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10 Workforce Trends Predictions for 2023

Quick look: Another year has come and gone, and the time is now to prepare for 2023. Several new workforce trends are expected to make a splash in the coming months, and businesses must remain flexible and ready to adjust operations as needed. From reimagined learning and development programs to addressing the burnout prevalent among HR staff and leadership, here’s what to expect in 2023, according to ExtensisHR’s SVP of People and Culture, David Pearson.

Just like in 2020 and 2021, businesses relied on their agility to stay afloat in 2022. The COVID-19 pandemic remained a backdrop for the year’s workforce trends, with the Great Resignation sparking recruiting and retention priorities and a dispersed workforce causing companies to manage a mixture of hybrid, remote, and in-office staff. For almost three years now, business leaders and HR professionals have had to navigate these uncharted waters without a finite playbook, which has led some to become burnt out.

Luckily, normality is expected to return to the 2023 business landscape, but the pivoting that’s acted as a lifeline to businesses will need to continue. Here are the top 10 workforce trends to expect in 2023, according to David Pearson, ExtensisHR’s SVP of People and Culture, and how organizations can prepare.

1. Honing the candidate and employee experience

Enhancing the experience potential talent and current staff have with an organization tops the list, with a critical overarching question in 2023 slated to be, “how can we best attract, develop, and retain employees at all levels?”

Nearly half of workers job hunted in 2022, and while that figure is expected to drop in 2023 due to economic factors, enhancing the candidate and employee experiences will remain vital to organizational success.

Improving the candidate experience entails streamlining the hiring process and training managers and interviewers to avoid unintentional bias and follow appropriate protocol. Meanwhile, a strong employee experience hinges on several factors, like company culture, employee benefits, diversity, equity, and inclusion (DEI) initiatives, and learning and development opportunities.

2. Leaning on learning and development

Skills gaps are one of the largest threats to today’s businesses, making a well-versed learning and development (L&D) strategy key. In fact, Korn Ferry’s Future of Work Trends 2022 report states that over one-third of professionals say reskilling and upskilling current employees is the top way they are addressing the labor and skills shortage.

Whether a business faces skills gaps due to new employees or under-skilled ones, closing the gap is a must. To do so, organizations must identify what gaps exist (both organization-wide and with individuals) and how to develop training programs to bridge the difference. This could look like rolling out a new technology throughout the business, helping certain employees obtain additional certifications, or, in some cases, hiring to meet specific needs to ensure business maturity occurs.

There are many rewards to be had by developing employees. By investing in your workers, they’ll invest more in your business. And in a situation sometimes referred to as “grow or go,” employees want career mobility, and if they can’t develop at your company, they’ll gain that experience elsewhere. Businesses need not be shy about helping employees build their resumes—some workers will leave regardless, but if you build them up, they’re more likely to be retained.

As companies craft their L&D strategy, they should consider the difference between a career ladder and a career lattice. While career ladders describe traditional, progressive movement through a career track, carrier lattices encompass lateral moves and slight adjustments that may not be inherently upward but enhance someone’s profession in the long run. These lattices are predicted to become a focus in 2023 as organizations adjust their L&D approaches to satisfy individuals’ development needs.

It’s also important to accept that some turnover is natural, making succession planning critical. To prepare, business leaders should identify successors for key staff and task those essential employees to share their institutional knowledge with their potential replacements.

3. Investing in technology

The pandemic accelerated digital transformation, and technology will continue to be a major player in the human resources (HR) industry in 2023.

Automation is needed more now than ever due to labor shortages, and employers must consider how they can automate certain tasks to save time. These tools can also increase job satisfaction, as employees can offload tasks that take away from critical projects and more enjoyable initiatives. To take advantage of the benefits of automation, business leaders should take the time to make a strategic investment by identifying what’s needed and how to deploy it and enhance it properly over time.

Another trend affecting the rising need for new technology is the growing multistate and international workforce. A widespread employee base makes tools to better manage a distributed workforce and digital workplace productivity essential. Additionally, businesses must have clearly defined objectives and key results (OKRs) and performance indicators to confirm whether productivity is occurring. After all, if you can’t measure it, you can’t manage it.

4. Clearly defining work environments

2023 is expected to be the year that businesses define what work is like at their organizations. In other words, companies should prepare a solid definition of their work environment. Is your organization hybrid? In-office? If hybrid, will employees report to the office once a week, once a month, or can they come and go as they like?

Today’s workers expect employers to have concrete answers to these questions. In crafting the definition of work at your business, you should ensure that your policy is fair and equitable to all staff and that all guidelines are clearly stated in your employee handbook.

5. Adjusting to new compliance laws

Many new HR and employment laws were introduced in 2022, and the new year will be no different; over 350 new compliance regulations are proposed for the year, with more than 130 taking effect in January (about 25 of which are for New York and New Jersey alone).

These laws’ topics range from minimum wage and pay equity to non-disclosure agreements and marijuana in the workplace. With so many new risks on the horizon, it’s wise for businesses to consider leaning on a professional employer organization (PEO) in 2023 to help them navigate it all and avoid non-compliance.

6. Focusing on mental well-being in the workplace

Recent years have taken a toll on almost every person’s mental health, and employees will continue to turn to their companies to provide much-needed support in the new year.

The 2022-2023 Aflac WorkForces Report revealed that almost 60% of U.S. workers are experiencing moderate or higher levels of burnout (even higher than 2021 and on par with 2020 levels). To address this, employers should identify where burnout is happening within their organization and why.

Additionally, it’s critical that businesses adequately communicate available benefits to their staff, especially mental wellness programs like telehealth therapy sessions and access to an employee assistance program (EAP).

While considering how to address mental health in the workplace, business leaders must consider the needs of their HR and leadership teams. After years of stress, these employees are experiencing extreme burnout and need to put themselves first to bring their best selves to work.

7. Building DEI into the fabric of the company

DEI will continue to be one of the many important workforce trends in 2023. Companies planning their DEI strategies should remember that one size doesn’t fit all, and DEI will look different for each organization.

Awareness of inequalities within your workplace is crucial. Employers should look at their employee data, identify DEI gaps, and decide how to correct them appropriately. A tool like ExtensisHR’s DEI Dashboard can simplify this research by revealing real-time data on hiring, firing, pay equity, promotions, and more across multiple demographics.

8. Prioritizing core values and company culture

Today’s workers want to feel that they have a purpose and that their values align with their employers’. That makes it essential for businesses to determine their mission and core values.

To do so, companies should define and outwardly express what they stand for so that employees and job candidates can determine if they are a good fit for the organization. During this process, business leaders should consider how they are marketing their business and its core values to potential candidates and current staff. Are you posting your core values in the office, on your intranet, and communicating them on your website to potential talent?

It’s also critical for organizations to practice what they preach and determine how they will take part in corporate responsibility and giveback programs. Top talent will easily read between the lines to determine if your business abides by its core values or if they’re simply empty words.

In terms of company culture, in-person networking and corporate events are expected to make a complete comeback in 2023. After years of virtual events and working from home, many people desire face-to-face interactions, and businesses are slated to invest more heavily in these types of experiences.

9. Strengthening company leadership

Developing every level of staff within an organization is important, but sometimes, especially in recent years, the professional growth of leadership gets lost in the shuffle.

Leadership drives the business forward, executing critical strategies, and establishing the company culture. To effectively do all these things, leaders must keep current with industry trends, invest in themselves, seek mentorship, and continuously build their skills.

The average tenure of C-suite employees is 4.9 years. While traditionally, these leaders experienced a low turnover rate, there has been a recent uptick in C-suite employees leaving their organizations due to mergers and acquisitions and a return to the office. By investing in developing these valuable workers, companies can avoid the substantial business impact caused by their leaving.

10. Being agile!

The wise Ross Geller once said, “pivot!,” and businesses should follow that advice in the new year and beyond.

Economic uncertainty and a still-turbulent labor market will require organizations to be agile, quickly pivot if necessary, and remain extremely intentional with their strategies. And while specific industries, like client services, will always be needed, every company needs to understand where it needs to invest. Should you spend more on employee benefits to attract job candidates and retain current staff? Are your workers spending substantial time on repetitive, time-consuming tasks that could be offloaded to automation technologies? Identifying these issues and potential solutions will be key to success in 2023.

Keep up with workforce trends—without the worry

The new year is a time to start fresh and reevaluate where your business stands and the best ways to navigate any new workforce trends. And while most organizations wish to improve their strategies and tactics, building and implementing a roadmap can take more time and resources than many small- and medium-sized businesses (SMBs) have.

A PEO, like ExtensisHR, can help companies keep a pulse on HR developments and effectively strategize and execute plans designed to keep organizations competitive. For example, a partnership with ExtensisHR provides SMBs the following:

Could you use some help preparing for the workforce trends coming your way in 2023? Reach out to the experts at ExtensisHR today.

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