The pandemic brought about the abrupt (and continuing) shift to remote work, the Great Recession, collective burnout and quiet quitting, strapped resources and hiring freezes, new technology…the list seems endless.
Thanks to these challenges, HR certainly doesn’t look like what it did five years ago—and at the rate things are evolving, it could look entirely different next year. But what HR did gain is a seat at the board table, and they're not giving it up.
Even so, HR professionals don’t have the luxury of waiting to see what happens. They’re the trusted navigators of their companies, tasked with not just weathering the changes butthem.
That all starts with trying to make sense of what lies ahead. Consider this guide your compass. We’re digging into the state of modern HR so you can keep pace with the relentless changes and chart new territory with confidence.
HR trends to know for 2023 (and beyond)
So where is HR headed? While trends are never an infallible indicator of what’s to come, they can help provide a general sense of the themes that are shaping the future. Here are five HR trends that will drive HR in 2023 and beyond.
1. Hybrid and remote work are here to stay
While plenty of major players have issued return- to-office mandates, the working world still won’t look the way it did before—with people working on-site eight hours each day, five days per week. Even the mandates themselves are fairly flexible, with many requiring that employees head to the office a few days each week as opposed to full-time.
The modern workforce is distributed, with Gartner predicting that an impressive 71% of the U.S. workforce will be remote or hybrid in 2023. Even organizations with some employees on-site need to become remote-first to streamline workflows and communication.
This flexible way of working clearly meets an employee need, proven by the fact that jobs that allow people to work from home full or part-time see seven times more applications than in-person roles. However, it also introduces more complexity for HR leaders who are tasked with figuring out how to:
- Alter recruiting, hiring, and onboarding processes: These routines and expectations need to change to support a hybrid or fully remote workforce.
- Maintain company culture: It’s tougher to do on a hybrid or remote team, and virtual happy hours and other “mandatory fun” aren’t quite enough to fuel employee engagement and commitment.
- Develop talent: A remote or hybrid environment limits visibility into daily work. HR teams and managers need to work together to identify career paths, performance metrics, and other transparent ways to effectively manage, measure, and develop talent.
2. Recruiting and hiring practices are less archaic and more adaptable
We’ve come a long way from faxed resumes and “to whom it may concern” cover letters, and we’ll continue to see some big shifts happening in recruiting and hiring—with many aimed at prioritizing diversity, equity, and inclusion (DEI) and making the entire hiring process more inclusive and accessible.
Here are a few talent management movements already taking shape and that will continue to gain prominence:
Pay transparency
When it comes to work, money matters—for employers and employees. As a result, many companies are seeing the value in being upfront about wages. Doing so not only makes the hiring process more efficient (why invest time in interviews only to find out salary expectations don’t match at the bitter end?) but also supports equality and reduces the wage gap.
In a December 2022 survey, 51% of businesses reported that they disclose wage ranges in job postings (that’s a 45% increase from 2021). Some U.S. states like New York and California and the European Union have even passed salary range transparency laws, so we’ll likely see that number increase.
Skills-based hiring
The competitive labor market of the past few years forced many employers to think critically about what they really need candidates to bring to the table. Enter skills-based hiring, an approach that focuses on the competencies of applicants rather than specific degrees, years of experience, or other potentially arbitrary criteria.
Instead of weeding out candidates with quantifiable filters, skills-based hiring values less-traditional forms of education and experience, particularly in tech careers where things move so fast that college curriculum struggles to keep pace. Employers also use other mechanisms (like skill assessments) to evaluate applicants during the hiring process.
45% of companies say they’re adopting a skills-first approach to hiring to fill their open roles with the most qualified talent—regardless of their background.
Leadership investment
With so much growing emphasis on DEI, companies can no longer relegate this important function to HR generalists. Many are turning to trained experts and investing in specialized roles to support their organization’s DEI efforts.
According to recent research, 71% of S&P 500 companies have a DEI officer in place and more companies will follow suit in order to go beyond lip service and get this critical function right.
3. Employee experience takes top billing
Retention is still a top problem for HR professionals, with 47% of respondents in a recent survey citing hiring and retaining key talent as their most pressing challenge. And there’s plenty of cause for concern. In a survey from Robert Half, 46% of employees said they’d look for a new job in 2023. Other estimates even go as high as 61% of employees on the hunt for a new role.
Companies that want to keep their top talent on the payroll will need to continue to prioritize the employee experience and invest accordingly. In fact, 47% of HR leaders say the employee experience is a top priority for 2023.
Elevating the employee experience will mean something different to every organization, as it hinges on listening to what your employees truly value and want (and that can vary based on industry, role, and even the generation of the worker). It could mean:
- Sharing clear career paths and development plans to fuel employee growth and learning
- Offering perks and benefits that are more meaningful and resonant with your staff
- Providing adequate training for managers, who are the primary drivers of employee engagement
The employee experience needs to be focused on employees, meaning your efforts need to align with their needs and desires. For example, Patagonia offers on-site childcare and generous parental leave to support working parents—and frequently ranks on various “great places to work” lists as a result. Pet company, Chewy, rolled out Chewy University, offering in-person events, virtual courses, and other learning resources to support employee growth.
>> Want more inspiration? Here’s a list of in-person and remote employee engagement programs to get your employees invested and excited.
There isn’t one right way to ace the employee experience. But there definitely is a wrong way: failing to prioritize it at all.
4. Employee wellness rises up as the ultimate benefit
Let’s zone in on the “perks and benefits” piece of the employee experience. There’s no doubt that, with so many people working remotely, Instagram-able perks like ping-pong tables, on-site gyms, and rooftop bars don’t have the allure they once did.
So what do employees actually want? The answer seems almost deceptively simple: they want to feel cared for.
The past few years haven’t just been tumultuous for employers—they’ve been a wild ride for employees too, leaving many feeling completely depleted. 42% of workers reported burnout in a February 2023 survey by Future Forum, the highest figure since May 2021. We’re on the brink of a burnout epidemic—if we aren’t already in a full-fledged tailspin.
Employees don’t just expect their employers (and more specifically, HR departments) to acknowledge those challenges—they expect them to address them. In fact, 67% of employees want their employer to help them take care of their stress and anxiety.
Competitive employers are going beyond hollow words and investing in meaningful programs to support workplace wellness. According to one survey:
- 90% of employers increased investment in mental health programs
- 76% increased investment in stress management and resilience programs
- 71% increased investment in mindfulness and meditation programs
Companies are also focusing on tertiary benefits—like flexible schedules and adequate PTO or paid family leave—that support employees as people, even if they aren’t directly related to wellbeing.
5. HR technology sees growing investment
Needless to say, HR teams have a lot on their plates and they need the right resources and technology to effectively manage those changes and efforts.
46% of HR leaders say HR technology is the top investment priority for 2023, even ahead of other pressing issues like staffing and recruiting, learning and development, and DEI.
People analytics is one area that’s seeing growing emphasis, with HR teams using people-first data to make informed decisions about future strategies, programs, and benefits. In a 2022 survey, 65% of surveyed companies said they increased the size of their people analytics team in the previous year. And according to LinkedIn’s 2023 Jobs on the Rise report, People Analytics Manager is the second-fastest-growing job in the U.S.
Of course, no conversation about the future of HR technology is complete without a mention of artificial intelligence (AI). One in four organizations report using automation or AI to support HR-related activities, a number that will only increase as AI evolves. Companies are already supplementing a variety of workflows with this technology, including:
- AI-powered recruitment: Teams are using AI to create job descriptions, filter through applications, answer candidate questions, and more.
- Employee records management and payroll: This simple yet tedious administrative work is easily handed off to AI.
- Employee engagement and sentiment: AI isn’t just for grunt work. It’s smart enough to automatically monitor employee engagement without surveys (that’s exactly what Erudit does).
Building a modern HR tech stack
Modern HR challenges require modern HR technology—not disparate tools and tangled spreadsheets. Today’s HR teams need integrated solutions to address current and future needs.
If you’re looking to build your own HR tech stack, the following are the must-haves in the modern world of work:
Human capital management (HCM) software or human resource information system (HRIS)
This category is best described as all-in-one HR software that handles all of the most important HR functions. If you’re looking for a one-stop shop rather than integrating different tools, popular options include:
Applicant tracking system
Specifically focused on recruiting and hiring, an applicant tracking system streamlines all of your workflows involved with posting jobs, screening candidates, scheduling interviews, and more. At Erudit, we love:
Payroll
HR is responsible for making sure everybody gets paid. Payroll software manages and automates your employee payments. We recommend:
Employee engagement and performance
These solutions go beyond employee data management and help organizations understand their employees so they can improve performance, engagement, and wellbeing. Our favorites include:
- Lattice
- CultureAmp
- Erudit, the only AI for employee experience
How Erudit supports the future of HR
There are plenty of evolving HR trends that will continue to shape the world of work. But to make the most of them, organizations need accurate insights into how their employees are really feeling.
Developed by psychologists and data scientists, Erudit provides access to real-time culture metrics by analyzing workplace business communications, like emails and chat messages. Erudit integrates with all of the top corporate communication tools, so you can get a solid and reliable understanding of your workforce—without surveys or any dedicated effort from employees.
The world is changing—HR must keep up
HR is anything but a stagnant business function. In fact, as the working world continues to shift, HR teams are the ones at the forefront. They’re tasked with helping their organizations adapt and evolve—and ideally, proactively.
Failing to do is costly. Archaic processes break down, the employee experience nosedives, and recruitment and retention become an even bigger challenge. In short, in the modern era of HR, it’s not enough to just keep up—you need to stay a step (or three) ahead.
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