UKG has announced its annual human resources (HR) megatrends that businesses should expect in 2023, identifying three major trends.
An international team of UKG HR evangelists, thought leaders, and social scientists partner every year to reflect on the previous 12 month's developments in the working world, and evaluate the implications for organisations and HR teams, aiming to predict how these forces will change the industry in the year ahead.
UKG has recognised three HR megatrends for 2023 that it believes will impact enterprises globally:
Navigating the human energy crisis
Mental health and wellness have become crucial to working life. This is in part due to the effects of the pandemic but also social and economic instability globally.
Many people are feeling overwhelmed, with negative news cycles with topics such as economic uncertainty, climate change, violence, and political unrest adding to a spike in mental health issues.
Further, employee wellbeing research from Great Place to Work shows only 30% of employees globally are "very optimistic" about their future.
UKG says enterprises need to keep an eye on this emerging human energy crisis because it can affect workplace culture, retention, performance and innovation.
The company says it is up to leaders and people managers to positively affect the employee experience and life-work journey. This can be achieved by:
- Providing basic employee needs such as a livable wage, affordable healthcare, and retirement and pensions support.
- Addressing burnout with flexible work schedules, urging to take paid time off, and focusing on work that really matters to the business to create reasonable workloads and deadlines.
- Recognising and celebrating employee success and empowering them with decision-making autonomy.
- Supporting purposeful work by connecting employees to the 'why' behind their role and providing career growth with training and enrichment programs.
- Investing in life-work technology that supports employees on their personal life-work journeys.
"This human energy crisis will require more than virtual happy hours and free yoga classes," says Dr Jarik Conrad, Human Insights and Human Capital Management (HCM) Advisory Vice President, UKG.
"Many workers today realise that there are more important things in life than work, and leaders must recognise an employee's continuum of needs and meet them where they are in thoughtful and meaningful ways.
"Employers have an opportunity to meet the expectations of the modern workforce with personal and technological improvements."
Optimising organisational plasticity
UKG notes how strong enterprises have been able to demonstrate success during the COVID-19 pandemic by surviving unexpected challenges and thriving when focusing on their people.
Challenging times can be significant opportunities for people and organisations to adopt new ways of working instead of falling back into their pre-pandemic habits. But enterprises will need to practice being flexible and adaptable in the coming year to ensure internal processes and networks stay open to change.
This will allow companies to be responsive and resilient in their approach to unpredictable events by:
- Strengthening people and culture networks with further investment, even in times of economic uncertainty. This is because companies that invest in their people during a recession outperform others by as much as 400%.
- Prioritising diversity, equity, inclusion, and belonging (DEI&B) to acquire more talent and innovate all business areas. UKG highlights the importance of this, noting that during the 2007-2009 recession, companies with the most inclusive cultures grew by 14.4%, as others declined, and reduced employee turnover by 28%.
- Practising strategic workforce management by adapting scenario planning to prepare for any situation. This will build a skills inventory capable of empowering employees and create employment programs to source a broad range of talent throughout full-time, part-time, gig, and seasonal workers.
The Gen X leadership effect
The third megatrend relates to the way Gen X is leading companies, compared to the Baby Boomer generation.
UKG says its research is inconclusive as to the reason, citing that it could be because the world is different, their values are different, or a combination.
But the company notes that many Gen Xers were raised by working mothers, came of age during the climate crisis, and are currently parenting Gen Zers.
As Gen X takes over the C-suite and gains a foothold in the corporate and philanthropic boards, this generation is putting environmental, social, governance (ESG) and DEI&B first, making it imperative to invest in these areas.
The impact of Gen Xers has become more pronounced and will continue to support the future of work by:
- Building more diverse boards with respect to age, gender, and race, and enhancing value by championing opportunities for underrepresented groups to be "culture adds" rather than "culture fits", which means adding diversity to teams in the form of different personalities, backgrounds, abilities, and skills.
- Prioritising ESG efforts to build trust internally and with customers, reduce risk, and create long-term value in ways that benefit shareholders, employees, customers and communities.
- In addition, Gen X's impact will be to conduct leadership and succession planning through the lens of holistic talent management, including traditional attributes like technical and industry experience, as well as considering an individual's reputation in the community and their influence through mentoring and coaching.
"Organisations have an incredible opportunity in 2023 to learn from world events and continue the positive momentum of both basic and sophisticated employee offerings to improve work for all people, regardless of level or job type," Dr Conrad says.
"In the year ahead, leaders and HR teams alike must care for their people to navigate the human energy crisis, create and maintain organisational plasticity to thrive during ever-present change, and advance efforts toward a more diverse and equitable world of work for all."