The start of a new year is a time to refresh mindsets and set new goals. For companies, this means looking forward to new opportunities, establishing targets, and revising business plans as needed. The Human Resource (HR) department is no exception.

The world has spent much of the past two years in a state of extreme flux - as the pandemic and geopolitical tensions introduced new hurdles to workplaces including remote work and manpower shortages. Today, most countries around the world have embraced an endemic state and workplaces have settled into a new normal.

Come 2023, what then can HR leaders expect? We delve into the HR Trends Report 2023 by research corporation McLean & Company to find out. The report gathers inputs from over 1,000 business professionals to highlight 5 key trends employers can expect in the new year.

  1. The re-examination of HR’s role

HR will continue to gain importance come 2023, playing a greater role in broader organisational strategy as compared to the past two years. With this, organisations are more likely to effectively adapt and capitalise on new opportunities, as well as generate and implement new ideas. Non-HR professionals too are increasingly seeing the value of the role.

Yet, manpower remains a concern, leaving existing HR professionals with high levels of stress. This may pose a challenge in 2023, with there being higher possibilities of burnout among HR professionals.

One way organisations can alleviate this is by cultivating their staff’s sense of purpose at work through connecting an individual’s contributions to the organisation’s missions and goals.

  1. Expanding the employee experience conversation

The employee experience conversation will continue to gain traction, as organisations turn to designing better experiences and improving their employer branding and marketing. This too will have positive implications for businesses, with organisations displaying positive employee experiences showing a greater increase in productivity and overall performance.

Besides business performance, HR employees who are involved in the designing of a positive employee experience also report finding more purpose in their day-to-day work, which can help with employee stress and burnout.

Organisations looking to improve the employee experience can turn to employee value proposition (EVP), where an employee can receive a unique set of benefits in return for the skills, capabilities, and experience they bring. Based on McLean & Company’s report, a comprehensive EVP presented better outcomes for talent recruitment as well.

  1. Making space for Diversity, Equity and Inclusion (DEI)

Organisations looking to recruit and retain talents will need to pay greater heed to their DEI efforts, as the report found that HR departments high performing in DEI are twice as likely to perform well in recruitment efforts. Yet, prioritisation on DEI seems to have fallen over the years, often due to a lack of resourcing, strategy and leadership.

In response, McLean & Company recommends the implementation of competency-based DEI training, which can positively impact leadership support for DEI programmes. This involves moving beyond general awareness of DEI-related concepts, and focusing on specific competencies such as anti-racism.

  1. HR digitalisation

The pandemic has seen industries around the world digitalising, and HR needs to keep up. The 2023 report finds that about 60% of HR departments have yet to go through digital transformation, despite clear benefits of digitalisation. The report highlights how digitalisation can help to boost both productivity as well as decision-making capabilities, for example.

The three most common barriers to HR digitalisation were found to be legacy processes and systems, insufficient budget as well as a lack of digital HR strategy. For HR departments wanting to hop aboard the digitalisation train in 2023, McLean & Company emphasises the need to ensure that employees are equipped with the necessary digital skills to support the transition.

  1. Closing the skill gap

Finally, HR organisations this year will be paying greater heed to closing the skill gap, whether it be in the process of digitalisation or in the search for other competencies. At the moment, organisations are looking to achieve this through talent recruitment, internal training and development opportunities, as well as encouraging internal mobility among their ranks.

One key way organisations can close the skill gap is to focus on building talent, and less on recruitment. For instance, first-time leaders often face the largest skill and competency gap within organisations. Developing their leadership capabilities will have clear impacts on organisational outcomes including innovation and business performance.

Need help developing a HR strategy for 2023? Charterhouse is here to help! Contact us today.