What Trends Will Shape HR in 2023?
As we enter 2023, it is time to highlight and prioritise some of the issues and opportunities facing CHROs and their HR leadership teams. We invited ChapmanCG’s global consulting team to provide their insights on what will matter most to HR this year:
- Future of Work
- Organisation Design and Change
- Total Rewards
- Talent Acquisition and Onboarding
- Re-Skilling and Skills Development
- Inclusive Leadership, Diversity, Equality and Belonging
- Culture and Employee Experience
- HR Tech-Stack Innovation
- Sustainability and Social Responsibility
- Mental Health and Well-Being
Future of Work
The ‘new ways of working’ is a constant in our conversations with HR leaders. No one has the answer and there is a lot of experimenting and sharing of ideas across all networks. Like culture, each organisation’s solution or pathway forward is unique and it is great to observe HR professionals sharing learnings with one another. The new ways of working challenges preconceived ideas and structures of the past, it is forcing the inclusivity dialogue more than ever, but most importantly it is allowing businesses to access talent they may not have considered or conceived they could attract in the past.
Hiro Azuma, Director based in Japan
HR practitioners everywhere are quickly learning to juggle new performance practices, organisational transformations, well-being programs, flexibility frameworks and new ways of working. The future of work is an oxymoron of perpetual inconsistencies. We will continue our conversations about the ‘never normal’ as supposed to the ‘new normal’. A reality where change is constantly triggered by the un-predictive world around us. As HR professionals we must learn to predict and anticipate these momentous changes and translate these into HR practices to continue to attract, engage, and retain talent in the most relevant way.
Prachi Desai, Director based in India
An interesting global trend is more flexibility in role location when it comes to CoE-based roles. In the past, it has been rare to see these positions located outside of global or regional headquarters. We are seeing more flexibility and preparedness to move the location to where the right and affordable talent sits, which we believe is driven by a mix of talent availability and cost as companies are more comfortable with the post-pandemic notion that we can work effectively from anywhere. This trend is mostly limited to CoE roles and rarely applies to Talent Development, DE&I, and HR Transformation lead roles where proximity and visibility are essential to efficiently drive the transformation and talent agenda forward.
Stanislav Medvedev, Director based in Germany
Organisation Design and Change
Economic uncertainty, looming recessions, geopolitical tensions, and ongoing organisational transformations are all continuing to disrupt and challenge. Organisation design will continue to be a key focus for CHROs in 2023, as many companies are witnessing slower growth and will have to ’right-size’. Over the past year, we have noticed that leaders who are willing to depart from traditional, legacy hiring or interviewing tactics are better equipped to find the ‘best-fit talent’ for their needs.
As this is a topic I find fascinating I recently wrote an article on competency-based hiring and its implications on talent attraction, retention, and diversity.
Christopher Kouns, Director based in the US
Workforce strategy and organisation design is a specialist skill set that we have observed increasing in demand. Many businesses have created a new role for this niche area, bringing previously outsourced workforce planning strategy, in-house. In Australia, we have been engaged in multiple searches with workforce strategy and organisation design, now as an addition to a broader strategic CoE. We have also seen the elevation of a workforce planning role within a structure to a more senior influential level, as supposed to where it sat operationally in the past.
Kate Vuleta, Senior Director based in Australia
Many CHROs have reshaped their structures, and 2023 will be a year of further change to organise the HR function to achieve its goals of agility, customer centricity and operational efficiency. HR operations have been rebranded as ‘employee experience’, encompassing more areas in tech and analytics. Several CHROs we spoke to talked about buying in more digital capability, analytical mindsets, empathetic leadership, commercial drive, and pragmatism into their teams. There is also a major drive to break down ‘silos’ within the function, striving toward a seamless approach.
Caspar Bungay, Director based in the UK
One of the ‘hottest’ areas for hiring in HR leadership will continue to be total rewards. This is due in part to a continuing acute talent shortage. Added to this is the fact that there are greater demands on this specialisation than ever before. For example, in the past conventional wisdom was that for the largest, most sophisticated global organisations, the total rewards head would have a deep background in global compensation, including executive compensation. This still stands true today. However, the greatest ‘pain point’ for many CEOs and CHROs today is employee benefits. Benefits, which encompass ‘hot topics’ like well-being and flexible working in addition to the traditionally more complex domains such as medical insurance, can be seen as a more pivotal component of total rewards from a risk perspective. One CHRO recently described benefits to us as a ‘potential minefield’ while briefing us on a total rewards leadership search requiring as much or more benefits expertise versus compensation.
Another growing trend for the total rewards specialisation is its tighter link with talent management, particularly regarding a company’s ability to effectively drive performance management. The talent management specialisation has traditionally ’owned’ performance management. However, given the extent to which pay drives behaviours, rewards professionals now have equal or in some cases more ownership of the performance space. This has necessitated the two specialisations needing to have a much tighter partnership than in the past. In fact, we are aware of a couple of organisations that are now exploring the potential of a combined talent and reward function. We expect that the above trends will continue, and we anticipate that this will also potentially mean we can look forward to an interesting evolution of the total rewards space in future.
Anna Taylor, Senior Director based in New Zealand
Talent Acquisition and Onboarding
Regardless of the wider, global macroeconomic trends, recruiting and the war for talent and future skills is an everyday reality in rapid-growth markets everywhere. Talent leaders are investing heavily in their talent acquisition tech and AI platforms to enable fairer, faster, and more engaging hiring decisions. With many employees now working in a hybrid or fully remote environment, a renewed focus is being placed on building better onboarding experiences for engagement and retention.
In my article on the importance of onboarding, I speak to senior HR leaders in APAC about the critical factors to consider when onboarding remotely.
Fleur Daniell, Director based in Singapore
Political and economic uncertainty has triggered slower growth for external hiring across some global markets. As such, internal mobility or building rather than buying critically needed skills will be given a greater focus; not only to fill internal vacancies with massive cost benefits but for retention purposes also – sealing an employee’s commitment to an organisation. These assignments often offer flexibility and variety to employees, particularly when cross-functional and based remotely, and can help to future-proof the organisation. Many HR and talent leaders will continue to prioritise internal transfers and promotion in 2023, by further investing in new technologies to architect and map critical skills within their organisation.
Read more about my thoughts on internal mobility in this article.
Andrea Merrigan, Director based in Germany
Re-Skilling and Skills Development
As the workplace continues to change faster than ever before, the key skills learned in an academic setting are becoming outdated just as fast. A growing number of employers are no longer asking for college degrees for certain roles. Upskilling and re-skilling are more than the latest people and capability buzzwords and nice-to-have benefits. They are now crucial for business success and building a sustainable and constantly future-ready workforce. Companies with an eye towards the future forecast their skill set gaps and align them with their succession plans. They are coming to understand that internal upskilling and re-skilling programs can be very effective.
Addressing skills gaps within organisations especially when related to succession planning provides several benefits. It allows the building of more diverse teams. It can be more cost-effective and quicker to train existing talent rather than bringing in external hires who will need to be onboarded. Companies that do not provide the opportunity for internal promotion risk the loss of key employees in the current candidate-driven market. Add on the loss of vital knowledge and experience, potentially to a competitor, and the business case for both upskilling and re-skilling is compelling.
Alejandro Castillo, Director based in the US
Inclusive Leadership, Diversity, Equality and Belonging
Inclusive leaders empower people, and empowerment is one of the most critical factors to an employee’s success. Having an inclusive leadership culture, which values people’s involvement and empowerment, gives everyone a sense of belonging which matters more than ever since the outbreak of the global pandemic. When people are included, their worth is recognised and respected. Employees are at their best when they are their authentic selves. As quoted in Forbes; “self-awareness is one of the most powerful traits of successful leaders”. Now as we embark on new ways of working, it is important to remember that it is the everyday actions of the leaders that build an inclusive culture for the employees.
Whilst diversity is still an important topic, and we do not want to downplay this, for many progressive organisations it is systemic in their DNA, advanced by the board agenda, workforce education, and the adaptation of better hiring practices enabled by tech. Inclusive leadership will continue to drive the diversity, equality, and belonging agenda. It is also refreshing to see a shift in attitudes across many parts of Asia.
Elaine Khoo, Director based in Singapore
Culture and Employee Experience
Witnessing the most fluid and dynamic job markets we have seen in years, ‘purpose’ is becoming increasingly key across the workforce and to HR professionals themselves, who are seeking roles where they feel valued and where they can make an impact. EVP, engaging culture and inspirational leadership will become critical to ensure retention. All HR leaders across all functions have a role to play in ensuring the EVP holistically centres employees as people and as customers.
Kalkin Kao, Senior Director based in China
HR Tech-Stack Innovation
HR tech-stack innovation is a growing priority on the CHRO agenda, as companies automate while balancing the critical high-touch people experience journey. HR and people operations, employee experience, HRIS, and people analytics skills are in demand as a result. As HR functions become more efficient and leaner, an ability to embrace innovative technologies, and optimise through these disciplines is becoming a ‘must’ for HR leadership looking to build and leverage a contemporary, business-friendly, best practice platform for their function.
Read more about our thoughts on HR tech in this article.
Dee Karsan, Director based in Japan and Ringo Lau, Senior Director based in Hong Kong
Sustainability and Social Responsibility
Perhaps heightened by the ongoing woes of the pandemic, political instability, and climate-change-related disasters, this year corporate social responsibility comes to the forefront of the minds of employers, employees, and consumers. We will see a greater need for HR professionals to support corporate vision and values around a company’s sustainability journey. It will also have an impact on talent attraction, retention, engagement, and the employer value proposition. This is particularly true for Gen Z and Millennials, the largest cohorts of the working population. We are hearing a common theme from our conversations with HR leaders who are seeing that sustainability is increasingly being incorporated into their mission and corporate values, as CHROs are making greater contributions to their organisation’s sustainability report.
In my recent article on sustainability as HR’s next frontier, I discuss this topic with global HR leaders who reinforce the importance for a company to have a clear position on sustainability in order to attract and retain the best talent.
Nicola Hasling, Senior Director based in the US
Mental Health and Well-Being
We have lived through a fundamental change in the way that we work, as people found their professional lives changing by working from home, taking salary reductions, and facing unprecedented fear around the future of their roles. These changes continue to have an impact today and are still creating uncertainty as we come to terms with the new normal.
The trend of businesses investing in delivering mental health and well-being will continue and become more important than ever in 2023. This is no longer viewed as a nice to have but is being recognised as bringing commercial benefits to the business. These benefits, amongst others, include productivity increases, decreased levels of absenteeism and health care costs and an all-around positive effect on company culture.
In our recent article on psychological health and safety Fiona Jury and I address the root causes and discuss how to make organisations thrive.
John MacLean, Senior Director based in the UK
We hope you have enjoyed reading the perspectives of our global team on the HR topics that will impact the direction of the world’s leading companies this year. Please get in touch on LinkedIn to let us know your thoughts, what are your HR priorities in 2023?
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