What are the key HR trends for 2023?

Lucie Mitchell asks the experts what 2023 has in store for HR.

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Research from Reed shows nearly three quarters of UK workers are considering a job change this year, with almost 10% hoping to move into a new industry entirely, in large part due to demand for higher salaries – their top priority – while work life balance and job security are also drivers. Lucie Mitchell looks at how evolving HR trends in 2023 will seek to attract and retain them as labour shortages remain tight across the UK.

As we say goodbye to 2022, thoughts may now be turning to the developing HR trends to focus on in 2023. With the cost-of-living crisis, a dramatic shift in working practices and talent shortages to contend with, HR will continue to play a key role in achieving organisational success this year. We’ve spoken to some industry experts to find out what trends HR teams should be prioritising in 2023.

Flexible and hybrid working

The Covid pandemic brought about a profound change in how and where people chose to work, with many employees now placing a greater emphasis on flexible working. As we head into the new year, there are no signs of this trend slowing down.

“Remote and hybrid working is likely to be the biggest issue in 2023,” remarks Liz Sebag-Montefiore, ​director and co-founder of HR consultancy 10Eighty. “We’ll see workers continue to defend their preferences for flexible working options, especially the ability to work remotely. In a difficult economic climate, employers may feel that workers returning to the office in 2023 will boost productivity. But studies have shown that employees are just as effective working remotely as they are in person. If good people are going to resign when remote working options are removed, it would be smart for those employers to reconsider remote and hybrid work strategies if they want to have an edge in sourcing talent in 2023.”

HR must also keep an eye on the Flexible Working Bill, which is currently progressing through Parliament. “This would give employees the right to request flexible working from day one of employment, and it’s likely that this will become law, so employers should start preparing now,” advises Kate Palmer, HR advice & consultancy director at Peninsula.

Employee wellbeing – emotional and financial

There are many factors impacting employees’ mental health right now, and as we head into 2023, these issues will continue to weigh heavily on people’s minds. It’s therefore crucial for HR to focus on employee wellness this year.

Rachel Fellowes, chief wellbeing officer at Aon, says she wants to see a transition this year from ill-being to well-being. “Wellness is high on individuals’ agendas – and therefore needs to be on employers’ agendas too – not least because burnout and poor mental health are so common. For 2023, resilience in organisations and individuals is so important – lip service or wellness whitewashing won’t work.”

With the cost-of-living crisis set to persist into this year, it’s important to consider employees’ financial wellbeing too. According to a recent report by Koa Health, 60% of employers believe personal financial concerns have a significant negative impact on employee mental health.

“HR professionals should consider going beyond mental health support – which is now offered by 93% of employers – and offer solutions that get to the root of the problem,” comments Stacey Lowman, head of employee wellbeing at Claro Wellbeing. “A good financial wellbeing strategy could provide relief and support to employees who are facing challenges or are not currently where they want to be financially, as well as improve their overall wellbeing.”

Palmer echoes this view. “Don’t ignore the emotional and financial wellbeing of your employees. As the cost-of-living rises, staff are wanting more support. A financial wellbeing policy can help staff manage debt and financial problems by outlining the support you offer.

“This support may be financial, like offering bonuses or travel loans, and might also include emotional support through an employee assistance programme. A policy helps open discussions about financial wellbeing in the workplace, so you can learn how best to help your staff when they really need it.”

New technologies and automation

With such significant changes to working practices, many HR leaders will be embracing new technologies to support this shift, says Sebag-Montefiore.

“We are likely to see employers using new technologies specifically to support remote and hybrid teams, in terms of collaboration and building relationships. We’ll see technology revolutionising our workplaces over the next few years, as blockchain and virtual reality will change the way we do business.

“We’re also likely to see an expansion of artificial intelligence (AI) and automation,” she adds. “Chatbots are already replacing human agents in some service roles and given the talent shortage, that’s probably a good thing. It’s hoped that if AI can take over routine work, employers will focus on creating meaningful work and a better employee experience bolstered with strategies to support employee wellbeing.”

Burcin Ressamoglu, CEO at Sodexo Engage, adds: “The implementation of automation and AI will accelerate business transformation. The optimisation and scaling of tech will be the key focus from 2023 onwards. Investment in technology will help to enable businesses to keep up with the high demand for hybrid work conditions, which will allow them to retain more employees and save money overtime.”

Training and upskilling

HR must prioritise training and upskilling to aid staff retention, advises Palmer. “Investing in your employees’ professional development with a clearly defined career pathway can make employees feel more valued. When they can see there’s a plan for their long-term professional success, they may be less likely to jump ship for short-term financial gain. Each department should have clearly defined pathways based on skills and knowledge. Use one-to-ones as a chance to find out individual employee’s goals, and signpost them towards training and opportunities to help them achieve these goals.”

Tom Cornell, senior I/O psychology consultant at HireVue, believes we are likely to see upskilling and job mobility trends continue to rise. “This will help to get the right people into the right roles, leading to higher levels of motivation and productivity. With fewer employees, companies will need to invest in learning and development for existing and new employees. The ability to move and grow with an employer appears to be increasingly important for jobseekers and employees alike, so this creates a perfect opportunity for businesses to cultivate top talent.”



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