In the past years, employee expectations have changed like
never before. Did you know that employees trust their CEO
more than government leaders? Or that digital transformation
advanced by half a decade in the aftermath of the pandemic?
The value that HR traditionally provided has
been turned upside down. That’s why, in 2023, HR will
have to reinvent itself. If HR steps up to the plate and
seizes this window of opportunity, it stands to
create incredible value for both the organization and its employees.
*MUSIC*
To explore how to go about this, I teamed up with Erik van Vulpen,
founder of AIHR and HR expert, to
identify some of the trends that will shape the future of
HR and will help you navigate yourself and your HR team into
the year 2023. And, if you stick around to the end of the
video, Erik will highlight the most important skill that HR
professionals need in 2023. Thanks Neelie! We’ve
identified eleven trends that will significantly impact us
in 2023. Now that’s not all… We’ve categorized these into
three overarching themes that help us understand some of the
forces that are shaping the world of work. Our first
theme centers around the changing expectations between
the employee and the employer. The psychological contract has
changed and this is reshaping the employee value
proposition. This means that 2023 is the year in which we
will have to revamp the value we offer our employees. Our
second theme looks at where work takes place. Work is
going beyond employees & the organization and includes a
contingent workforce, supply chain partners, as well as a
digital metaverse. This has far-reaching consequences for
how we practice HR. Our third theme is the changing role of
leadership. This includes leadership in the organization
but also leadership in HR. We will address the changing role
of the CHRO, as well as the challenges for line managers,
and how we should deal with robot managers, which is a
trend that is likely to impact most large organizations in
2023 already. But before we start talking about robots and
algorithmic managers, let’s dive into our first theme,
which is about the changing expectations between the
employee and employer. The psychological contract is
changing in more than one way. Let’s start with expectations
around employee wellbeing. Wellbeing has been
front-and-center in our HR policies since the pandemic.
This will only become more relevant with a looming
recession, war in Europe, and rising cost of living across
the globe, creating uncertainty and stress. That’s
why in 2023, HR’s focus will be on total wellbeing. Total
wellbeing is a holistic approach, focusing not just on
physical but also on mental and financial wellbeing. This
includes investments in a culture of acceptance around
mental health, creating an inclusive workplace for people
with physical disabilities, implementing stricter
work-life balance policies, initiatives to build financial
acumen to help employees manage a rising cost of
living, and actions promoting physical wellbeing.
Focusing on total wellbeing - starting in the often
overlooked HR department itself - is not just the
right thing to do. Not investing in it will impact
the stability of the organization, and, in line
with our theme, employees are expecting the organization to
care about them, now more than ever before. Another changing
expectation is the role of purpose in work. Where purpose
used to be a nice-to-have, we are now seeing that purpose is
becoming a prime directive. Purpose is one of the things
that is valued across generations. Whether it is Gen
Z that is just entering the workforce, or Boomers who can
retire but decide to work a couple more years because they
connect with the company’s goals. Organizations without
a greater purpose will fail to attract and retain top talent.
It is that simple. And if they do attract talent, that talent
is more likely to be disengaged and join the quiet
quitting or lying flat movement Beyond purpose, there
is inclusion. Employees expect employers to create an
inclusive environment that fosters a sense of belonging.
Despite this, organizational leadership is still too often
white and male. This needs to change. Embedding DEIB into
all our HR practices is again both the right thing to do and
it helps us create a more enticing employee value
proposition, attract scarce talent, and build a naturally
diverse workforce. Diversity initiatives now focus mostly
on recruiting, but getting people in is not enough. We
need to ensure that every person can contribute their
unique gift in a way that feels safe and is inclusive.
To do this, HR organizations adopt DEIB across the HR value
chain, in onboarding, leadership development,
promotions, benefits, and so on. 2023 is the year in which
we will start addressing racial disparities in
company-provided healthcare, boost managerial diversity,
tie executive compensation to diversity metrics, and so on.
A kind of diversity we don’t speak enough about is
diversity in work activities. There has always been a clear
divide between deskless workers on the one hand, and
white collar workers on the other. The pandemic only
emphasized this. Where deskless workers were fighting
the pandemic on the front line, as nurses, in
supermarkets, or processing food on an assembly line,
white collar workers were doing so from the comfort of
their homes. Deskless workers are also hit hardest by the
cost of living crisis. This is driving discontent. We’re
seeing strikes and record levels of resignations amongst
deskless workers. One in twelve already switched,
either to study or to a cushier job. Another 37% is
considering leaving their job in the next six months —
unless things change. Deskless workers should have similar
opportunities as their white collar counterparts, including
career opportunities and access to technology. The
great news here is that HR technology for deskless
workers is booming. So creating a great – or at least
a greater – place to work for deskless workers will be
another one of HR’s focus areas in 2023. Before we move
on to our second theme, I want to touch on one last changing
expectation, which is the role of learning. In 2023,
organizations will invest heavily in strategic learning.
This is the development of those skills that are aligned
with the capabilities the organization needs to be
competitive. This can include technical skills, like
automation, AI, and business intelligence, as well as soft
skills, like communication, time management, and critical
thinking. 2023 will be the year in which organizations
invest in implementing these skills in the flow of work.
Again, not just because it is good for the organization, but
also because it provides perspective and opportunities
for employees. This is yet another great way in which HR
can do good for employees while advancing the
organization’s goals. As I already said, at the end of
this video, Erik will talk about the most important skill
for HR professionals in 2023, so stay tuned! That brings us
to our second theme which revolves around where work
happens. In other words, what is our place of conduct as HR?
Is that just our organization, or does it go beyond the
organization? Spoiler alert: the next three trends show
that in 2023 HR will go beyond the organization and its
employees. First off, there is the physical location where
work happens. Too many organizations are still caught
in two minds with unclear working policies. We need to
get clear on whether we want to work in the office, hybrid,
or remotely, and, if that’s not yet the case for your
organization, 2023 will be the year in which that will
happen. At the academy to innovate HR, we think that it
is not an option to fully work from the office if it is not
needed for your job. Take a look at this statistic. Remote
jobs posted on LinkedIn made up less than 20% of all paid
job postings, yet received over 50% of all applicants.
Not allowing a hybrid or remote work policy will hold
your organization back. Next, we expect that HR will go
beyond employees in the traditional sense of the word.
We believe that 2023 is the year in which HR will start to
actively and holistically manage its contingent
workforce, including contractors, gig workers, and
external contributors. If we believe that our HR practices
add value and increase worker productivity (and we do), they
should all be included in our HR value chain. We call this
trend managing workforce ecosystems. But there’s more.
We also expect HR to start sharing best practices across
the end-to-end value chain. If the pandemic has shown us
anything, it is that value chains and value chain
partners are crucial, for supplying materials, but also
for reputational purposes. Take Rihanna’s fashion label,
Fenty Beauty, which was accused of using child labor
in its supply chain. This shows that the HR practices of
your supply chain partners impact your reputation. So HR
will manage its workforce ecosystem, not only by
including its contingent workforce, but also by sharing
best practices outside of the organization. This is a way in
which HR can deliver value to the organization by going
beyond its traditional role. And third, HR will also move
into the metaverse in 2023. According to Gartner, 25% of
people will spend at least one hour per day in the Metaverse
by 2026. Applications include virtual events, employee
onboarding, career fairs, as well as meetings. The
metaverse allows us to reinvent the way we conduct
these meetings. HR can reimagine a productive,
collaborative, and creative work environment that is
unrestrained from physical norms. This also allows for a
more equitable playing field for people with disabilities.
This wraps up our second theme, which shows that the
area in which we operate in HR has expanded. In 2023, work is
not just done in the office by employees. HR’s reach will
extend into the contingent workers, but also include
supply chain partners. With employees working increasingly
remotely, the reinvention of the digital workplace, in the
form of the metaverse, is another key trend for 2023.
This brings us to our third theme, which is leadership.
When we examine leadership - both in the organization but
also in HR - we discover our last three trends. First, the
rise of algorithmic HR. 2023 is the year in which the
majority of large organizations will start to
manage employees with robots. 80% of Global 2000 companies
will use algorithmic managers to attract, hire, train, and
fire by 2024. These HR robots will be able to complement the
manager and act like a sounding board. They will have
access to much more information than the manager
does at the moment, providing input for complex decisions.
This creates a responsibility for HR as well. Algorithmic
decision-making runs the risk of having existing biases
embedded in its decision-making models. At the
same time, it also provides us with an opportunity to create
systemic equity in the literal sense of the word - creating a
system that is equitable and that makes work more
inclusive. Now it’s not only robot managers that are
evolving. The role of the CHRO is also evolving. This has a
couple of reasons. During times of crisis, like the
pandemic, the war in Ukraine, and a rising cost of living,
the board looks at the CHRO to lead and respond to the
crisis. This has propelled CHROs into becoming one of the
key leaders of the organization. Add to this the
fact that in today’s world, employees have more faith in
their own CEO than in government leaders,
journalists, or other business leaders. 60% of employees
expect their CEO to speak out on social and political issues
they care about. This means that the CEO’s role is also
changing, creating room for the CHRO to understand
employee sentiment better, and counsel the CEO on when to
speak up and what to say. And last, we look at leaders in
the organization. During the great resignation, many high
performers have been promoted into managerial positions in
an attempt to retain them. This means that today’s
leadership pipeline is filled with new candidates with
little to no managerial experience. Developing the
next generation of leaders is a top challenge for 55% of
CEOs. And for good reason! Organizations providing
high-quality development experiences are 1.5 times more
likely to have high leader engagement and retention
rates. This is why our last trend for 2023 is that HR will
significantly increase investments in upskilling
leaders and managers. HR will clearly identify and
communicate leadership expectations, and build the
skills needed for leaders to succeed. To do this, HR will
invest in leadership development programs,
training, mentorship, on-the-job immersive
experiences, and talent rotation strategies to
fast-track exposure, experience, and skill
development. At the same time, HR will remain connected
to the employee voice and advise organizational leaders
on how to lead and where to speak up. Upskilling leaders
and managers is one of the most crucial ways in which HR
will add value to the organization. By ensuring the
business has excellent leadership, HR is helping
safeguard continuity, boost retention, and improve
organizational performance in the long run. This will have a
major impact on the business, not just in 2023, but far into
the future. That brings us to the end of our eleven HR
trends. But before we go Erik, I promised that you would
share the most important skill for HR professionals in 2023.
Yeah, I actually have two skills that I think are
crucial for 2023. These are awareness and agility. Let’s
start with awareness. This is about continuous listening,
which is crucial not just inside the organization, but
also outside of the organization. We’ve talked a
lot about reinventing the employee value proposition in
our eleven trends. This can only happen by listening to
employees and finding out what they care about. At the same
time, I expect 2023 to be a volatile year. Inflation is
high, there’s an unpredictable job market, and a recession is
looming. All of this will impact our people policies and
budgets, so HR needs to be aware of these developments.
Our second skill is agility. It’s one thing to be aware of
employee and market sentiment, it is another thing to take
action on it. This requires agility. That same agility
will also allow HR to step up to the plate and seize 2023’s
window of opportunity. When times and expectations are
changing, HR has the opportunity to be agile, be
leading, and help drive how the organization attracts,
retains, and manages talent. That is the true power of HR:
driving strategic impact through people. That’s why I
think awareness and agility are the two skills to work on
in 2023. And with that, we wrap up our eleven trends. Our
themes revolved around the changing expectations between
changing role of our leaders in 2023. Now before you go,
don’t forget to subscribe and like the video. We have weekly
videos about the world of HR coming out that you don’t want
to miss. Also, we would love to know what you think of
these trends - and what other trends you see emerge in the
world of work. Let us know in the comments down below! And
if you’re interested to read the full HR trends report,
check out the link in the description of this video.