10 trends that will change the way people-centric businesses and their employees impact each other in 2023
In most industries, the last 25 years has been marked by an almost breathless obsession with the customer—how to acquire them, how to keep them, and how to maximize their lifetime value.
The next 25 years will be similarly consumed by the employee—how to acquire them, how to keep them, and how to maximize the value they contribute to a business.
TREND 1
HR GOES TO THE C-SUITE
Every business function—from sales to finance to engineering—has faced an evolution at various points in its existence. The pandemic moment was the tipping point for HR leaders, asking more of the function and forcing a conspicuous, almost wartime leadership that may have surprised a few cynics. The CHRO became prominent as HR stepped up—and there’s no turning back.
THE IMPACT
The pandemic and the uncertainty it wrought ushered in a new reality for work, workforce, and workplace. As HR leaders like to say, the future of work is now. The question you need to ask yourself is whether you’re prepared to meet that future. Because disruption is inevitable in business—it’s how we evolve to meet changing opportunities and market conditions—and it’s happening now.
People data is business data
Business and people leaders must prepare to make complex decisions—confidently—that will ultimately impact people and business outcomes on multiple levels.
Human results
The evolution that HR faces now can be thought of as a shift from human resources to human results, where the pivot is from HR as a support function to HR as a force multiplier on talent.
TREND 2
RESIGNATION/ RETENTION AS YIN/YANG
Resignations are at an all time high, and predicted to stay there. Instead of focusing on the necessity of slowing down resignation rates—especially among key employees—prioritize practices aimed at boosting retention to thrive.
THE IMPACT
Replacement costs are huge. Blanket retention tactics simply aren’t going to cut it when the average cost to replace an employee is 2x their salary, up to $100,000.
Come back/go away
Companies are currently in a push-and-pull pattern with employees as they attempt to pull them back to the office, and they’re facing the threat of resignations—or, actual resignations.
Invest in both sides
Businesses make significant investments in staffing. Finding ways to buck the trend of increasing resignations while boosting retention will continue to be a weighty focus for companies in 2023.
The top two talent acquisition challenges many companies currently face are a shrinking labor market and turnover challenges. Exacerbated by the pandemic and so-called Great Resignation, employees across all industries have gained more leverage over employers in the past two-plus years, leading many to switch jobs or industries, pursue non-traditional roles, or retire early.
Michael Vipond SVP & Managing Director, symplr
TREND 3
FINDING COMPANY CULTURE IN HYBRID WORK
The pandemic abruptly forced organizations and leadership to confront their long-standing positions about in-office work. Once employees proved productivity and effectiveness working remotely, everything changed. So, how can organizations evenly spread company culture from office to WFH to hybrid?
THE IMPACT
Organizations that listen to employee feedback and prioritize freedom, trust, and flexibility are seeing positive impacts on their people and the business. For example, a year into Spotify's “Work from Anywhere” program which lets employees choose their work mode, has seen the company increase diverse representation, lower time-to-hire from 48 to 42 days, and reduce turnover by 19%. What’s more, roughly 60% of their employees continue to choose the office as their primary place of work, with very few choosing to work fully remote or fully in-office.
Equal slices of the pie
As organizations put hybrid work models into place, employees in the office and those at home may have very different experiences, support, and opportunities. How will companies balance culture fairly across these groups?
Culture spans location
Companies that seek to strike the right balance between the perceived benefits of person-to-person interaction and collaboration while accommodating an employee preference for flexibility and work-life balance will foster employee satisfaction, engagement, and longevity.
TREND 4
LACK OF DATA INSIGHTS GETS COSTLY
The People Impact Gap is the chasm between the business outcomes executives care about and the talent and skills needed to produce those results. At the root of this gap is a disconnection—and the cost is incredibly high. Some executives will attempt to span it by restructuring HR, but savvy organizations are focusing on another key element: adopting people analytics to realize the impact people have on the business.
THE IMPACT
The financial cost of not connecting people insights to business decisions totals $1.8 trillion, and the human value takes it way beyond that.
Building a bridge
At the heart of today’s workforce challenges is a clear data gap that stands between the goals of the business and the talent available or needed to achieve them.
Data-informed success
On average, organizations using people analytics are more profitable and have a higher return on assets, generating a revenue per employee of $125,000 more than their peers.
People might be the most expensive part of a decision being made. So if we make decisions just based on sales or finances or marketing or whatever it might be, without consideration of the people data, we could cost our company significant dollars.
Melissa Arronte, Ph.D., Solution Principal, Employee Experience, Medallia
TREND 5
TALENT ACQUISITION GETS AN OVERHAUL
A tight labor market is here to stay, which means leaders can’t rely on the old playbook for managing headcount through a downturn. So what's the key to winning the war on talent? It requires precision, agility, and embracing new, outside-of-the-box strategies.
TREND 6
ORGANIZATIONAL EMPATHY ENTERS THE DEIB CHAT
The final three letters in the DEIB (diversity, equity, inclusion, belonging) acronym are often overlooked. How are savvy people leaders strengthening their E,I, and B efforts? It starts with organizational empathy.
TREND 7
PAY TRANSPARENCY OPENS UP
Pay transparency is increasingly becoming a hot topic of conversation, fueled by new laws requiring employers to post salaries in new job postings. A Visier survey found that employees largely agree with this ruling and, in fact, demand greater pay transparency. So where do employers and employees find a middle ground?
TREND 8
EFFECTIVE BEATS EFFICIENT
The age of effectiveness is already here, and companies need to ensure they’re equipped with the necessary people data and insights to keep up and withstand economic downturns. What can people leaders do now to optimize for effectiveness and put the business on the path to long-term success?
TREND 9
ALWAYS-ON PASSIVE & ACTIVE LISTENING
A Visier report showed that 89% of employees reported experiencing burnout over the previous year, and 70% would consider leaving their current company for one that offered better resources. How can leaders spot burnout before it occurs? Hint: it’s always-on.
TREND 10
DATA- INFORMED ETHICAL TRANSFORMATION
As reporting on ESG-related practices becomes compulsory, organizations are scrambling to “do the right thing” to remain compliant. Forward-looking companies are prioritizing driving direct business benefits by complying with regulatory requirements and driving ethical transformation to meet stakeholder and employee expectations. And it’s paying off.