9 HR Challenges for 2023
The past three years have been marked by unrelenting talent challenges. From pandemic-induced layoffs and the Great Resignation to skyrocketing wage increases and an ongoing shortage of skilled workers, organizations around the world have struggled to keep their workforce planning strategies afloat.
As we get ready to kick off a new year, we peeked into our crystal ball to see what 2023 may have in store for HR. Are we nearing calmer seas, or will talent shortages continue? What's likely to occupy HR leaders' time in the year ahead? Will wages level out? Will businesses go back to the office? Will automation redefine jobs?
There's a lot still to unwind in the HR space, so here's a look at some of the challenges the experts we consulted are foreseeing for 2023.
1. Will Work for Flexibility
As COVID-19 concerns began to wane and restrictions were lifted across states and countries, many companies began to rethink their remote work policy. Some brands, like Twitter, ordered staff back to the physical office, officially ending the remote work era, while others ditched the office altogether to embrace the digital nomad revolution.
But with talent shortages still ongoing, companies that are choosing to go against the grain, demanding workers back on location, may be risking losing some of their key talent.
PwC's 2022 Global Workforce Hopes and Fears survey found that one in five employees are looking for new jobs — and workplace flexibility is in high demand. In other words, companies that put their foot down on their return-to-the-office plan may experience higher turnover to the benefit of more hybrid-focused competitors.
2. Investing From Within
With a shortage of skilled workers, companies have had to look inward to develop much-needed skills until the storm passed. What has transpired from this practice is nothing short of a heap of benefits for both employees and employers — from reduced recruitment costs and lower turnover to greater satisfaction and enhanced productivity.
Bjorn Reynolds, CEO of Safeguard Global, said while this is significant, one of the big concerns now is whether companies will stick to the approach and continue investing in their current talent once the labor market finds its balance again.
People are the lifeblood and the cornerstone of success, Reynolds said, so companies should do everything they can to help them develop their skills to contribute to the business's success. For HR teams, this means developing processes and systems that enable employees to find training and career-building opportunities within the business.
3. Mapping Out the Future
The speed of change these past few years has been immeasurable. Companies have had to adapt to rapidly evolving conditions, while new technology came to market at an unprecedented click.
Yet, many companies continue to look at recruiting as a way to fill current skills gaps, instead of thinking into the future at what the business will need a year from now. The problem with this approach is that by the time the new recruit is onboarded and ready to take on the role, the need for that role may have already changed.
Instead, Reynolds said HR needs to look to the future and find the talents that will be required in six to 18 months. This timeframe allows staff to be fully trained and integrated into the current office culture within the organization.
Related Article: Mapping Out Your Company's Skills Set
4. Diversifying the Ranks
Diversity, equity and inclusion (DEI) has been a hot issue this past year, and most companies now grasp the full set of benefits they can reap from having a diversified and inclusive talent pool at all levels of the organization.
Yet, according to Affirmity's 2022 Future of Diversity, Equity, and Inclusion report, only 22% of DE&I initiatives are in their expert or advanced stages — and only 40% of companies offer employees DE&I learning/development strategies.
To succeed in the year ahead, HR departments must ensure that diversity and equal opportunities are available to everyone. There are numerous ways to achieve this, but it is HR leaders' responsibility to communicate these efforts to the workforce so that everyone can take advantage.
5. Complying With Pay Transparency
Further building out the DEI space is the growing demand for pay transparency at organizations around the world. Traci Chernoff, director of employee engagement at Legion Technologies, said HR teams should regularly check that their systems meet new and changing legislation.
"Keep an eye out on continued legislation around pay transparency, which has already gone into effect in many states across the country," she said.
HR leaders should also ensure their practices are just and fair. Not only is it good ethics, but how the public perceives an employer can also significantly affect potential recruits, with those with a better reputation attracting the best talent.
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6. The Path to Automation
For most organizations, the journey to digital transformation began years ago, though it was accelerated greatly by the pandemic in 2020. Yet, few companies have achieved the goals they had initially set out. And as record-high inflation and the threat of a recession remain concerns, some companies are reluctant to keep up the pace of investments.
Reynolds said many HR teams are stuck utilizing manual tasks when so many mundane tasks could be automated. By automating jobs through better software, HR teams can deploy their resources more efficiently and be a more significant part of the organization's strategic goals.
Experts agree: the benefits of automation largely outweigh the cost of deployment, and companies prepared to lead in their space by increasing efficiencies are likely to come out winning.
Related Article: Why Many Workers Still Fear Automation
7. Instability in the Market
Current economic instability is affecting employees on many levels, including job security, wage inflation, and health and safety. There are many elements that can impact an employee's state of mind and productivity, and HR leaders should ensure to speak openly, frequently and honestly about how the market is affecting — or not — the company.
"If [employees] feel their needs are not being met, they will leave their jobs for an employer that will address these concerns," said Cristian Grossmann, CEO and co-founder of Beekeeper.
Grossmann suggests employers and HR teams try to make a difference in the lives of those working for them. These supports, he said, can include providing better paid time off, higher benefits, shift predictability and systems to allow staff flexibility.
8. Two-Way Communications
In a remote workplace, there is a great need for clear and frequent communications due to the lack of in-person interactions throughout the workday. And while many companies have already taken this advice to heart, one remaining problem, according to Grossmann, is that communications still tend to happen more from the top-down.
This style restricts the success of communications, as information trickles down the chain of command and is often seen as clunky. It ultimately creates confusion and distrust within the organization, he said.
The solution is simple: direct communications with frontline and remote staff. By flattening the communication hierarchy, frontline workers can see that management care about their inclusion in business decisions, which can yield higher-performing teams.
9. Growing the Team
One challenge on HR's desk for 2023 will likely be to support employees in their quest for growth.
Grossmann believes employers have a responsibility to help employees advance in their careers. After all, not having such opportunities is one of the reasons why 20% of employees are considering leaving their current employer, he said.
Research after research has found that today's employees aren't just looking for a job; they are there for a clear career. They want to improve their skills, their positions and contribute positively to their employers. It's therefore important for HR to tap into that need to secure the talent they have and further fuel passion, growth and innovation.
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