As the curtain comes down on 2022, HR professionals will be turning their attentions to the year ahead, and the challenges and trends a new year will bring.
The past three years have seen seismic changes take place in the workplace. The fallout from the COVID-19 pandemic, an ongoing financial crisis and the ‘Great Resignation’ have all played their part in transforming the role of HR: from being seen (unfairly) as just administrative functions, to now being recognised as key strategic partners who are essential to the ongoing growth and success of a business.
2023 is set to bring even further transformative changes to the British workplace, driven primarily by a deepening recession and changing attitudes towards work-life balance. So, to get a better understanding of the trends HR professionals will be looking out for in the year ahead, we asked our very own Head of HR, Kim Holdroyd, her thoughts what on the trends and challenges facing HR will be in 2023.
The key HR trends hitting UK workplaces in 2023
After three years of upheaval, I believe 2023 will see British workplaces finally move away from the reactive type of changes we all saw during the height of the pandemic.
Many businesses have come to terms with ‘new’ ways of working (such as hybrid and flexible roles), as well as adapting to the changing relationships between employee and employer, so attention will now shift back onto longer-term, strategic aims. However, the ongoing financial turmoil that’s affecting everyone will undoubtedly play its part in shaping HR strategy both in 2023 and beyond.
As our own research discovered, nearly 90% of senior business leaders believe their businesses have been or will be negatively impacted by the recession. In addition, our research revealed that preventing excess staff turnover, improving health and wellbeing programmes and upskilling the workforce will be HR’s priorities during a recession. As a result, these factors will undoubtedly play their part in influencing 2023’s key HR trends.
With those comments in mind, here’s what I believe will be the key trends HR professionals need to prepare for in 2023.
An emphasis on improving and maintaining robust employee health and wellbeing strategies
I personally think one of the key trends to keep an eye on in 2023 will be the growing importance of employee wellbeing and support. There have been numerous studies that have linked economic recessions with a rise in mental health issues; but it’s not necessarily the recession itself that negatively affects people’s wellbeing – rather, the implications.
Our recent survey into how HR is looking to prepare for the recession found that 73% of managers said their employees had expressed concerns over how a recession would affect their jobs. Of those 73% of managers, an overwhelming 57% said they were mainly worried about redundancies.
Given that we’re heading into a new year facing so much uncertainty and with no end in sight, I strongly believe the subject of employee health and financial wellbeing is something that will remain in sharp focus throughout the coming year. So, it will be a vitally important element for HR and people management strategies when it comes to maintaining healthy company cultures and retaining top talent.
Redundancies hitting the technology and recruitment sectors
You might have seen in the news the ongoing crisis that’s enveloped Twitter since its takeover by billionaire Elon Musk. His decision to layoff roughly half of its global workforce – around 7,500 people in total – sent shockwaves through the tech world. But, this isn’t an isolated incident.
The technology industry is one sector that’s feeling the brunt of the global financial crisis. In fact, it’s been reported that many ‘big tech’ companies are either laying off huge numbers of staff or freezing recruitment efforts altogether. This is also having a damaging effect on people within recruitment sectors. This is because, with recruitment efforts being scaled back or frozen altogether, the red-hot jobs market we’ve become used to over the past couple of years has now begun to grind to a halt.
As talent acquisition related positions at large companies are being laid off, recruitment agencies are having to face up to a grim reality of companies not actively recruiting or hunting for new talent – and it doesn’t take an expert to tell you what that will lead to…
Although this situation won’t last forever, I really do think that 2023 will see both the tech and recruitment sectors suffering the most employee losses during the recession. This will lead to a huge pool of candidates looking for new positions, but also something of a surprising side effect…
A shortage of vital talent… ironically, in the technology sector
Despite a jobs market flooded with those from technology-based backgrounds, I believe that there will be a talent shortage affecting the industry overall. This is because, with companies unable or unwilling to recruit new talent, they’ll find it difficult to replace vital skills and experience.
That’s why I believe employee upskilling will be a core trend in 2023, as it’s one of the most cost-effective ways businesses can fill vacant skills gaps within their workforces. Indeed, this thought is reflected by our own research, which found that upskilling workforces was one of HR’s top priorities during a recession.
As an HR professional, you’ll need to survey your business leaders – especially those within the tech sectors – to identify potential areas of concern and map them against what you know about your workforce. Carrying out a proper skills audit will also help ensure you suggest appropriate development strategies and be better prepared if staff leave or redundancies become inevitable.
The continued spread of ‘quiet quitting’
Despite many businesses looking to maximise employee productivity, it seems large numbers of employees have chosen to quietly quit their roles – and I don’t see this trend going away any time soon!
Poor levels of employee engagement have been an ongoing problem for HR teams. If employees don’t engage with their role or employer, they may be inclined to simply ‘check out’ and decide that the best approach is doing just enough to meet their contractual obligations – or ‘quietly quit’.
For example, Gallup’s 2022 Global Workplace Report showed that only a measly 9% of workers in the UK were engaged or enthusiastic about their work. This lack of engagement has fuelled the rise of employees choosing to simply do the bare minimum in their roles, or ‘quietly quit’, rather than go above and beyond their contractual obligations.
To combat this trend, organisations and their HR teams must go about setting realistic employee expectations. Employees going above and beyond is amazing for a business; but it should not become the standard expectation. This is especially true if employees are not receiving recognition or reasonable renumeration in line with the high standards of work produced or expected.
If businesses are hoping to navigate a biting recession, their HR teams must examine whether their workforce has been affected by the quiet quitting trend, and ask the vital question: why?
Measuring workforce engagement – by undertaking actions such as analysing HR data, conducting pulse surveys and keeping an eye on their company’s social reputation – can all help uncover if employees are fully invested in their roles, or just doing the bare minimum.
A continued emphasis and exploration of improving positive work-life balances
As we enter 2023, I believe HR will need to place further emphasis on promoting healthy work-life balances. That’s because I believe everyone – now more than ever – is demanding a more positive work-life balance, and this is another big factor driving the ‘quiet quitting’ phenomenon.
With large numbers of us forced to work from home during the lockdowns of 2020-21, many people realised they’d been devoting too much of their own time to work at the expense of their personal lives. Many employees have begun re-evaluating their roles and standing up for their worth – fighting against the so-called ‘hustle culture’ and refusing to devote more and more of their own time to employers who fail to show recognition for their efforts.
It’s also perhaps a continued reliance on pre-pandemic ways of working that many employees are now refusing to return to. For example, the idea of the traditional daily commute has begun to appear old-fashioned, unnecessary (in many instances) and often a huge physical and emotional drain: especially when we consider how technology now allows large numbers of us to perform our duties remotely just as easily as if we were in an office.
If people feel their work-life balance is out of kilter, they’ll be more stressed, less productive and often resentful that work is taking over their personal lives. That’s why its essential HR teams examine what they can do to encourage healthier work-life balances in their own organisations: be it exploring the idea of flexible working, to maybe even seeing if something more radical – such as a four-day working week – could improve both the productivity and wellbeing of their workforces.
A focus on effective employee retention and attraction strategies
The 6th and final key trend for HR in 2023 I believe will be a renewed focus on effective employee retention and attraction strategies. This actually follows nicely from the last trend, as the rise in remote / flexible working has also opened up more job opportunities than ever – despite the economic downturn. This means companies need to be doing more to figure out how best to retain their most valuable employees and attract the best candidates a cooling jobs market has to offer.
One thing which can help both levels of staff attraction and retention is a focus on career growth. For example, a 2018 report by Global Talent Monitor found that 40% of employees left a role because they couldn’t progress any further. For candidates looking for a new job, career progression is an important factor in their decision making, with a recent article in People Management stating career progression as a top five requirement for candidates.
Those of us in HR circles have always recognised the need for effective retention and attraction strategies. However, as we enter into a new year of financial uncertainty, I honestly believe that organisations will be focusing on them intently like never before, and that could certainly make 2023 an interesting year for HR professionals indeed.
Kim is passionate about all things HR and people operations: specialising in the employee life cycle, company culture, and employee empowerment. Her career background has been spent with various industries, including technology start-ups, gaming software, and recruitment.