Human resources (HR) leaders have been facing an unprecedented amount of disruption as the last three years have brought around an entirely new world of work—a trend that’s expected to continue into 2023 and beyond.
It’s estimated that the pandemic propelled digital transformation four years into the future according to McKinsey, and this is shrinking the amount of time that HR leaders have between planning and taking action, all while urgent priorities continue to pile up.
With a sudden shift to remote work, mass resignations, skills shortages, economic uncertainty, and major geopolitical events, HR of the last few years has been shaped by some challenging significant challenges that led to the emergence of trends like employee wellbeing, the adoption of flexible working, and diversity and inclusion.
As we head into 2023, we’re likely to see many of the same trends continue and evolve, along with the emergence of some new ones as organizations focus on internal skills development, communication, and relationship management.
HR Trends and Priorities in 2023
Gartner recently conducted an annual survey of more than 800 HR leaders to identify some of the top priorities for HR going into 2023.
The survey, Top 5 Priorities for HR Leaders in 2023, polled chief human resource officers (CHROs) and HR leaders from a variety of organizations and asked them to rank their top priorities for the year ahead.
According to the results, “leader and manager effectiveness” is the top trend among HR leaders, who are also prioritizing organizational design, change management, employee experience, recruiting, and the future of work.
Leader and Manager Effectiveness
60% of respondents to Gartner’s survey said that leader and manager effectiveness is their main priority, with 24% of these respondents also saying that their leadership development approach doesn’t prepare their leaders for the future of work.
As today’s working environment continues to change, leadership must change also. Social and political turbulence, the fusion of work and life, and flexible work arrangements are all redefining the leader-employee relationship into one that’s more human-to-human.
This, analysts say, will necessitate the emergence of more human-centric leaders who have what it takes to lead with authenticity, empathy, and adaptivity. Indeed, it’s adaptivity that will continue to be especially important as employees continue to expect their employers to adapt to and support their unique needs.
Organizational Design and Change Management
53% of respondents to Gartner’s survey said that organizational design and change management is their main priority, with 45% also saying that their employees are fatigued from the relentless pace of change that’s been taking place over the last few years.
HR leaders are switching up organizational design and change management to help them navigate the continued disruption that’s coming as a result of digital transformation, economic uncertainty, and mass resignations. Following years of disruption, however, employees are losing their patience and are becoming increasingly unwilling to cooperate, with some jumping ship due to so-called “change fatigue”.
One way HR leaders can overcome this challenge is by working with employees during periods of change and uncertainty in a way that’s open, collaborative, and involves them throughout the change process rather than simply forcing sudden, untested changes upon them. Organizations that use open and collaborative change strategies are, according to Gartner, 14x more likely to achieve change success as a result and reduce change fatigue among employees by 29%.
47% of respondents to Gartner’s survey said that employee experience is their main priority, with 44% also saying that they believe their organizations don’t have compelling career paths.
It’s estimated that just one in four employees have confidence about their future career at their organization, and the remaining three in four are somewhat interested in looking for alternative roles with new employers.
Alongside compensation as one of the most commonly cited reasons for this are the potential for better professional development opportunities and more favorable career trajectories. In fact, Gartner says that employees left employers for better development opportunities at similar rates as they left for higher compensation.
46% of respondents to Gartner’s survey said that recruitment is their main priority, with 36% also saying that their sourcing strategies are insufficient for finding the skills they need to plug critical skills gaps.
This is something that many organizations have come to realize over the past year amidst an unprecedented wave of resignation activity across all sectors. Recruitment is a candidate’s market right now; they hold all the cards.
It’s a situation that most HR teams have been massively underprepared for and they’re finding themselves struggling to grapple with the reality of low supply and low retention in the current candidate-led, hybrid-driven labor market. There are three new realities that HR leaders must come to terms with going into 2023, if they wish to overcome this challenge:
- The supply of talent is low in traditional talent pools despite surging demand.
- Retaining talent in hybrid and remote environments is more difficult.
- Today’s candidates are harder to attract, convert, and retain.
With this in mind, HR leaders must look to develop new strategies for more effective recruitment and retention, such as building data-led candidate sourcing capabilities and optimizing their recruitment and onboarding processes to meet the expectations of today’s savvier workforce.
Future of Work
Finally, 42% of respondents to Gartner’s survey said that the future of work is their main priority, with 51% saying that their workforce planning is limited to headcount planning.
Workforce planning (WFP) is no easy feat, and the WFP processes that worked previously are no longer guaranteed to help you in today’s environment. Many of the strategies that organizations have relied on for decades are no longer effective in today’s context.
Organizations have, for example, previously responded to shifting skills in the context of workforce planning by assuming that they can predict future skills. They’ve also responded to talent scarcity by assuming they can access enough talent to fill gaps in the workforce.
For reasons already discussed, both these assumptions no longer hold true; we’ve seen how organizations are struggling to attract and retain talent, and how the digital transformation has caught many organizations off-guard in terms of having the right talent occupying the right roles to overcome the challenges that it brings.
Instead of making assumptions surrounding talent, skills, and where and when employees work, HR leaders need to instead consider new approaches. Instead, attempt to anticipate near-term shifts in critical work by evaluating tasks and workflows to anticipate future skills demand, and redeploy tasks flexibly to add slack and resilience in the event of a critical role becoming vacant.