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2023 HR Trends: How Brokers Can Add Value

ExtensisHR9 minute read

Quick look: Some normalcy may return to the HR landscape in the new year, but there are still several issues employers must prepare for. From hundreds of new laws to an increased focus on learning and development, here are the top HR trends to expect in 2023, according to David Pearson, ExtensisHR’s SVP of People and Culture, and how a PEO can help brokers give clients the solutions they need.

In 2022, just like the two years preceding it, small- and medium-sized businesses (SMBs) relied on their flexibility and adaptability to succeed. For brokers, that meant staying knowledgeable about the issues facing SMBs and which solutions could solve those pain points was a priority.

While certain aspects of human resources (HR) are expected to normalize more in 2023, several trends will require employers to remain agile. Brokers need to stay on the pulse of these developments to know how to help their clients remain competitive and successful.

To help you prepare, here are the top 2023 HR trends brokers should know about and how partnering with a professional employer organization (PEO) can help you meet your clients’ ever-changing needs.

1. Help improve the employee and job candidate experiences

Next year’s HR trends will likely boil down to one key question: “how can employers best attract, develop, and retain workers of all levels?”

Willis Towers Watson’s 2022 Global Benefits Attitudes Survey revealed that 44% of employees were job hunting during 2022. That percentage is expected to drop in 2023, but optimizing the experience both job candidates and workers have come to expect will still be a priority for your clients.

Enhancing the hiring process

Improving the hiring process can include training hiring managers and other interviewers on proper interview protocol and unintentional bias. And it’s expected that current employees will value a strong company culture, tailored benefits, professional development, and impactful diversity, equity, and inclusion (DEI) initiatives.

Defining what “work” means

Clients spent much of 2020, 2021, and 2022 recalibrating and adjusting operations to stay afloat. However, in 2023, employees and potential talent will expect them to be able to answer the question, “what is work like here?”

Employers should officially define if their workplace is hybrid, in-office, or remote. And if it is hybrid, should workers report to the office once a week, once a month, or can they come and go as they please? The HR experts at a PEO can help SMBs prepare these policies, confirm that they are fair and equitable to all staff, and update their handbooks accordingly.

Prioritizing leadership

As the years pass, it can be easy for organizations to inadvertently delay supporting the professional development of their leadership teams. However, growing the skill sets of these critical employees is slated to be a major 2023 HR trend.

SMBs’ leadership teams drive their businesses forward and are responsible for implementing critical strategies and contributing to the company culture. To successfully do all this, leaders must continuously build their skills, stay updated on industry trends, and seek mentorship.

The average tenure of C-suite employees is just over five years. These leaders used to have a relatively low turnover rate, but there has been a recent increase in them leaving due to mergers and acquisitions and return-to-office mandates. Employers can avoid losing these impactful employees by tuning in to their needs and investing accordingly.

2. Assist with enhancing development opportunities

The business landscape is transforming at an accelerated rate, and skills gaps are one of the most significant problems for many clients today.

As such, a well-rounded learning and development (L&D) strategy will likely be on their radar in 2023. Supporting this prediction, Korn Ferry’s Future of Work Trends 2022 report found that 37% of professionals state that reskilling and upskilling current staff is their top tactic for addressing the labor and skills shortage.

Employers can experience skills gaps due to having new or under-skilled employees. To remedy the issue, business leaders must identify gaps within the overall company and with specific individuals and determine which tools or training programs can help. This could entail implementing a new technology platform, enabling employees to earn additional certifications, or hiring to meet specific remaining needs.

This emphasis on professional development can be rewarding. When organizations invest in their staff, those workers will likely invest more in the company. And business leaders should keep in mind a phenomenon called “grow or go,” which describes the situation when employees who can’t develop at a certain company change jobs and gain that experience elsewhere.

As SMBs hone their L&D strategy, something a PEO can assist them with, they should also consider the difference between a career ladder and a career lattice. Career ladders entail traditional, linear movement through a career track, while carrier lattices involve lateral, sometimes minor, adjustments that significantly improve a worker’s long-term profession. Career lattices are slated to become a stronger focus in 2023 and beyond as SMBs tweak their L&D plans to satisfy individuals’ development needs.

And while a strong L&D strategy can safeguard employers from a mass exodus of employees, they must also realize that some turnover will always occur. Succession planning can help them prepare for this, and they should identify successors for key contributors and task those essential workers to share their institutional knowledge with prospective replacements.

3. Offer improved technology

Many of the major 2023 HR trends revolve around technology, likely due to the accelerated digital transformation sparked by the COVID-19 pandemic.

For example, labor shortages caused a greater need for automation, and clients should evaluate which tasks they can automate to save time. Automation tools can also increase their employees’ job satisfaction, as being able to offload tasks can help workers spend their time on more meaningful and enjoyable projects. However, the number of automation tools and technology platforms can be overwhelming, and business leaders should first identify what is needed and how to deploy it and improve it over time. Additionally, SMBs can look to their PEO partner to provide an HR tech platform that enables them to securely manage critical tasks like payroll, benefits, recruiting, and compliance from any device.

Another development impacting SMBs’ technology needs is the increasingly multistate and international workforce. A dispersed work environment makes workforce management and digital productivity tools essential. And to confirm optimal operations, employers should use clearly defined objectives and key results (OKRs) and performance indicators—if they can’t measure it, they can’t manage it.

4. Suggest risk and compliance services

Countless new HR and employment laws were unveiled in 2022, and that trend will continue in 2023. More than 350 new compliance regulations are proposed for the year, with more than 130 taking effect in January (and 25 of those are for New York and New Jersey alone).

These laws’ topics span from salary transparency to non-disclosure agreements. With so many new risks penciled in for the new year, brokers should consider recommending their clients partner with the risk and compliance experts at a PEO to help them avoid non-compliance.

5. Provide mental health resources and benefits

Mental health benefits are becoming the norm, not a novel perk, and your clients’ staff will likely continue to demand much-needed support in 2023.

According to Aflac’s 2022-2023 WorkForces Report, nearly 60% of U.S. workers are experiencing moderate or higher levels of burnout (even higher than 2021 and similar to 2020 levels). It’s critical for business leaders to identify where and why burnout is happening within their organization. Clearly and regularly communicating available benefits like telehealth therapy sessions and access to an employee assistance program (EAP) (all of which can be made available through a PEO) to their staff is equally important.

Finally, employers must consider their HR and leadership teams’ needs while crafting a mental wellness plan. Many of these workers have experienced severe burnout during the last few years and should be encouraged to take care of themselves in the new year.

6. Align them with DEI tools

DEI isn’t going anywhere. In fact, it’s expected to remain one of the key 2023 HR trends. However, one size doesn’t fit all, and clients must realize that their DEI initiatives need to meet their organization’s specific needs.

The foundation of any sound DEI strategy is awareness. Business leaders should analyze their employee data, identify DEI gaps, and determine how to correct them best. ExtensisHR’s DEI Dashboard can simplify this process for them by revealing real-time data on hiring, firing, pay equity, promotions, and more across multiple worker demographics.

7. Encourage them to take a stand

Today’s top talent wants to work for employers whose values align with their own, and if your clients need a crystal-clear mission and set of core values, 2023 is the year to establish them.

Ideally, organizations should define and communicate what they stand for so that staff and job candidates can determine if they are a good fit for the company. They should also confirm they have posted their core values in the office and on their intranet and public-facing website.

Businesses must walk the walk, not just talk the talk, and participate in corporate responsibility and giveback programs. Current and potential employees will easily read between the lines to determine whether your clients stand by their core values.

8. Help them remain adaptable

Employers’ ability to quickly pivot was a necessity in years past and will be in 2023, as well.

Economic uncertainty and a competitive labor market will require SMBs to be agile and intentional with their strategies. Clients will need to understand where they should invest and be able to answer questions like, “should we spend more on our benefits this year to attract top talent and retain current workers?” Identifying these issues and potential solutions will be key to their success in the new year.

Partner up and persevere

The challenges facing SMB leaders are varied and constantly in flux. And because many of them are experiencing a lack of time and resources, they turn to their brokers to help them develop a roadmap and practical solutions.

By partnering with a PEO like ExtensisHR, brokers can keep a pulse on industry developments and rely on a team of HR professionals to effectively strategize and execute plans designed to keep clients competitive.

ExtensisHR proudly adopts a broker-centric philosophy and provides a comprehensive set of HR solutions:

Want to start the new year strong with the partnership of a PEO that’s prepared to help your clients conquer all the 2023 HR trends? Contact ExtensisHR today to learn more.

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