4 HR trends to drive a positive and productive work environment in 2023

  • The one constant in the last few years has been uncertainty, with every year throwing up new challenges and black swan events.

Gaurav Sharma
Updated9 Jan 2023
The Covid-19 pandemic, the Omicron wave this year, and the subsequent Russia-Ukraine war have resulted in changes in how offices function, made hybrid workspaces the norm, and so on.
The Covid-19 pandemic, the Omicron wave this year, and the subsequent Russia-Ukraine war have resulted in changes in how offices function, made hybrid workspaces the norm, and so on.

The one constant in the last few years has been uncertainty, with every year throwing up new challenges and black swan events.

The Covid-19 pandemic, the Omicron wave this year, and the subsequent Russia-Ukraine war have resulted in changes in how offices function, made hybrid workspaces the norm, and so on. On the other hand, talk of a recession and funding cuts has meant that cost-cutting and layoffs seem to be a regular feature, as companies adapt to the new realities.

For HR leaders, this brings to the fore many issues and puts them in uncharted waters. How organizations and leaders react as the world slowly reverts to pre-covid mode, with the added pressure of an economic downturn will be interesting to witness.

The availability of large data sets and an enhanced focus on employee and company well-being have meant that HR can better understand the nuances of the working relationship and business cycles. In these uncertain times, below are some broad HR trends that could shape the space in 2023:

The rise of algorithmic HR

As more and more HR tasks become automated, there is a trend to use multiple algorithms to help with multiple HR functions. A report by research firm IDC estimates that 80% of about 2,000 global giants will start using algorithms for processes such as hiring, firing, and training workers by 2024. This is already happening in the gig economy. Algorithms are increasingly rewarding, rating, and mapping the productivity of employees. 40% of the HR functions within international companies have incorporated AI applications.

This aids in talent retention, grows the candidate pool, and enables a faster hiring process that saves the company money and resources. However, there is a flip side. Algorithms have been accused of faulty decisions, are often unable to explain the reasons for major work-related calls, and have faced flak for terminating people for reasons beyond their control.

HR will have to take full ownership of algorithms, choose where they work best, and ensure that the process is efficient. Measures to eliminate existing biases embedded in historical HR data are a must to make the process smooth. Algorithmic managers can process large quantities of data, communicate clearly, and help make better-informed decisions.

Focus on total well-being

The impact of remote working, combined with the pandemic added pressures of a looming recession and a smaller employee base, could result in employee burnout. The Mayo Clinic defines burnout as physical, emotional, or mental exhaustion combined with self-doubt. For HR professionals, tackling burnout, especially among the top performers, will be very important to prevent attrition and a dip in productivity. Encouraging mental health leaves, and offering value vacations for a job well done will help.

To focus on employee well-being, HR should keep open communication lines with top leadership and employees. Giving and taking feedback is also very necessary. Old hierarchical models must be changed. Efforts to ensure more clarity from team leaders will help the employees become more productive.

Small breaks throughout the day and added vacation time are good incentives to relieve stress. It is also important to have flexible work schedules, to appreciate the top performers more, and to ensure that systems are put in place to ensure that one person does not have to fight multiple issues at the same time. Finding the balance between ensuring that the best workers do not face burnout, and maintaining ongoing projects at the same intensity will be the big task for HR professionals in the coming year.

Data-driven HR

Data-driven HR uses data and analytics to make decisions on hiring, training, and employee development. Data can identify patterns that aid in evidence-based decisions.

In 2023, as organizations rely more on data and develop more data sources and tools for analyzing and visualizing data, data-driven HR will find many applications. One of these areas could be the recruitment process. For instance, data can identify the characteristics and skills needed for success in a particular role and help HR professionals make informed decisions. For organizations, it will reduce the chances of poor hiring decisions, which are costly and could lead to a spike in attrition. It could also help HR professionals identify areas where employees may need additional support or training and help create targeted development programs. Data-intensive HR functions will rule the roost and are bound to help HR personnel do their jobs more efficiently.

Inclusion across the employee lifecycle

Building a more diverse workplace, and ensuring that the multitude of opinions across the office are heard will be a key HR task in the next year. Most Fortune 100 companies have their DEI initiatives (diversity, equity and inclusion) with 49% having a dedicated DEI initiatives leader. Inclusion and diversity are becoming increasingly important, and HR professionals are promoting inclusion throughout the employee lifecycle. HR professionals will create inclusive cultures and policies that cater to the needs of all employees, regardless of background or identity.

These trends point towards a more data-driven, inclusive, and holistic approach to managing and supporting employees. By keeping an eye on these trends and adapting accordingly, HR professionals can help their organizations create a positive and productive work environment for all employees.

Author: Gaurav Sharma, VP & Head HR at Balancehero India (True Balance)

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