HR Managers Take Note: Top 5 Focus Areas for 2023

As we move through the new year, HR managers are looking for ways to stay ahead of the curve and tackle emerging trends in the industry. 

Across the world, companies have adopted hybrid and remote working as an integral part of their operations, and employees are now more comfortable and confident with their new work styles. But with an ongoing pandemic and huge changes in the workforce, it's important for HR managers to prioritise their efforts and focus on key areas that can drive success. 

In this blog post, we'll discuss the top five focus areas that HR managers should consider to improve employee engagement, retention, and overall business success. From employee wellness to diversity and inclusion, we'll explore actionable strategies and insights to help HR managers navigate the ever-changing landscape of the modern workplace. 

Keep reading if you want a comprehensive overview of the five HR trends that organisations around the world are expected to embrace in 2023!

Prioritising Employee Wellness in 2023: Top 2023 HR Trend #1

What is Employee Wellness?

Employee well-being encompasses the mental, physical, emotional, and economic health of an organisation’s employees. It is influenced by several factors: relationships with colleagues, access to resources and tools, and management decisions. Factors such as working hours, pay, and workplace safety also have a significant impact on employee well-being.

While employee well-being may vary from person to person, it should ideally average out to a level that allows for a productive and healthy workplace. External factors, such as stress related to housing, health, and family, can also affect an employee's performance at work. However, employers can still take responsibility for what they can do to support their employees, even though they have no control over what happens outside of work hours.

Why it’s Important to Prioritise Wellness in the Workplace

The past three years have been an unbelievable challenge for employers – some pretty tough decisions had to be made along the way. But now that the bulk of the pandemic is well behind us, burnout rates are on the rise. In the UK for example, 88% of employees have reported experiencing burnout in the past two years. 

While many companies have implemented wellness programmes for their employees as a response, it is clear that employees need more individual-focused approaches to address the root causes of mental health issues and burnout in the workplace.

HR Practices for Employee Wellness

To address these challenges, companies are starting to adopt tailored wellness programmes or workplace wellness plans that can be customised to meet the unique needs of individual employees. This can include:

• Flexible working hours

• Remote work options

• Unrestrictive holiday policies

• Financial education

• On-site fitness facilities

• Collaborative workspaces

• Volunteering incentives to support community involvement

• Parent support programmes (coaching, counselling etc)

• Relaxing activities like yoga for example

The McKinsey Health Institute recently published research that found that 4 out of 5 HR leaders view mental health and well-being as a top priority for their organisation. Wellness at work is now no longer an added extra, it’s a requirement. 

Diversity and Inclusion: Top 2023 HR Trend #2

What are Diversity and Inclusion? 

Having diversity in the workplace means that an organisation has a team of employees that reflects the society in which it exists and operates. However, identifying what constitutes a diverse team is not a straightforward task.

Diversity encompasses all the characteristics that make individuals distinct from one another. The Equal Employment Opportunity Commission (EEOC) is responsible for enforcing laws that protect individual employees in the United States from discrimination in the workplace based on specific social categories:

“The United States Government does not discriminate in employment on the basis of race, colour, religion, sex (including pregnancy and gender identity), national origin, political affiliation, sexual orientation, marital status, disability, genetic information, age, membership in an employee organisation, retaliation, parental status, military service, or other non-merit factor.”

Why are Diversity and Inclusion Important? 

It comes as no surprise that diversity, equality, and inclusion are among the top priorities for HR managers in 2023. The 2022 Workplace DEI report by Culture Amp revealed that only 34% of organisations have adequate resources to support their DEI initiatives, and a mere 27% know how to measure them effectively. 

Of course, during times of economic uncertainty, leaders may be inclined to cut back on investments. It’s understandable that the most pressing priority for organisations would be dealing with recession plans and solutions for rising living costs. According to the CIPD Inclusion and Diversity at Work Survey Report 2022, 36% of employers have no plans to focus on any DEI areas over the next five years. But DEI needs to be a priority too. 

Building equity, addressing bias in processes and practices, and implementing policies to create a more inclusive workplace requires consistent attention and investment, especially during times of uncertainty.

As we enter 2023, organisations will be put to the test in their commitment to daily efforts towards inclusivity, equity, and diversity. HR teams that prioritise DEI initiatives are investing in employee retention, psychological safety, and the overall company culture. They understand the long-term impact that these actions can have on future business performance.

How to Prioritise Diversity and Inclusion in 2023

To promote diversity and inclusion in the workplace, it is crucial to have the CEO champion these efforts from the top. Best practices for diversity and inclusion require a top-down approach. Without the CEO's commitment, it is challenging to achieve a diverse and inclusive work environment.

Another essential element for employee retention is having a code of conduct in place. If your company already has one, it is important to share it with new hires on their first day. If you don't have a code of conduct, it is crucial to create one. 

Other DEI initiatives include:

• Measuring whether diverse employees are staying or leaving and at what rate

• Measuring the percentage of diversity across functions and levels

• Creating an interview panel

• Producing gender-neutral job descriptions

• Conducting blind screenings

• Eliminate the use of "culture fit" as a reason for rejecting job candidates

• Ensure that underrepresented employees are included in the interview process

• Introduce diversity and inclusion early on in the employee life cycle by incorporating it into onboarding and training programs

• Create a dedicated channel for diversity and inclusion in your company's communication tool

• Celebrate holidays and events for underrepresented groups

• Use inclusive bathroom signs

• Establish a mother's room to support working parents and promote a family-friendly work environment

Recruitment and Retention: Top 2023 HR Trend #3

Employee retention is a crucial aspect of any organisation's strategy to prevent high turnover rates and keep its best employees. Companies prioritise retention rates by implementing policies and strategies to boost employee satisfaction and retain top-performing employees.

However, employee retention does not necessarily mean keeping all current employees. Instead, the focus is on retaining talented employees who are driven and committed to contributing to the organisation's success and bottom line.

Why Effective Recruitment and Retention Strategies are Crucial

Employee retention strategies are critical for multiple reasons. First of all, high turnover rates can incur significant costs. According to Gallup, voluntary turnover costs American businesses approximately a trillion dollars annually. Replacing an employee costs about double the employee’s annual salary, so neglecting employee retention can negatively impact the bottom line.

Recruiting a new employee can be a lengthy process that involves many steps, such as resume review, interviewing, reference checking, and onboarding. The Society for Human Resource Management estimates that securing a position takes an average of 42 days. Therefore, it is in the employer's best interest to prevent high turnover rates to save time and maintain productivity levels.

Employee retention involves choosing the best-suited employees for the job and ensuring their long-term commitment. Companies need to find people with the right skills and experience who also fit the company culture. Hiring the wrong candidate can adversely affect the company culture and employee morale, leading to clashes in work standards and behaviour among colleagues.

How to Prioritise Recruitment and Retention

You can't quickly fix employee retention, and once you've implemented relevant strategies, it's crucial to maintain progress and success. To support employee retention, focus on long-term changes that can adapt to changeable conditions over time.

If employee wellness is part of your retention strategy, it's not enough to just throw in a single well-being workshop. Continuous support through ongoing wellness programs is necessary to ensure the well-being of your staff.

Evaluate the effectiveness of your retention strategies regularly and make improvements as needed. Analytics can help businesses examine their successes, weaknesses, and employee experiences. 

Ask for regular feedback from your staff to maintain employee retention. Anonymous feedback can be especially useful, and exit interviews can provide key information when employees leave the organisation. Focus on improving company culture and creating a diverse and inclusive workplace, which affects how your company is perceived by candidates and can reduce staff turnover.

At the end of the day, maintaining employee retention is an ongoing commitment that requires establishing patterns and assessing trends.

Upskilling and Reskilling: Top 2023 HR Trend #4

What are Upskilling and Reskilling?

Reskilling means finding individuals who have similar skills to the ones your company needs, which can help with the many skill changes required in today's workforce. This is especially important due to technology advancements, as it's predicted that by 2025, half of all employees will need to reskill.

On the other hand, upskilling involves teaching employees new and more advanced skills to help fill any talent gaps, and it helps create a culture of continuous learning and career advancement. These employees may have worked with your company for a while, and investing in their development can help them feel more committed to staying with your company. 

The Importance of Investing in Employee Development

Investing in professional learning and development is crucial for creating a positive employee experience that people are eager to be a part of. Retaining employees becomes easier when they have opportunities to grow within an organisation and enhance their skills. This not only increases retention rates but also boosts productivity. 

Training in soft skills such as communication, active listening, and problem-solving can foster an environment of openness, cross-team collaboration, and stronger manager-employee relationships. Many employers offer education initiatives to develop employees' skills, and HR professionals can push for more of these growth opportunities to benefit the entire company.

How to Prioritise Upskilling and Reskilling in 2023

Investing in skills learning is beneficial for both employees and companies. Employees who are encouraged to take advantage of upskilling, reskilling, or cross-skilling opportunities through internal mobility tend to be more engaged and are more likely to stay with the company. 

Companies looking to provide learning opportunities for their employees should consider upskilling as a first step. Upskilling allows employees to develop new skills or improve existing ones, which can help them advance in their careers. 

Upskilling is especially effective for employees who want to advance within their current field. Besides attending workshops and conferences, employees can upskill through formal education, certifications, college courses, and professional associations. In addition to improving productivity and increasing the potential for promotions, upskilling can also help employees acquire valuable skills that are in demand during times of economic or global change.

Employees can expand their professional growth by acquiring new skills for jobs in different departments or fields through reskilling. Reskilling prepares employees to take on new roles in their organisation. 

Reskilling is beneficial for employees who want a change in their careers, and when used appropriately, it can improve morale and reduce burnout by motivating employees to engage in work that aligns with their interests.

HR Technology: Top 2023 HR Trend #5

The rise of cloud computing, artificial intelligence, and machine learning is transforming businesses worldwide. As a result, many organisations are adopting new HR technologies to build a sustainable, productive, and engaged workplace.

What is HR Tech? 

HR technology refers to the use of both hardware and software to manage a range of human resources tasks and responsibilities, including payroll, employee benefits, and recruitment. 

However, the latest HR technology trends extend beyond these traditional functions to address a wider range of HR-related challenges, such as managing the new hybrid work environment and utilising artificial intelligence (AI) and advanced data analytics. The latest tools include improved employee self-service options and continued learning platforms, which allow HR leaders to take on a more strategic role in the organisation.

How HR Managers can Leverage HR Tech

• Automating administrative tasks. HR tech can automate repetitive and time-consuming administrative tasks such as payroll processing, benefits administration, and employee record keeping. 

• Streamlining recruitment. HR tech can help streamline the recruitment process by automating resume screening, candidate communication, and interview scheduling. It can also help identify the best candidates for a job by using data analytics and AI.

• Improving employee engagement. HR tech can provide employees with self-service options for tasks such as requesting time off, updating personal information, and accessing benefits information. This improves employee engagement by giving them more control over their work-life balance.

• Enhancing learning and development. HR tech can provide employees with access to e-learning platforms and other training resources. This allows them to continuously develop their skills and stay up-to-date with the latest industry trends.

• Utilising data analytics. HR tech can provide HR managers with valuable insights into employee engagement, retention, and performance. By using data analytics, HR managers can make more informed decisions and develop more effective strategies.

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FAQ - Frequently Asked Questions

What HR should focus on in 2023?

In 2023, HR should focus on several key areas, including leveraging HR technology, upskilling and reskilling employees, fostering a culture of continuous learning and development, promoting diversity, equity, and inclusion, and improving employee retention through career development and growth opportunities. 

What are the top 3 HR trends for 2023?

While it's difficult to predict exactly what the top HR trends for 2023 will be, based on current developments and emerging technologies, the top three trends to watch are likely to be:

1. Increased focus on employee well-being and mental health

2. Continued adoption of AI and automation in HR processes

3. Emphasis on upskilling and reskilling employees to meet changing business needs and emerging technologies.

What are HR manager goals for 2023?

Some common goals for HR managers in 2023 may include implementing HR technology to improve efficiency and productivity, developing a diverse and inclusive workplace culture, and providing opportunities for upskilling and reskilling to retain top talent. Other goals may include enhancing employee engagement and well-being, improving performance management processes, and strengthening employer branding and recruitment strategies.

What are the upcoming HR trends for 2023?

1. Continued emphasis on employee experience and well-being, with a focus on mental health support and flexible work arrangements.

2. Increased use of technology in HR management, including the adoption of AI and automation to streamline tasks and improve decision-making.

3. Greater focus on diversity, equity, and inclusion (DEI) initiatives, including hiring practices and training programs.

4. The rise of upskilling and reskilling programs to meet the demands of a rapidly changing job market and emerging technologies.

5. Increased emphasis on data-driven HR decision-making, using advanced analytics to better understand employee needs and optimise HR practices.