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HR Trends, Challenges & Priorities for 2023 Part 2

This is the second of a two-part review of the HR Trends, Challenges & Priorities for 2023.

In a nutshell, our team of HR specialists and consultants at Jigsaw Cloud have identified that:

  • The war for talent will continue way for years not months.
  • Staff attrition will increase, so staff retention strategies need to be a priority.
  • Recruiting and onboarding process and timescales should be fine-tuned to remain competitive.
  • Compensation, benefits, and company culture must reflect the changing needs and wants of employees.
  • Huge flux in the last couple of years means further change management needs to be collaborative, not prescriptive.
  • Offering a positive employee experience is now a necessity, not a ‘nice to have’.
  • With remote working embraced by many, new skills are needed to manage a diversely located workforce.
  • Diversity, Equity, and Inclusion is front of mind for an increasing number of job seekers.

In part 1 we looked at four emerging trends of the eight identified: Talent Scarcity, Remote & Hybrid Working, Effective Leadership & Management as well as Managing Change Fatigue. This article explores the other four HR Trends for 2023.

Employee Experience

In the Gartner Top Priorities report, Employee Experience was cited by 47% of global respondents as a top priority for 2023. The ongoing war for talent means that positively engaging with employees and offering a great experience at every touchpoint, must become the norm, not just a token gesture.

A study by Workhuman found that employee retention (47%) culture management (34%) and employee management (31%) were also a high priority concern to HR leaders. Many issues within these broader concerns can be managed by facilitating an open culture in the organisation, a critical component of offering a positive and inclusive employee experience.

Creating a positive company culture is a key area that employers can use to further distinguish themselves, especially if they have made a long-term choice to embrace the remote working model.

According to Indeed’s Work Wellbeing 2022 Insights Report, 90% of respondents believe that how they feel at work matters, yet only 49% of people report their company is measuring happiness and wellbeing. So, it comes as no surprise that after pay & benefits, stress, lack of satisfaction, and happiness are the leading reasons people look for new opportunities. This means that measuring and understanding employee wellbeing is becoming vital to both attracting and retaining talent.

Indeed’s 2022 research indicates that expectations around wellbeing at work are increasing following the pandemic with:

  • 46% saying their expectation around happiness at work has increased in just the last year.
  • 86% saying that how they feel at work impacts how they feel at home.
  • Lastly, stress is being cited increasingly as a key reason for staff attrition.

Glassdoor research shows similar trends, stating that in the US, the UK, Germany, and France, workers who are more satisfied with their current jobs are less likely to begin an application for a new job elsewhere. Alongside employee experience, enhanced benefits can also help to mitigate staff attrition, and this is the focus for our next trend.

Enhanced Benefits Can Give Employers a Competitive Edge

Compensation remains the top priority for many in the current cost of living crisis. And for job seekers, higher pay was the most often selected reason that many start to search for a new job. This is being reflected across wage levels, where there has been substantial nominal wage gains over the last 12 months as employers try to attract and recruit the talent they need.

What’s the answer if offering higher salaries is not an option though?

Lower paying roles and sectors where remote working is not an option will have to get creative with what they offer if they want to attract, recruit, and retain new staff.

Holistic benefits have become a more critical part of compensation packages, which give employers ways to differentiate their organisations and make job offers more appealing, especially in occupations at the lower end of the wage scale that typically require in-person attendance, like childcare or food preparation and service. On Indeed’s US job platform three major benefit categories have climbed exponentially across the entire market, these are healthcare, retirement plans, and paid time off. For example, from August 2019 to August 2022, paid time off as a benefit rose from 21.3% to 38.8% in low-wage sectors like personal care and home health.

Those already employed are seeing their portfolio of benefits increasing. Previously onsite workers in tech companies could expect stocked kitchens and free lunch as standard but post pandemic reviews on Glassdoor show that free lunches are on the rise in sectors such as manufacturing and transportation/logistics.

Similarly, access to commuter benefits grew in many of the industries that do not have a remote work option, including free parking, public transportation reimbursement, and even money for fuel. However, perhaps the most critical benefit growing across all industries is that of mental health care, this trend has increased throughout 2022.

Offering a benefits package to suit the needs of today’s workforce is one step towards attracting new employees but with so much competition for talent, one aspect that often gets overlooked is recruitment and onboarding, which is our next trend to explore.

Making Recruitment and Onboarding a Great Experience

The reality of low supply and low retention doesn’t change the fact that bad hires can result in a fall in team morale and a drop in productivity. This is reflected in Gartner’s Top Priorities report which sees 46% of HR leaders prioritising Recruitment with 36% stating their sourcing strategies are now insufficient for finding the skills they need in the current candidate driven market.

Recruitment and onboarding are steeped in opportunities to offer a positive experience to both attract and retain the most suitable people, and this specific element is aligned to the ‘employee experience’ trend we have already covered.

HR technology is long past just attractive landing pages and reliance solely on third party job boards and company reputation to ensure you can hire the best available talent. By having a dedicated HR cloud system in place to collate data and identify talent, then attract, recruit, and ultimately retain these individuals is only going to become more relevant in years to come.

A considered and consistent end-to-end automated system is becoming a crucial aspect for a business if they wish to remain competitive when it comes to recruiting, onboarding, and retaining staff. Considering the entire candidate journey as a means of recruiting for any vacancy, let alone those that are tagged as ‘hard to fill’ is a trend that will grow exponentially over the coming months. Having the tech to keep candidates ‘warm’ right from the beginning of the hiring process until long after onboarding is going to give those organisations who embrace it a huge competitive edge.

Research from Glassdoor states that 89% of job seekers use their mobile for job searching while 68% Millennials, 54% of Gen Xers and 48% of Baby Boomers use social media as their primary means of job searching. Having a system to support this preferred mobile application method gives more power to HR to be able to adapt to meet talent requirements, sourcing options and changes in the market. One of the emerging talent requirements is the importance of any potential new employer to clearly support Diversity, Equity, and Inclusion (DEI), so this is the last trend we explore.

Diversity, Equity, and Inclusion is Front of Mind for Job Seekers

According to the results of a September 2022 survey from Indeed & Glassdoor, benefits such as employee resource groups, diversity training, and mentoring programs surged in 2020 and 2021 in the USA, Canada, and the UK as social justice and equity issues came to the fore. Here are just some of the findings:

  • For workers aged 18-24, 72% said they would consider turning down a job offer or leaving a company if they did not think that their manager (or potential manager) supported DEI initiatives. This figure steadily lowers as the age of respondents increases to 45% of workers aged 65+.
  • 67% of workers in the 18-34 group also said they would consider turning down a job offer or leaving a company if there was a gender imbalance in company leadership, this again reduces as the age of respondent increases to just 35% of workers aged 65+.
  • Its similarly the case when asked if they would consider turning down a job offer or leaving a company if there was a lack of race/ethnicity diversity in company leadership too.

For employers, a lack of clearly defined DEI initiatives could have a negative impact on their hiring and staff retention because the workforce of tomorrow will care even more deeply about these than the stats above show. Instead, organisations need to use these programs to continue to differentiate themselves in the candidate driven market we are going to be in for the foreseeable future.

None of the trends Jigsaw Cloud have identified in this or Part 1 of this report are going to be a flash in the pan. There is a fundamental shift in the workplace and those that shift with it and embrace those trends will thrive rather than just survive throughout 2023 and beyond.

If you’ve not read part one of this two-part series on HR Trends for 2023, we looked at: Talent Scarcity, Remote & Hybrid Working, Effective Leadership & Management as well as Managing Change Fatigue.

Jigsaw Cloud are a team of HR specialists and consultants who work alongside customers across most sectors both within the UK and internationally. This expertise and access to a wide variety of SME and larger multi-nationals gives us indepth knowledge of the HR landscape.

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