Top 3 Trends Impacting The Workforce In 2023
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By Aaron Green, Chief Marketing & Solutions Officer, SAP SuccessFactors
With ongoing macroeconomic turmoil, rising inflation, skills shortages, and widespread layoffs, 2022 was another challenging year for organizations and employees alike. And as we head into 2023, uncertainty about the future, and the future of work, still looms. As the skills gap widens, budgets tighten, and hybrid work remains the norm, it’s abundantly clear that organizations will need to focus their efforts on the people currently within their workforce in 2023 — to engage, develop, and effectively lead them.
These are the three major trends that will shape work in 2023.
Adoption of AI Accelerates as Organizations Address Talent Concerns
As organizations continue to face economic uncertainty, supply chain challenges, and rising inflation, hiring will continue to slow in several industries – pushing organizations to look at their current workforce to fill gaps and meet growing business demands. We’ll start to see accelerated adoption of machine learning and AI specifically in addressing their talent needs. In the skills space, we’ll begin seeing a groundswell of organizations focused on creating a skills catalog so they can better understand the capabilities that exist in their workforce, where they are lacking, and how they can deploy people into different roles to stay on top of changing business needs.
With organizations continuing to face talent shortages in 2023, they’ll be forced to redefine what a “qualified” candidate looks like and take a critical look at how their AI and machine learning algorithms are defined in their recruiting practices. Eliminating hiring biases that give preference to applicants from certain schools, or move those without degrees to the bottom of the digital pile, will be critical to tap into often overlooked talent pools and eliminate the paper ceiling. In some places, this will be a requirement to meet the transparency dictated by emerging regulations.
As Return to Office Continues, HR Takes on Office Redesign
As hybrid work continues to be the norm, organizations will need to invest in workspace design to optimize how people and teams gather in the office. Employee engagement will be critical to talent retention, so people and culture teams will need to be key decision makers in office redesign plans to ensure employees can do their best work.
Employees expect more collaboration areas and designated quiet spaces; increased use of technology that can bridge the gap across dispersed teams, including VR; and flexibility even if they are commuting.
Leadership Will Be Measured by Transparency and Empathy
Leaders can no longer hide behind the veils of corporate niceties. Employees, especially in younger generations, expect transparency and honesty from leaders in acknowledging strengths and challenges, market and business conditions, and what the organization is doing to address these. These conversations will be forced even further as new regulations mandating salary transparency become more common globally. The pandemic was a test drive for this type of leadership.
But even as employees resume pre-pandemic routines, the need for constant, open communication won’t disappear. Leaders and organizations will continue to be measured on their ability to show empathy, especially when facing tough decisions like layoffs.
The higher expectations and demands of organizations coupled with the global burnout crisis will also prompt many organizations to rethink and reshape the role of the people manager. Today, people managers are often expected to manage up to five generations of employees in a team and create meaningful, individualized experiences for everyone — all while meeting team goals and business demands. In 2023, we’ll start to see the traditional people manager role evolve into two distinct roles that work in tandem: the manager who leads the team from a brand and business perspective, and the manager who leads the team from a people perspective.
The past several years have been anything but predictable. But they have demonstrated just how resilient people can be. While supply chain challenges and economic woes remain top of mind, organizations will only future-proof their business if they maintain a relentless focus on their people.
To learn more, tune into “Let's Talk Big Ideas 2023: HR Edition” with the SAP SuccessFactors leadership team.