential things to remember when gamifying your program.
Almost two years ago, organizations worldwide implemented DEI to attract and retain talent. Although DEI budgets reached 7.5 billion in 2020, people remained skeptical.
Can training and DEI initiatives solve everything for management? Can it impact the workplace and its boardrooms?
The DEI track record of employers will continue to be criticized by employees. Track records go beyond numerical targets; they include fostering environments that support underrepresented talent's success through understanding their needs.
Hiring managers and HR teams can expect these concerns to surface during candidate screening. The talent you hire now has more options and agency - they're not afraid to leave.
If you don't have transparency about your efforts and don't introduce changes that address existing and incoming talent's DEI concerns, you'll lose out.
In 2023, employee retention is an important aspect for organizations. Having recovered from the pandemic, companies are worried about losing their best talent to competitors. As a result, it will become more and more cost-effective to retain existing employees rather than continuously recruit and train new ones.
Thus, employee engagement and development will be more important. Several companies have already begun preparing for this trend by aligning their HR policies and practices with their business strategies. In addition, we must offer competitive benefits and create a positive work environment.
In 2026, it was expected that 25% of people will spend an hour or more in the metaverse. Virtual events, employee onboarding, career fairs, and meetings, among other initiatives, will be launched by the biggest companies in this field. Metaverses allow us to reimagine a creative, collaborative, and productive world without constraints.
Through creating new hybrid working policies and training leaders on how to effectively lead in this unique, upcoming setting, HR ensures healthy metaverse working procedures.
The gig economy has already embraced algorithmic HR. Several experts predict that by 2023, most HR departments across the industry will utilize it for HR management. It is predicted that AI will play a significant role in HR functions, including hiring and terminating employees, growing the candidate pool, and facilitating employee engagement.
HR must slowly integrate AI and machine learning into their recruitment process to ensure fairness and inclusion in the recruitment process.
A new regulatory requirement makes reporting for ESG (environment, social, and governance) more important. In addition, investors, boards of directors, and various stakeholders, from current and prospective employees to consumers, are all pressing for changes.
The S in ESG will be increasingly important for HR leaders and business leaders as new regulations and boards of directors focus on talent acquisition and retention, diversity in new hires, the development of next-generation workers, pay equity, and transparency.
“Business and HR leaders need to develop a strategy to address the transformational impact ESG reporting will have on their company and be proactive in aligning its corporate strategy to ESG-related impacts,” said Scott Walker, CEO of XpertHR.
As part of the 'Redesigning Work' trend, three ideas have been incorporated:
We should seriously consider implementing the four-day workweek as a win-win solution for employers and employees.
Together, HR can enable a more productive and humane future of work by reimagining work, the workforce, and the workplace.
The skills-based hiring system broadens the talent pool for employers and removes career and salary barriers for nearly two-thirds of adults without bachelor's degrees in the United States. In addition to broadening the talent pool and speeding up hiring, skills-based hiring improves the diversity of thought among employees.
An increasing number of professions are shifting without a degree, such as a computer support and software engineering.
It is expected that the shift toward skills-based hiring will increase in 2023 as skills become the currency of the labor market.
2023 will be a year of immense opportunity for HR. Despite this, there are several challenges to overcome.
Organizations need to adopt a broader perspective and realize HR trends affect the entire company, not just one department. To manage organizational change effectively, HR must play a central role. Therefore, business leaders and human resources professionals must work closely and acutely together to handle workplace changes.
The second important thing for businesses to realize is that we are starting a new era, a human-first era that will see organizations not just as structures for maximizing profits and effectiveness but as vehicles for meaningful engagement and empowerment of employees.
Now is the time for HR to take the helm, capture the opportunities of 2023, and reposition itself as a business leader and a builder of competitive people capabilities. The power of HR lies in its ability to drive strategic impact through its people.
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Allen Smith
Allen Smith
Imtiaz Munshi, CPA 
