HR teams will have to deal with conflicting and converging workforce trends in 2023, according to global HR analyst Josh Bersin, but will move from awareness of these issues to activating solutions for the benefit of the organisation.
In his HR predictions 2023 report, he notes how the pandemic and subsequent return to changing work practices has left the workforce “tapped out”, he says, while managers are frequently paranoid about employees’ productivity while not in the office.
At the same time, employees feel more empowered and vocal than ever, forcing organisations to focus on employee experience initiatives to discourage them from taking their skills elsewhere.
Bersin, CEO of The Josh Bersin Company, is known for his insights into HR practices and technology. He predicts that 2023 will cement a number of external trends that will in turn impact HR teams’ roles around skills development, recruitment and employee engagement.
In a wide-ranging report of 2023 workforce predictions, his key thoughts for the coming year are:
The workforce is changing
Demographic changes mean that the population employers recruit from is both ageing and more ethnically diverse, and policies will need to reflect this. Increased life expectancy and a lower birth rate means the workforce is generally getting older, and could mean up to five generations working together.
“Twenty year-olds looking for new relationships, career guidance, constant communication, and excitement; early family creators needing flexibility for childcare and child activities; middle-aged workers who want promotion and to improve their standards of living; older workers desirous of purpose, meaning, and work that fits their older eyes, hands, and legs,” says Bersin.
HR predictions 2023
The available talent pool is also getting smaller; Bersin points to a prediction by the World Bank that the total population in the highly developed countries will peak around 2045, after which only countries in Africa, Indonesia, and India will continue to grow. This could mean immigration needs to become a major source of workers.
Industries will converge
We’re already seeing corporations move into new domains, such as car manufacturers moving into electric vehicle and battery production, and this shift will continue in other industries. From an HR perspective, Bersin predicts, job architecture and business structures will need to adapt.
“HR leaders need to respond by looking at recruiting, retention, reskilling, and redesign of jobs in one integrated system,” he says. “There is a massive effort to build skills models and assess skills, as well as for improved internal mobility, talent marketplaces, and new ways of nurturing high-value talent from currently low-status employees.” Traditional career pathways may no longer be valid, nor will “recruiting on experience” as jobs will change all the time.
Managing skills becomes more dynamic
Because the formal relationship between person and job is getting weaker, people will work across multiple roles and projects and skills needs will shift rapidly. To respond to this, HR will need to move away from competency-based models of hiring and promotion and use data to focus on who has the right skills for any project or role. This should be “capabilities first, skills second”, he suggests.
Hybrid working evolves
Companies will start redefining workplace models for better teamwork, performance management and multi-functional working, Bersin predicts. They will look to technologies that cover scheduling, workplace optimisation, real-estate planning, video and productivity to ensure teams can collaborate both remotely and in-person.
“Hybrid work also requires cultural strength. Managers must learn to be not just comfortable with remote, but also how to lead, listen, and help in that context. Rather than mandate ‘days in the office’, I urge companies to build a set of appropriate, organisation-specific tools and guidelines,” he says.
‘People sustainability’ and new types of leadership
Managers will offer more conscious support for the physical and mental health of employees so they feel able to give their best at work, including being more conscious of issues such as health and safety, diversity and inclusion, employee rights such as collective bargaining and freedom from sexual harassment.
When people feel productive, they love their jobs; when they feel they are wasting their time, they quietly quit or move on.”
Alongside this we’ll see leadership qualities redefined, the analyst suggests. Recent large-scale layoffs at tech companies have shown that “you can’t just hire to grow and expect that to always work”, Bersin says. Good leaders in 2023 will listen more to employees and be more deliberate and strategic in their hiring.
Managing performance ‘in the flow of work’
Companies have been moving away from the annual appraisal for some years now and managers are increasingly adopting tools that will help them check in with workers on a more regular and informal basis. Some technology providers offer tools that can oversee goal management and can be integrated with key workplace platforms such as Teams.
Pay transparency and equity grow in importance
Rising inflation and a tight labour market made 2022 a volatile year for pay, according to Bersin, but workers are more affected by whether their pay is equitable than the actual level of pay. He advises HR and payroll teams to identify inequities in pay before allocating budgets or simply giving everyone a pay rise. Offering non-cash benefits such as insurance, extra paid holiday or learning opportunities will also help people “stay focused and productive”, he says.
Simply hiring more people won’t increase productivity, as organisations have discovered. Rather than “filling slots”, HR teams will need to focus their hiring on people who can prove they will increase productivity not just as an individual but for the whole team. Policies should improve productivity rather than reduce it, Bersin predicts.
Doing this will improve engagement, he adds: “When people feel productive, they love their jobs; when they feel they are wasting their time, they quietly quit or move on. Your people should only ever be doing the jobs that best leverage their credentialed and valued skills, not wasting time on admin.”
Learning and development will support this, building “capability academies” where leaders can build internal support for people’s career progression and growth. HR tech platforms are vying to become “systems of record” for skills, he adds, so people teams can keep a closer eye on how their organisation’s skills are evolving.
HR must ‘cherish’ recruiters more
While technology can support recruitment, sustainable hiring requires recruiters to build relationships and become trusted advisors to the business. Bersin argues that recruitment teams occupy “a leadership job” because they drive the employer brand and have the tools to source and assess prime candidates. “Stop seeing them as just salespeople,” he says.
At the same time, use of people analytics will become more sophisticated so recruiters can build “talent intelligence”, sharing with CEOs specific numbers and projections of how many people the company can hire, reskill, or which jobs can be redesigned.
HR is at the heart of the business ‘operating system’
HR stepped up during the pandemic as it focused on protecting employees from infection and supported them to pivot their working practices. They did this by working with the business and this relationship needs to continue, he says, so HR can be part of more integrated, cross-organisational working in the future.
Bersin told Personnel Today that he believes most HR teams are “aware” of the issues highlighted in his 2023 predictions report, but are in various stages of activation.
He said: “Wellbeing and employee retention are on every company’s mind at the moment, as are the issues of cost and productivity. But the essential issue of building skills-based hiring and promotion strategies, career models, internal mobility, and new leadership solutions are very much a work in process. And just about every company is scratching their head to figure out what HR tech to buy and which tools to consolidate.
“So, I would say HR is ‘wide awake’ to these issues, and 2023 will be a big year of ‘activation’ and design to make work more productive and engaging.”