The 8 Main HR Trends for 2023
Have you been reading the various 2023 trends and predictions published over the last month or so?
You may just have decided to ignore all this – things are changing quickly, but they’re not generally changing from year to year (other than when resulting from exceptional shocks like the pandemic).
The trends can also often provide interesting reading, but are never that useful as they still leave organisations with the main challlenges of deciding what the trends mean for a particular organisation and what are they going to do about it, in the context of their own unique context (business strategy, workforce needs, etc).
And of course, just following trends means always just trying to catch up.
However, we do need to ensure our HR plans are rooted in the changing context we work within, and so ignoring trends is as dangerous as just copying them.
In that light, here is my summary of the most important trends (largely taken from the summary provided by Brian Heger) with interpretation from a strategic HR perspective too:
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1. Organisation Design and Change Management
Gartner includes this as a trend, but it doesn’t appear in any of the other lists. However, I don’t think any of the other trend-reporters spend much time in the space. They should do so, and include it on their lists, as it is an increasingly important area (regardless of their particular biases and perspectives).
The trend includes shifts towards more horizontal, self managing, autonomous (including agile) organisation, but that’s just one option from many organisation forms now available to us. Work design is another part of this trend, and should include the work itself (eg process design), different Workforce categories or Ecosystems (including contingent workers), automation and AI, and flexible and hybrid working. The trend should also include Leader and Manager Effectiveness as the greatest leadership challenges is leading different types of organisation, and leading change in a way which is more appropriate for these new forms and the people within them.
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2. People-Centric HR
Most of the lists include something on Employee Experience and / or Wellbeing including Mental Health as well as Listening to the Employee Voice. I’ve also included responding to the Increased Cost of Living, and the Return of Unions within this trend, although I think these are mainly UK things anyway? But as Insight 222 suggest, our responses to these, and to Tackling Recession needs to be through a broader People First approach.
For me, and you’ll know this if you’ve been reading my Linkedin newsletter, and especially my recent article on Employee Created Value, this requires us to progress beyond experience or work related processes and practices, and start introducing activities which help employees meet their own individual aspirations and transformations.
I’m not sure this is really a trend as yet, but I believe everything else that other trend-reporters refer to point the way towards this important realignment of HR.
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3. Diversity, Equity, Inclusion and Belonging
DEIB could be seen as an aspect of people-centric HR, but we do also need to focus on specific and important actions focused on disadvantaged and under represented groups.
Despite this, I am seeing change towards broader inclusion for all staff, helping everyone contribute in their own unique ways throughout the employee lifecycle (hence Insight 222’s suggestion on Organisational Empathy!)
An example is the role of Employee Resource Groups and their expansion into broader organisational communities (including agile guilds) that I wrote about in my 2017 book, ‘The Social Organization’). ERGs have a special role and need to be looked after separately. However, ERGs and communities of performance basically do the same thing just for different types of need, and we can learn from the experience of one to help make improvements in the other.
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4. Digital HR
Digitisation of HR is important, but it’s not as important as HR’s changed role in digital business, which does include our own use of digital technology, plus increasing use of data, analytics and algorithms.
However, the key need is to understand the continuing shifts underway within our businesses as these become more digital, becoming part of or developing ecosystems, getting closer to customers, and making more use of data and technology. This then leads on to many of the trends above and below, with changes in leadership, organisation, and people practices, and in HR capabilities and transformation. This where our own digitisation comes in. However, the main trend here, and it’s obviously a continuing trend, is, or should be, to transform what HR does because of digital business, not just move to more digital HR.
The metaverse is a good example. We can use this ourselves, but the much more important need is to re-vision and redesign our businesses to conduct business in the new VR and blockchain-enabled context.
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5. Skills
This is probably the one properly new trend in the list, though even this has been building for one to two years now. Digital technologies provide us the opportunity to manage skills, and the changing nature of business demands an increasing focus on upskilling (possibly especially for HR, managers and leaders) including, but not just by Reshaping Workplace Learning. All of this puts more focus on skills.
However, and especially as this is a newish trend, skills may well be being over emphasised currently. Skills aren’t the only thing that organisations need, which includes a broad range of other inputs such as particular experiences, interests, engagement, diverse perspectives and so on. And we also really need to build and leverage broader competencies, capabilities or abilities, not just skills – it’s just that digital technologies enable to manage around skills in ways we’ve not been able to do previously. But technology should not drive strategy, at least not without finding ways to accommodate the other needs that technology can’t so easily provide. And organisations that don’t have access to skills based systems should probably be paying attention to shorter lists of higher level and broader capabilities (rather than skills), and managing around these as best as they can.
Skill based reward may catch on, but competency based pay didn’t work that well in the 1990s, and I don’t really see how things are much different now.
And I don’t think the Talent Intelligence Agency is going to be a big thing (in 2023 at least!).
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6. Front Line Workers
Interesting to see this in HR Trend Institute’s and AIHR’s lists (as deskless / non-knowledge workers).
We do tend to over emphasis the role of knowledge, or these days, relationship workers compared to those staff out at the front line producing things or serving customers. The pandemic brought back some focus on these workers, but this has already been largely lost again.
There’s lots of things we can do, including improving communications through digital tools and systems (eg I contributed to a report on communication apps last year that correctly emphasised the role of these staff). However, it all starts with reward. If we’re paying senior leaders a hundred times as much as we are people on the front line, or more, then nothing else we do will matter that much.
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7. Remote Work and the Productivity Puzzle
We’ve still got a lot to do to make hybrid approaches work, including through more focus on asynchronous communication. This does need to start with better Work Design (see Organisation Design above) but making hybrid work is an important part of redesigning work too.
Insight 222’s suggestion around linking Company Culture and Hybrid Work is another interesting aspect of this trend. Organisational cultures have changed, and we need to think about managing culture in a new way. Gartner have done some interesting work on this, suggesting that we need to focus on a few critical factors across an organisation, but then let micro cultures develop within teams. I partly agree, and we also need to create better organisational networks replacing the in-person connections that have often been lost, which as well as supporting change and innovation will put back some of the macro level foundation for culture which should still seen as important too.
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8. Evolutionary purpose, ESG and Net Zero
This is perhaps the key new trend, and is certainly the most important. And yes, I know it isn’t new in many organisations either, but if we’re all going to have any hope at all, then everyone, and every organisation needs to start thinking more broadly and longer term about how a business works.
We’ve already seen companies’ purpose statements shift from beating the competition and maximising return for shareholders to making a difference somehow. These statements need to evolve further to show how a company is playing a role in developing society and / or improving the environment. And then, of course, businesses need to change what they do to align behind their purposes.
Personally, I still think profit provides an appropriate measure of business effectiveness and success. But we need to understand that optimal profits aren’t going to be created unless and until we all put people and planet first.
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Note that my summary doesn’t include aspects or sub-functions of HR, including Overhauled Talent Acquisition / Recruiting, or Reward (including Pay Transparency). For me, these are areas of emphasis, not trends. However, I do agree that Reward in particular should be a particularly important area to focus on next year.
My list also doesn’t include the Future of Work, or Re-examining HR’s Role in 2023 – this is what the trends are about, not just one of the trends. Or Evolving the Role of the CHRO, HR and the C Suite, or being Effective vs Efficient – things that we’ve been doing, or at least trying to do for quite a few decades now.
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So the above eight trends are the ones I think HR needs to think about and take account of (in a best fit way) next year.
And if you want some help to think through your own responses to the trends, how about joining the Strategic HR Academy’s ‘2023 Priorities’ programme – starting 30 January 2023?
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Jon Ingham
HR and OD Strategist, Trainer, Learning Facilitator at the Jon Ingham Strategic HR Academy
