Although the labor market is tight and employees are becoming more selective about how and where they work, workers have had an extremely difficult few years. From the immediate transition to remote work (along with countless other disruptions caused by the pandemic) to a global economic crisis, employees have faced a series of shocks that are now contributing to a deep sense of anxiety and uncertainty about what the future will bring.
HR teams can address these concerns by conforming to the way their employees want to work and providing the individualized support they need. This means integrating remote and office work, monitoring performance of teams and finding ways to optimize their performance with limited resources, providing flexible benefits and addressing rising employee costs, and focusing on professional development and talent mobility. HR professionals will also have to help employees maintain a healthy workplace culture, which will require them to strike a balance between remote and in-person work, facilitate collaboration, and keep lines of communication open.
It will also be essential for HR teams to develop streamlined and effective talent acquisition and onboarding procedures, as competition for employees remains intense. As a stressful and chaotic year comes to an end, let’s take a closer look at a few of these HR trends and consider how companies can build healthier workforces in 2023.
Companies Will Continue Adapting to Hybrid Work
While the transition to remote work was difficult, many employees now say they prefer at least some remote work over returning to the office full-time. According to a McKinsey survey, 87 percent of the employees who are allowed to work remotely do so, averaging three days of remote work per week. However, many employees miss the ability to interact with their colleagues and collaborate in the office, and a PwC survey found that 65 percent of executives believe the office is “very important” for productivity. It’s clear that hybrid work is here to stay, which means HR teams will have to improve their remote platforms while building a stronger in-person work environment.
Hiring Managers Will Leverage Access to Global Talent Pools
The shift to remote operations has given companies the ability to recruit much more broadly, which is why it has never been more vital to implement hiring, onboarding, and training programs that will attract diverse and high-quality candidates. Job-seekers pay close attention to the hiring process, and it can determine whether or not they accept a job. A Cronofy survey found that 43 percent of job-seekers have dropped out of a hiring process due to scheduling delays, while 77 percent of senior candidates say the recruitment process affects their perception of a company. To take full advantage of global talent pools, HR teams should use predictive hiring tools like pre-employment assessments and structured interviews – tools that will help them choose the best candidates for open roles and make the hiring process more efficient at the same time.
Flexibility Will Remain the Top Employee Demand
While the concept of workplace flexibility is often used interchangeably with remote work, it applies to much more than where employees work. For example, a 2022 survey of American employees found that the top change companies could make to improve their work environments is the implementation of flexible scheduling. While this is a request that’s often associated with remote work, companies can offer flexible hours to employees who are coming into the office. HR teams can also develop flexible benefits packages that address employees’ unique needs and concerns, such as convertible PTO which allows them to reallocate unused vacation time toward retirement contributions, health savings accounts, student loan payments, and other priorities.
Talent Mobility Has Become Critical for Retention
Despite the global economic contraction, the labor market remains hot: the U.S. unemployment rate is 3.7 percent and the economy added 263,000 jobs in November. This market, along with shifting norms and expectations around work, have contributed to high turnover rates. Many employees are reassessing their careers, and the availability of remote work has opened up a much wider range of opportunities. One of the best ways for companies to retain employees is to provide professional development opportunities and talent mobility. According to Gallup, a key element of employee engagement is the availability of “opportunities at work to learn and grow.” Meanwhile, 77 percent of employees say they’re ready to learn new skills or completely retrain. When companies focus on talent mobility, they’ll improve morale by helping employees move into exciting new roles while limiting the costs of hiring and onboarding new talent.
Workplace Culture Will Be a Core Focus
The transition to remote work has raised fundamental questions about the establishment and maintenance of healthy company cultures. One of the reasons company leaders are focused on getting employees back into the office at least some of the time is their conviction that in-person work is a cultural necessity. PwC found that 68 percent of executives “believe that people should be in the office at least three days a week to maintain a distinctive company culture.” However, many companies are also trying to bring the camaraderie and spontaneity of physical offices to remote workers in a way that goes beyond giving a thumbs-up on Slack. HR teams will need to develop a more integrative approach to the workforce, which facilitates communication and collaboration between remote and in-person employees, creates shared goals, and brings employees together in many different environments.
As Economic Conditions Tighten More Will Be Required with Less
As the business environment continues to evolve, managers will need to be increasingly adept at managing budgets, working with fewer resources, and maximizing productivity. This will require a combination of strategic thinking and strong leadership skills. In order to manage budgets effectively, managers will need to have a clear understanding of the company’s financial situation and be able to identify areas where costs can be reduced without impacting the quality of the company’s products or services. At the same time, they will need to work closely with their team members to ensure that everyone is focused on delivering results, and that the team is able to make the most of the resources at their disposal. By doing this, managers will be able to help their teams achieve their goals and drive the company’s success.
HR professionals have confronted many daunting challenges over the past year. As the global economic situation deteriorates, competition for talent remains fierce, and employees continue to reevaluate their careers, 2023 will present plenty of obstacles as well. The companies in a position to outperform their competitors next year are the ones that build their approach to talent acquisition and management around how today’s employees actually work. In other words, they’ll provide the flexibility and support necessary to help employees navigate some of the most profound technological and economic shifts in decades.
Saad Siddiqui is General Partner at Telstra Ventures.
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