In 2023, what direction will HR take? Several of the trends that emerged during the pandemic are expected to persist. Factors such as the situation in Europe, the climate emergency, the social justice movement, and an impending economic downturn will continue to reshape the landscape in which your business operates.

1. Lack of talent and upskilling

As technology continues to evolve rapidly, we are still grappling with significant shortages of skilled workers. In 2022, there were twice as many job openings as there were unemployed individuals. Despite recent layoffs in the technology sector, there remains a considerable dearth of talent in this field, as well as in hospitality, healthcare, and retail.

To overcome this challenge, companies must explore new approaches for accessing the talent they need. Developing existing internal talent will become a key strategy for many organizations, given the insufficient external supply. Additionally, tapping into non-traditional sources of talent, such as those without a four-year college degree, will be critical. Broadening the list of accepted credentials and certifications, particularly for technical roles, is one way for companies to attract new sources of talent. Continuing to rely solely on a four-year college degree may not guarantee the most current skills needed in many technical positions.

2. Employee Knowledge

One of the most popular and emerging areas of HR is the focus on employee experience. In today's age, employees expect their work experience to be as convenient and personalized as their experiences with Amazon and Netflix. As a result, a diverse range of employee experience platforms have emerged in the market, with an increasing demand for such technologies. Key trends in employee experience include:

Workplace Flexibility Models

As a consequence of the pandemic-induced shift towards remote work, a significant number of employees now seek the option to work from home on a flexible basis. Certain organizations have taken this a step further and are engaging in job crafting, which entails empowering employees to shape their job roles in a manner that optimizes their skills and personal fulfillment. This involves tailoring their work responsibilities to match their areas of expertise and what brings them the greatest job satisfaction.

Intrinsic Talent Movement

Expect the continued growth of internal marketplaces, as they have become a powerful mechanism for maximizing, developing, and retaining human resources like never before. Talent mobility initiatives are instrumental in not just fostering skill growth, but also driving employee engagement and discovering untapped capabilities. Leveraging internal talent mobility strategies such as gigs or projects enables organizations to tap into resources that may not be readily obtainable through traditional means.

Managers Are Being Trained To Have More Meaningful And Thoughtful Discussions

In recent times, organizational leaders have expressed apprehension that the culture within their companies is eroding as a result of remote and hybrid work arrangements. The primary cause appears to be insufficient training for managers on how to effectively engage with employees, irrespective of their work location - be it in the office or at home. Managers must adopt a more intentional approach towards interacting with employees and reinforcing organizational values through their daily actions. Gallup research has revealed that managers who have meaningful conversations with their employees drive up employee engagement levels. Enhancing managers' skill sets will thus be a critical component of improving the overall employee experience.

3. Organizational Flexibility

The Covid-19 pandemic has underscored the importance for companies to cultivate the agility to swiftly reconfigure their organization to tackle evolving business needs. Companies such as Bank of America, which established a new PPP loan department seemingly overnight, and Mastercard, which expedited plans to expand contactless payment accessibility by integrating it into more products, effectively navigated genuine challenges in record time.

Organizations that could allocate talent to their most pressing business requirements emerged victorious. Crafting fresh approaches to optimize talent utilization facilitates a more responsive organization.

4. Work and Workplace Driven by Purpose

In recent years, a new role has emerged for HR as a "Culture Architect and Community Activist." Employees are placing greater emphasis on the culture of organizations and their commitment to the values they promote.

Nowadays, workers are looking for employers that offer a sense of purpose and fulfillment, either through the work they do or through shared beliefs with the company. Therefore, organizations will strive to showcase their values and communicate to their employees and customers what the brand represents.

5. Managing Workplace Burnout and Mental Health Issues

During the initial two years of the pandemic, people worked excessively long hours as the boundaries between work and home became increasingly blurred. As a result, workplace burnout has reached unprecedented levels, and there has been a significant rise in depression and anxiety, leading to $1 trillion dollars in lost productivity, according to the World Health Organization.

To address these challenges, we need to adopt more realistic expectations for our employees and emphasize the importance of taking time off. Additionally, we must offer support for burnout, stress, and mental health issues that impact well-being and, ultimately, productivity.

6. Digitization of Human Resources

Before the pandemic, there was a 10-year transition towards digitization in HR, aimed at enhancing the employee experience and increasing personalization. The pandemic accelerated this timeline, with digital transformation projects that would have taken three years being completed in three weeks.

Although significant progress has been made, many companies are still not using available technology to improve their operations. For instance, new talent analytics tools can assess an employee's pay band, tenure, engagement scores, time off, etc., to identify potential turnover risks. Managers receive a list of at-risk employees and a set of specific actions to reduce their turnover risk.

A tight labor market, inflation, and a possible recession pose challenging business conditions ahead. HR can respond by optimizing their existing talent pool through strategies that better leverage internal resources, engage and support employees to increase productivity, and enhance the overall employee experience. Engaged employees are more productive, experience less stress, and are less likely to leave the organization.