February 03, 2023 by Andrea Rajic
Table of contents
The pandemic. Recession. New generations becoming the majority of the active workforce.
Many events that took place over the past few years contributed to what the workplace looks like today. Hybrid and remote work models have seen incredible growth. Companies started hiring talent worldwide. Workplace cultures became more employee-centric because employees decided to say no to toxic bosses and unhealthy work-life balance. We read about quiet quitting, the Great Resignation, Chief Remote Officers, and workcations.
We’re leaving some of these trends in 2022. But what awaits in 2023?
Talent retention takes over as the number one priority for companies that want to navigate the recession successfully and ensure sustainable growth. Although talent acquisition is an essential part of the People and HR teams’ jobs, in the face of a recession, employers will need to focus of doing more with available human capital rather than investing in new talent.
Layoffs have slowed down the mass hiring spree that started during the pandemic, so talent acquisition efforts are taking a backseat for most companies in 2023, also meaning they’ll see a lower budget than retention strategies.
According to Lattice, HR leaders are planning to dive deep into creating strategies to boost employee engagement and satisfaction and implementing DEIB initiatives to ensure their top talent is here to stay. Some of these strategies will include:
Asynchronous work, flexible work schedules, and no mandates to return to the office are the recipe for a happy workforce in 2023. Workers claim that flexible working hours would contribute to higher productivity (Gartner, 2021) and consider the possibility of choosing where to work from another important benefit (McKinsey, 2022).
The freedom to organize their own time is one of the most desirable benefits for all types of workers: those who juggle several jobs, working parents who can’t find a suitable childcare option, teams distributed across time zones, and more. But flexibility isn’t just for the workers’ sake.
A study by Atlassian shows that both employees and employers can benefit from it. Employees who can choose where they’re going to work from perceive their company culture as more positive, which the study links to innovation, higher talent retention rates, better employee productivity, and reduced employee burnout.
Whether companies will opt for fully remote or hybrid work models depends largely on their industry and business organization, but it’s essential that employees have options to choose from.
In 2021, over 90% of companies increased their budgets for employee wellness programs. In 2023, even more will continue to do so to ensure their workforce is set up for success.
Although flexibility is a highly desired benefit, it can often lead to burnout due to the inability to unplug, especially in employees new to remote work. Work from home can also lead to a lack of physical activity and loneliness, negatively affecting the workers’ physical and mental health.
As a result, companies see a growing need to support the well-being of their workforce — and they see a return on investment, as focusing on employee health helps companies save money on healthcare. According to SHRM, employers could see an ROI of $6 per every dollar invested in employee wellbeing. Implementing employee wellness programs also reduces absenteeism and creates a happier, more motivated employee base.
Some wellness initiatives may include creating nutritional advice and support (and, if the team is hybrid, providing healthy snack or lunch options at the office), paid time off, fitness programs, financial wellness programs, counseling, and more.
With talent retention being a priority, People teams have moved their focus to creating a positive and equitable remote employee experience for all workers, no matter where they’re located. This means ensuring the same benefits are available to everyone, especially ones that provide employees with flexibility.
One of the critical concerns is how to build and showcase company culture in a world where colocated work is no longer the norm. Companies make up for the lack of in-person interaction by organizing on-site gatherings and team events and offering access to flexible workspaces where workers from the same city or country can gather and collaborate, establishing better interpersonal relationships.
Tech tools are also a great ally for employers trying to build exceptional employee experiences. These tools enable effective communication, teamwork, and access to all available resources that an employee needs to succeed in a remote work environment.
With the rise of remote work and global hiring, we’ve seen the world of work change dramatically over the past three years.
Gig economy growth: People around the world started choosing to build their careers working in short-term, freelancer jobs rather than having traditional, full-time employment. The so-called gig economy has grown in recent years with the rise of technology facilitating finding work through online platforms. With more workers prioritizing flexibility and independence, some employers struggled to find full-time team members.
The Great Resignation: Despite the uncertainty brought upon by the pandemic, in late 2020 and throughout 2021, employees started to voluntarily leave jobs where they felt unappreciated, disrespected, and underpaid, especially those professionals who were overworked during lockdowns. Microsoft found that over 40% of workers globally thought at least once about leaving their job. This phenomenon pushed many businesses to change the way they operate, adopt the hybrid work model, and rethink their compensation packages.
Quiet quitting: Employees who didn’t feel valued or properly compensated at work chose to disengage from their job and begin to withdraw, both physically or emotionally, before actually leaving the company. The negative effects of quiet quitting, such as decreased team morale and productivity, companies started focusing on creating a positive and supportive work environment, offering more growth opportunities, implementing recognition programs, and more.
Combined with layoffs and a looming recession, these trends didn’t make it easy for employers to find the right candidates for their teams, despite the now broader, global talent pool. Companies will continue to face a tight labor market where employees still have the upper hand.
Over 15 countries around the world, including Iceland, Spain, UK, and UAE, have already tested the 4-day workweek or are planning to do so. The shorter workweek proved to be a huge success, positively impacting employee productivity and satisfaction. Some companies even managed to achieve 101% of their usual productivity while working 32 hours per week instead of 40.
Given the success of this trend and the fact that four working days would immensely contribute to a better work-life balance for remote workers (and consequently to higher employee retention and happiness), we will certainly see more counties and companies explore this possibility in 2023. New joiners may come from New Zealand, Belgium, Scotland, and Japan, who are testing the concept this year.
However, the four-day workweek comes with its share of challenges. As Pedro Gomes, author of Friday Is the New Saturday puts it, “if [these firms] close on Friday and give everyone the same day off, that makes coordination with clients, suppliers, and the rest of the economy harder.” Employers will need to assess their situation and come up with solutions for potential risks before they decide to adopt this trend in 2023.
Newer generations, especially Millennials and Gen Z, value work-life balance as much as they strive for well-paid jobs. These workers are looking to build a career that fits their lifestyle, and not vice versa as previous generations did. As Millennials and Gen Z have become the majority of the active workforce, companies are forced to adopt their mindset and put an emphasis on work-life balance, too.
Based on the results their employees achieve when they have more free time and less stress, companies are recognizing the importance of supporting their employees to maintain a healthy balance between their professional and personal lives and are implementing various policies and benefits to support this. This can include flexible work hours, telecommuting options, paid time off, and wellness programs, among others.
The shift towards prioritizing work-life balance was accelerated by the COVID-19 pandemic, changing the way people work and highlighting the need for better work-life balance. The lockdowns disrupted many aspects of daily life, leading to increased challenges in managing household duties. This has further highlighted the importance of work-life balance and the need for companies to offer more flexible and supportive work arrangements to help their employees manage their personal and professional responsibilities.
Tech tools are already disrupting the workplace with automation and AI, especially in HR, where we’re witnessing new and better workforce management tools almost daily.
These software solutions typically help eliminate manual work with automated workflows, speed up multiple business processes, and allow teams to reduce the number of errors while focusing on meaningful work that requires human interaction and attention. Data shows, for example, that collaboration tools increase operational efficiency in teams by 131%.
A few areas in which the use of technology will continue to grow are:
Improving all these aspects of business also allows companies to build a better workplace experience and easily manage compliance and payroll for their global teams.
Companies worldwide are starting to create comprehensive employee development plans and focus more on internal promotions, given that learning opportunities and career growth are among the most desired perks today. This trend is driven by many factors, including the changing nature of work, the increasing emphasis on upskilling, and the desire of employees to stay current and relevant in their careers.
Gartner HR found that only a quarter of employees feel confident about their professional future at their current workplace, meaning companies still have a long way to go if they want to keep their best talent.
Around 45% of workers are ready to leave their employer if they receive an offer with better development programs, while providing online learning opportunities may increase employee retention rates by up to 61%. At the same time, a LinkedIn study shows that employees who receive a promotion become productive in their new role faster than new hires.
This is a good enough reason to redirect a portion of the budget into career development programs and learning resources such as training, workshops, certification programs, books, and more.
Communication, problem-solving, time management, and similar skills also get assessed when a candidate is interviewed for a job because a lack of soft skills can negatively impact employee performance and relationships in the workplace and create ineffective leaders who could drive away talent.
The pandemic took a toll on the younger generation’s soft skills, impacting their career growth and making them unprepared to enter the workforce. These future employees spent months in lockdowns without opportunities to gain critical soft skills that would help them advance in their careers, like public speaking, networking, or negotiating.
This situation calls for employers to include soft skill training in their development programs. The global soft skills training market size is predicted to reach $47.16 billion by 2027, which means social skills will be taken seriously. Improving people skills in employees will also impact an important aspect of today’s remote workplace: thanks to enhanced communication, collaboration, and empathy, employees will feel more connected and engaged and will consequently perform better in their roles.
From learning and development to wellness and flexibility, it seems that almost all of the workplace trends that we outlined here have one thing in common: enabling the employees to do their best work.
If you’re looking to do just that for your distributed team, Gable can help. We help you find, book, and manage remote workspaces worldwide to allow your employees to work in an inspiring environment and meet up with their team members to collaborate, connect, and empower each other.
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