The pandemic has forced us to rethink work in a post-pandemic world. We've seen a shift to hybrid and remote work, inclusion initiatives, and engagement. HR and People Operations leaders like yourself are looking for ways to learn, share, and connect as we tackle the biggest challenges facing HR in a fast-changing future.
The Top 11 HR Trends to Watch in 2023 are: hybrid work, inclusion, engagement, employee experience, remote work, human-centered HR technology, compensation innovation, career development, advanced people analytics, pay-for-performance, and benefits innovation.
As we move into the new year, it's important to keep an eye on the latest HR trends. Here are the top 11 HR trends to watch in 2023:
1. Hybrid work
As more and more companies adopt hybrid work models, HR will need to adapt to this new way of working. It is a compromise to calling back your workforce to the office who may still be fully working remote. Examples of these models include floating hubs, centered hubs, and slanted hubs. Use these models as a starting point to design an employee experience that supports this new way of working. And trust needs to go both ways for the Hybrid work model to take place.
Hybrid work lets you have more freedom while still staying connected, which is what a lot of workers want today. However, hybrid work is still a work in progress. If leaders work with employees to make it more human, it can be the best of both worlds. Recent data back this leading trend up:
For ideas on how to implement Hybrid, see the piece on 4-day workweeks, which discusses rotational days off and more.
2. Workplace Inclusion
Inclusion has emerged as the number one business imperative for HR leaders. The pandemic has created unprecedented levels of diversity in the workforce by expanding access to remote workers across the country and world—whom may have never been considered before. And with the growing focus on inclusion and diversity in the workplace, HR will need to ensure that all employees feel included and valued.
Not long ago, the ROI on inclusion to be massive by HBR:
- 15% better financial performance from gender-diverse organizations
- 35% better financial performance from ethnically-diverse organizations
- With each 10% increase in diversity on executive teams, companies experienced an 8% increase in profitability
Be sure to start with human-centered work practices that recognizes employees for their positive efforts and work. As people leaders, we need to ask ourselves: “How might we take care of this new workforce?"
Inclusion naturally also involves a multi-generational workforce and provide benefits to them as well. That inclusive spirit should extend to how organizations deal with change. How do we include those that don’t want to change? How do we include all the different people in our organization and still drive change? That’s a huge challenge and a massive opportunity for organizations.
3. Employee Engagement
Employee engagement is key to a successful workplace. And with 70% of employees surveyed in the latest Workforce Institute’s Engagement and Retention Report stating they would be looking for new jobs, it could mean major turnover.
While employee engagement has been a buzzword for years, it has recently grown in importance. There is increasing evidence that shows a correlation between engaged employees and better business results. It's important to note, however, that employee engagement and employee experience (EX) are not the same thing. As Christie Hoffman, host of the Flip Flops and People Ops podcast explains it:
"Engagement is an output of optimizing your employee experience. By listening to your people with surveys and taking action on their feedback on what it's like to work at your company, you'll drive engagement."Christie Hoffman, Head of Product Marketing at Pingboard and Host of Flip Flops & People Ops
As companies implement more AI and automation, they will increasingly rely on human engagement to successfully launch and grow these initiatives. Therefore, HR leaders must seek ways to learn, connect, and share knowledge as they confront the most significant challenges facing HR in an ever-changing future.
Better engagement can lead to increased productivity, lower turnover, greater customer satisfaction, and better retention of knowledge and skills. As a result, HR must find ways to keep employees engaged and motivated. Depending on your business requirements, platforms like Lattitude, Culture Amp, and Pingboard can help you achieve this.
4. Employee experience
It is table stakes to prioritize your employees' experience within your organization. Employee experience (EX) has been a key topic of discussion in recent years. However, there is still some confusion about what it actually entails, and the difference between EX and employee engagement as Christie mentions above. From attracting top talent to onboarding and beyond, employee experience encompasses the entire employee lifecycle.
The best brands create incredible employee experience by creating a culture of great service for their customers and clients—and this starts with our employees. This extends to the workplace and how you manage benefits, compensation, and culture.
Looking to transform employee experience at your organization? Explore our 2-minute micro-course on EX transformation best practices.
5. Remote work
With more and more employees working remotely, HR will need to find ways to support this growing.
The number of full-time employees that work entirely remote reach new highs, but not as much as 2020 during the start of the pandemic due to the return to the office and especially hybrid work. Regardless, remote work is here to stay forever.
According to a Ladders research, projections that 25% of all professional jobs in US and Canada will be remote by the beginning of 2023. This recently increased to 36% in its Q3 2022 Quarterly Remote Work report.
With the cost of living increasing and housing costs skyrocketing in many cities, remote work is continuing to be possible for more people. There are even some situations in which it is required, such as when an individual or their child are ill and need special care. The requirement to be physically present at work is becoming less normal than it once was.
Working remotely offers many benefits, including a lower cost of living, greater personal time management, and enhanced work/life balance. It can be a better work-life blend and improve the quality of life for employees and their families.
6. HR technology
Systems and tools for HR will continue to transform the way we work. From talent acquisition, workforce and HR analytics, job bots, new applicant tracking systems (ATS) and job boards, to AI-powered solutions and more.
HR technology is a critical component of the modern People Leader in the digital workplace. It’s not surprising that an overwhelming majority (85%) of the HR professionals surveyed said they plan to invest in or already have invested in AI-powered HR solutions.
Technology may even have the power to enable AI-first organizations to grow at even greater speed. From Learning & Development, such as an AI-powered micro-course authorship technology. We use it to create training and development course materials — and you can give it a spin with a free 14-day trial from our affiliate 7taps. See our micro-courses for HR here for examples.
7. Compensation innovation
While the good news is that pay satisfaction is at an all-time high, the fact remains that many organizations did not change their compensation plan in 2022. Compensation salary plans, executive pay and compensation, and the overall compensation structure is ripe for innovation. Coupled with performance evaluation trends, HR expert Harold Strong, MBA spoke with us about this need recently.
"New performance evaluation strategies are needed, and should factor in that to be attractive to potential future talent, and to retain top performers—a lot needs to happen."Harold Strong, MBA, Human Resource Consultant & Adjunct Business Instructor
The good news is that compensation is not at the top of the list of why employees leave organizations; it is #3, right behind how their manager treats the employee, and the lack of upward career mobility via promotions. That said, 75% of employees say they would leave their job if they were offered a salary increase. This means that your compensation strategy needs to be improved if you don't want to lose your employees.
8. Career development
Career development refers to the planning and programs that help employees grow both within a given role and within the company. Consider a mentorship program to match people in your organization up with others across departments. It's proven that accessing talent through mentorship will give your employees the career development they need.
"Going into a new role, guns blazing and trying to make changes before truly understand what is happening and what is needed. Be honest with yourself 'I don’t know everything. I don’t know everybody. I don’t know really what the most important things are not going to change every single thing.' Seeking first to understand is paramount to influence any kind of change, any kind of development, any kind of transformation, organizational, cultural change. Being sponge mode first, whenever you get into these new scenarios and situations."Pete Schramm, CEO at Lattitude
Related: explore the Good Jobs Guide
9. Advanced workplace analytics
The forward-leaning HR leader will not only deploy, but also integrates and uses human resource analytics to better understand, predict, and improve performance. As HR departments in remote-first and hybrid workplaces evolve, we are seeing an increasing use of data-driven approaches. After all, data is the infrastructure of employee experience. And HR data is a prerequisite for employee experience transformation, according to Luka Babic of people analytics platform Orgnostic:
"HR remains the only sort of feeling-driven function — and that isn't ideal because it is not being factored properly by the rest of the executive leadership team and to an extent the result of talent as well. And I think that's the kind of a chasm — HR leadership needs to adopt this kind of mindset, that we need to build a data-driven function... because management is usually appreciating that kind of approach."Luka Babic, co-founder and CEO of Orgnostic
For quickly getting your HR analytics to the next level, consider one of these Top 10 HR dashboard examples you can use today.
10. Pay for performance
The global pay-for-performance index indicates that nearly a third of organizations do not have a pay for performance strategy, while 53% have a moderate to high level of compensation variability. For companies who want to drive higher performance, the question is “How?” not “Should we?”
11. Benefits innovation
Benefits innovation means offering benefits that deliver real value to employees and employers in terms of quality and/or cost, thereby reducing the impact of expenses on employee satisfaction and performance.
Thanks for reading my 1st annual HR tech trends report! For even more explore what The Future of Work looks like and this read on Re-imagining the Workweek.