Major Trends Impacting People Management In 2023

The best people operations teams in the world run like product management functions

The past couple of years have tested HR leaders following the aftereffects of Covid-19. With an abrupt shift to remote work, mass resignations, and economic volatility, they were challenged across the board.
 

As HR teams continue prioritizing and adapting to challenges while keeping organizations functioning at their best, many of the knock-on effects on people management will continue into 2023.

So, what will be the major trends impacting people management in the months ahead as businesses settle into new ways of working, face fresh challenges, and zone in on new focuses?

New Working Norms

During the pandemic, entire industries shifted to remote work without a measurable loss in productivity – with many claiming the era of ‘office work’ was forever over.

This is highlighted following a recent report showing almost 9 in 10 people would work flexibly if they were presented with an opportunity to.

But since companies called their workers back into the office in 2022, many did so with allowances.

Companies started to realize that employees want greater flexibility by working from home, so have switched to a hybrid model. Balancing the benefits of in-person and remote ways of working, others have decided to go fully remote or issued staff with strict return-to-office orders.

In addition to where we work, there has also been a quieter revolution unfolding when it comes to how much time we spend working. Numerous 4-day working week trials have been taking place around the world, promising no loss of pay. And the results are positive.

The International study, where most participants were in the U.S. and Ireland, included 33 companies with 1,000 workers agreeing to a six-month trial of a 4-day working week. The companies stated revenue rose over the course of the trial, sick days and absenteeism were down and resignations fell slightly.

Stress, burnout, fatigue, and work-family conflict all declined, while physical and mental health, and work-life balance increased.

As we continue in 2032, business leaders and HR teams will have to work hard to evolve their working practices to determine which is best for them in the long term.

Getting feedback from employees will be integral to its success, as well as having the data to defend why.

Financial Coping Strategies

As recession winds continue to swirl amid layoffs and hiring freezes, both employees and employers are bracing for an uncertain future.

Organizations are grappling with understanding the new normal. As with any downturn, department leads will be asked to move their focus away from growth and instead toward profitability and cash flow.

Business resilience really has never been more critical and companies will look towards HR professionals to play a leading role in supporting the workforce through this challenging period.

Employees are a company’s biggest asset and therefore highest cost. Looking at internal data, key performing indicators (KPIs), or productivity stats will be beneficial to make the business case for roles or individuals under review.

But keeping top talent will pay dividends as they could be the pillars needed to successfully ride out the economic storm.

However, workers are dealing with the rising costs of living, soaring energy bills, and high inflation. This worry translates into pressure on salary increases by employees seeking to offset the increasing cost of living.

But faced with pay freezes, redundancies, and budget cuts, companies will be fearful valued employees might be at risk of leaving due to salary requests being denied.

If a salary increase isn’t on the cards, organizations can look at alternative incentives such as a four-day work week, training courses, or qualifications if there’s pressure on fixed costs.

There will also be an emphasis on including a financial well-being policy that feeds into an organization's wider well-being strategy. Companies can look to see if action should be taken at a group or individual level, showing their commitment to supporting employees with their finances and reaffirming the benefits on offer that can assist.

“Back to Human”

Covid-19 accelerated employee demands on HR to meet physical and mental health needs. This urgency unveiled to the majority of businesses that some core human element has been lost in all these technological advancements.

For years, HR leaders have found themselves on a cost-efficiency treadmill that applies analytics and big data to existing HR operating models. Even in areas of HR like recruitment and learning and development, the emphasis has been on productivity and how to measure it.

However, businesses are remembering they’re dealing with real people, not machines. So, the ‘human’ element in HR has a renewed focus that will continue in 2023.

In a technology-first world, organizations that understand and look after their workforces on a human level will have a competitive advantage over those who don’t.

Drivers of positive behavior such as gratitude, trust, empathy and listening will continue to be prioritized, to ensure individuals stay and succeed. A sharp focus on employee health and well-being will also prevail, with preventative care and personalized programs coming to the fore.

Companies will rethink the employee experience in ways that respect individual differences. They will look to implement more flexible, responsive policies: engaging more directly and deeply with employees, letting them bring their whole person to work.

A human-centric approach to people management will underpin the progression of diversity, equity, and inclusion (DEI) strategies.

Breaking DEI into smaller chunks of learning, communication and experiences threaded over time creates a more lasting impact. But to move the needle on DEI within an organization, DEI must receive the same level of investment as other critical strategies.

This includes a dedicated budget, a team, committee, or collaborators, leadership buy-in, and access to tools and data, such as applicant tracking software (ATS).

POPS

A new interpretation of people ops is emerging, one that treats the employee experience as a “product” and something that’s integral to the business achieving its core mission or objective.

It’s a people-centric approach that focuses on what people experience as employees within the company to improve their productivity, growth, and satisfaction.

It includes all aspects of an employee’s life cycle, from recruitment and selection, performance management and professional development, and succession planning to resignation.

And managing this effectively comes down to a business approach to people ops.

The best people operations teams in the world run like product management functions. In this way, they can help organizations identify and attract the best talent, develop and retain their employees and create a positive work environment.

This concept may not be new, with Google being among one of the first to rebrand its HR department as ‘people operations’ back in 2006, but we can expect to see more organizations adopt this model to unlock greater productivity and solve people-orientated challenges faster in 2023.

Author Bio

Finn Bartram is Editor-in-Chief at People Managing People.