The future of work: The 6 biggest workplace trends in 2023 & beyond
Employees will continue to be in the driver’s seat. That’s why It’s imperative for employers to focus on employees’ well-being and mental health – and get more creative with compensation.
Over the past two years, corporate culture and work environments have undergone a significant transformation – from the pandemic and remote work to “quiet quitting” and layoffs – and we’re not done yet.
Workhuman’s 2022 Human Workplace Index insisted the decisions employers make will be critical to their team, and that 81.5% of workers feel more empowered to hold their leaders accountable for a better workplace in 2022. And they have a short fuse for results as more than half (56%) said they would only wait 30 to 60 days for employers to make needed changes before they consider leaving.
As we head into 2023, it is clear that HR departments must continue to adapt to the workplace needs of their employees, especially in light of the competitive labor market. As a result, there are some key trends from 2022 that I believe will be here to stay and others that will emerge in the new year:
1. Employees are in charge!
Employees who are not engaged or who are actively disengaged cost the world $7.8 trillion in lost productivity, according to Gallup’s State of the Global Workplace: 2022 Report. From the Great Resignation to quiet quitting – employees are in charge. Quiet quitting (employees refusing to go above and beyond their job descriptions) has become the next phase of the Great Resignation, signaling the end of the hustle culture (eat, sleep, breathe, work). We’ll continue to see employees in the driver’s seat, demanding better pay, flexible environments, strong benefits, and more in the new year.
2. Retention and engagement
The recent labor shortage and rising costs due to a spike in inflation have put an upward pressure on pay, leading to the problem of “Pay Compression.” This is where new hires are getting higher pay while existing employees don’t get raises at the same rate – also known as the “loyalty tax.” This trend is threatening retention as many long-standing employees are facing the rising cost from inflation and may decide they need to leave their company in order to get market rate pay.
3. Looking beyond the hustle culture
While remote work has been a benefit for some, it has also blurred the lines between work and life balance. Employee well-being and mental health take center stage amidst burnout and uncertainty, businesses need to find ways to retain their employees and make them feel valued. According to recent Gallup analysis, 52% of exiting employees say that their manager or organization could have done something to prevent them from leaving their job. People leave jobs for all sorts of reasons, and it won’t always be possible to keep every star employee. But with over half of the employees polled saying something could have been done to keep them, companies need to find ways to invest in their employees, from upskilling or tuition reimbursement to more creative and flexible compensation.
4. Hybrid work is here to stay
Hybrid work continues as companies adopt dynamic in-office and remote work policies. Some employees no longer want to be back in the office full time and are choosing the flexibility that working from home brings, while others are looking forward to meeting their colleagues face to face. Companies will need to quickly figure out the right balance for their workforce as responses have ranged from borderless, work-from-anywhere flexibility, to companies requiring everyone in the office at least three to four days per week.
5. Labor shortage continues amid layoffs
While we’re seeing layoffs in the tech sector from the likes of Amazon, Twitter and DoorDash, too many industries are still struggling to find workers. The job market continues to be tough for both skilled and unskilled workers. A severe labor shortage is plaguing all industries – with jobs requiring specific skills being hard to recruit for and roles that may not require specialized skills facing unprecedented attrition.
6. Pay transparency is a must
In November, a new pay transparency law went into effect in New York City, and it’s set to help millions of workers across the U.S. earn more money. As more companies emphasize diversity, equity and inclusion, pay transparency is becoming increasingly important to employees to create an inclusive, equitable culture. Companies need to focus on inclusive compensation that supports their initiatives in this space as well as delivers financial wellbeing for their employees – keeping in mind that these needs change and evolve over an employee’s career.
A new year always comes with progress and regression. As we head into 2023, it’s imperative for organizations to focus on progress and its employees’ professional and personal well-being, mental health and get more creative with compensation. In the end, employees are our greatest assets and a workplace culture that breeds valued employees is the most important thing for any company.
Rob Frohwein is CEO and Co-Founder of Keep Financial.