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Looking into the HR Crystal Ball: What’s Ahead for Leaders and Organizations

As we head into 2023, HR executives continue to face challenges. While I believe the “Great Resignation” is now in the rearview mirror, competition for top talent is still strong, even though there is an element of uncertainty about the overall financial situation as the year progresses. Employees continue to prioritize work-life balance and flexibility. The Talent Attraction & Retention Trinity, represented by “Culture, Compensation, and Career,” will be more important than ever for companies that recognize employees as their most valuable asset.


What’s ahead for the Chief Human Resource Officer, Chief Diversity Officer, and Total Rewards Leader in 2023? Here are the top trends that Blue Rock Search believes could affect you this year.


Pay Transparency Grows More Important

 For the past year or so, pay transparency has crept into the public consciousness as more employees voice frustration over a lack of clarity on salary, whether it’s during their job search or internally within their current company. With new laws taking effect requiring companies to disclose salary ranges, look for pay transparency to be a hot topic well into 2023.


Some companies may attempt to maintain the “upper hand” by providing wide salary ranges that are functionally unhelpful but adhere to the letter of the law. The companies that wish to get ahead and attract top talent will be the ones that adhere to the spirit of these requirements, providing true transparency and a fundamental understanding of how the push for pay transparency is about demonstrating respect for job seekers. It’s also an excellent way for companies to “put their money where their mouths are” and take a tangible step towards addressing long-held gender and racial pay disparities, historically exacerbated by a lack of transparency.


A DEI Re-evaluation Is Coming

 DEI has been a central focus for many organizations over the last few years. One critical step for many companies has been hiring a Chief Diversity Officer (CDO) or a similar executive-level role to oversee these efforts. However, a new study from the executive search and consulting firm, Russell Reynolds, found that around 60% of CDOs at S&P 500 companies left their positions between 2018 and 2021. The average tenure of these DEI leaders was no more than two years.


Excessive turnover in key DEI positions points to the need to ask questions to determine whether DEI is well-integrated into the organization, is getting enough attention and funding, and is well-supported by leadership. DEI initiatives require real investment. Hiring a DEI leader can be a flashy way to signal an interest in DEI. Still, without day-to-day financial, emotional, and structural backup, the flash fades fast, leaving companies with more significant problems than when they started.



Employee Experience Takes Priority

 According to Gartner, 47% of HR leaders are prioritizing employee experience in 2023, with a particular focus on career development and internal advancement.


As one CHRO told HR Executive, “People don’t just come to work for a paycheck; they are looking for much more.” In general, improving the employee experience means improving the whole experience, not just adding a couple of “flashy” perks. In the year ahead, expect to see CHROs and their teams digging deep into what their employees truly want. That could mean more flexible schedules, support for continuing education, more clarity about work/life balance, internal career paths, and better support for mental health.


Implementing changes and building a process for listening to employee feedback over the long term can make a big difference in recruiting and retaining talent in a labor market that continues to be competitive.


Expanded Benefits Take on More Significance

 Excellent medical benefits have long been a top way to attract and retain talent. In recent years, however, traditional medical and dental coverage is no longer the primary concern for many employees. Instead, they’re prioritizing organizations that anticipate the potential pitfalls of a fast-changing world and have responded accordingly with clear, bold, and genuinely helpful policies.


Mental health, parental benefits, and reproductive care top the list of “expanded” healthcare benefits employees will be looking for in 2023. It’s a win for companies, as well. Employees who are less stressed about their ability to meet their health, wellness, and family needs are more likely to be productive and engaged while working.


Mandate for Effective Workforce Planning

 Because of the rapid pace of change over the past few years, many companies are finding that the assumptions on which they based their future planning are no longer true in this new environment. This disconnect, in turn, leads to being unprepared to address challenges in areas like skills development, talent recruiting and retention, and the overall relationship between employees and employers.


2023 brings with it a mandate to re-evaluate workforce planning to find more effective ways to achieve organizational goals. Broadening the scope and focus of this work beyond traditional headcount planning is a must. Companies will be looking for ways to add flexibility and resilience to their plans, whether that’s talent sourcing, task distribution and workflow, flexible work options, or other solutions.


Employees Look for New Skills and Career Development

 A study from the Harvard Business Review found that workers who stay a long time in one role without a title change are more likely to leave for another company. Today’s competitive labor market means that employees are more tuned-in than ever before to new opportunities. As a result, companies need to work even harder to avoid talent brain-drain.


One of the easiest ways for a company to head this off at the pass is to invest in reskilling, mentorship, and career development. Ensure that the career ladder is clear to everyone so that employees can understand what it takes to advance. Be equally transparent with job postings and opportunities, and take the time to evaluate what the “lifetime” of a career path and employee experience looks like. When this transparency is paired with support for skill expansion and professional development opportunities, companies are likelier to retain loyal employees in the long run.


Focus on Pay and Financial Awareness

 The past year was great for job-seekers, but the effects of global inflation have still taken a toll on employees’ wallets and retirement funds. As a result, 2023 is likely to see HR teams re-evaluating and re-strengthening their financial benefits while also working to ensure that employees are well-informed on their options. Step one is pay increases: a report from found that 48% of U.S. employers are planning bigger salary budget increases in 2023, raising the median raise percentage from 3% to 4%. Along with raises, companies are looking into ways to support their employees in making those salaries work better for their lives.


Recent research from Morgan Stanley at Work found that 60% of employees pay more attention to their financial benefits now than in the previous year. The same research also found that 96% of HR leaders say that “their company needs to do a better job helping employees understand how to maximize the financial benefits offered to them,” and 89% of employees agree. These benefits include traditional offerings like retirement planning and contributions, but competitive benefits might include student loan assistance and financial coaching.


A Renewed Focus on Improving Leadership

 In times of change and uncertainty, effective and resilient leadership is more important than ever. A survey from Gartner finds that 60% of HR leaders see leader effectiveness as a top priority, but only 24% think their current approach prepares leaders effectively. This gap indicates a major movement on the horizon for HR in 2023 as they work to address the need for better leadership training, which affects everything from recruiting to retention.


Gartner’s research, along with others, suggests a new model for leadership training in 2023: “human” leadership that focuses on more complex, authentic, and flexible traits in leadership rather than the perhaps-outdated image of “strength equals power.” HR will need to adjust its approach to leadership development and focus on these traits to help the next generation of leaders succeed.


Organizations and Employees Look for Purpose

 Experts at Strategy + Business and PwC have found that more hiring discussions consider a candidate’s life goals and desired experiences, and how the organization – and its purpose – can help the individual achieve them. As workers redefine their relationship with work, they’re looking to understand how a job can fit into their overall sense of purpose in life. In turn, organizations will need to have a plan for appealing to candidates who are prioritizing more than just career goals.


Companies are also seeking a more defined sense of purpose. This could be helpful as HR executives navigate the year ahead because academic research has found that a sense of “purpose” can help keep us steady in uncertain times.


“Quiet Hiring” Dominates the Workplace

 Many organizations are running into a conundrum: they need new skills in their workforce, but they don’t have the infrastructure or budget to hire full-time workers. Instead, they may turn to “quiet hiring”: hiring temporary staff or shifting current employees into new roles temporarily.


Quiet hiring can be a way to flexibly use an existing talent pool to fill urgent, immediate needs, even during a hiring slowdown or freeze. The key, whether hiring external talent or asking existing employees to take on new tasks, is to make the new responsibilities appealing as part of an overall career move. Organizations that frame these temporary moves as something that can help move careers forward – rather than a desperate plea for help – are likely to have much more success.


Final Thoughts

2023, like the past few years, is likely to be a year where we see significant shifts in the workforce. We’re in the midst of a broad re-evaluation of the meaning of work and how we work, and 2023’s trends reflect that. It’s also a year focused on making the work experience “better” and empowering people at all levels, whether that means pay transparency, more career development and leadership training, a renewal of DEI efforts, or a search for overall purpose. 2023 can be a year where we make great, positive strides towards the future of work – let’s work together to get there.


By Ruben Moreno


About the Author

After a 25-year career in Corporate Human Resources and HR Executive Search, Ruben Moreno and his two partners co-founded Blue Rock Search based on a simple but ambitious vision of creating a firm that would “Change Lives and Organizations One Relationship at a Time.”  Ruben leads the Blue Rock HR and Diversity Executive Search practice specializing in the identification, assessment, recruitment, and onboarding of Chief HR Officers and Chief Diversity Officers and their respective teams — inclusive of leaders in Talent Acquisition, Total Rewards, HRBP’s, Learning & OD, HR Technology, HR Operations, and HR Analytics. Ruben has helped place hundreds of HR Executives and built deep relationships within the CHRO community across multiple industry verticals. His clients consider him a trusted partner who takes the time to understand their business and add value beyond executive search.

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