2023 HR Meta-Trends by SAP SuccessFactors

⇨ The new trends in the HR in 2023 suggests that employee experience has matured from a mere trend to foundational business strategy and will remain one in the coming years.

⇨ In 2023, organizations are expanding their investments in intelligent technology to include skills management, employee engagement, well-being, and DEI&B.

⇨ 2023 will see HR trying out different work arrangements, team dynamics, and technology to strike a balance between employee engagement, well-being, productivity, and business goals.

In an on-demand session at the virtual SAP Sapphire event, The Growth and Insights team for SAP® SuccessFactors®solutions presented their recent research on the evolution of top HR meta-trends and the changing priorities. The session also included SAP SuccessFactors’s perspective on the findings.

The new trends in the HR in 2023 suggests that employee experience has matured from a mere trend to foundational business strategy and will remain one in the coming years. The research reveals that employee experience is not only fundamental to the HR strategy, but also no longer being treated as a separate conversation considering all other meta-trends are influenced by it.

The research was conducted through an analysis using 73 sources from the business press and yielded a list of 346 distinct trends, which were classified into broader “meta-trends” using content analysis. Below are the top trends that were identified along with SAP SuccessFactors’s take on them.

Trend #1: Winning the Race for Skills

With the power shift towards employees due to the competitive job market, employees will maintain the upper hand, and this is expected to continue in 2023. As the labor market remains tight, organizations will have to challenge traditional hiring methods and consider skills-based hiring, which focuses on a candidate’s ability to perform rather than their formal qualifications. This approach promotes diversity and better accommodates the trend of non-linear career paths and organizational redeployment needs.

SAP SuccessFactors’s take: “Skills-based hiring” goes beyond evaluating a candidate’s current skills to perform a specific job. Companies should assess whether a candidate’s current skills could be applicable to other roles the organization may need in the future and whether they have the potential to acquire new critical skills. This requires organizations to redefine their understanding of what potential is and reevaluate the methods used to assess it.

Trend #2: Mobilizing the Workforce for the Future

In 2023, organizations are more focused on internal mobility instead of external hiring. Companies facing external hiring freezes and restrictions on backfilling positions will prioritize upskilling and reskilling their existing workforce to fill skills gaps and maximize their talent pool. This may involve “quiet hiring” to address skills shortages without hiring new full-time employees. As physical workspaces reopen, companies will need to find the right balance of learning and development (L&D) opportunities for their hybrid workforce. In-person learning will likely resume for necessary activities, while omnichannel strategies, experiential learning and coaching, are expected to become more popular in 2023.

SAP SuccessFactors’s take: For long-term success, culture change initiatives must be combined with re-skilling and upskilling efforts. Without a learning culture that encourages and rewards continuous learning and development, employees may not prioritize their growth and development. Regarding the ownership of learning and development, current trends suggest that organizations must collaborate with employees to co-create and co-own their development. This approach aligns employees’ personal aspirations with the organization’s strategic skills priorities and ensures that their development is a joint effort between the employee and the organization.

Trend #3: Adopting Emerging Technologies with Purpose

Historically, HR has been criticized for focusing only on adopting intelligent technologies for recruiting and onboarding purposes, neglecting the rest of the employee experience. However, in 2023, organizations are expanding their investments in intelligent technology to include skills management, employee engagement, well-being, and DEI&B. The Metaverse/Web3.0 are popular topics among 2023 trends, and some progressive organizations have started exploring their potential use cases. Another area of interest is blockchain for verified credentials, ensuring they are secure, private, and portable.

SAP SuccessFactors’s take: To prepare for upcoming AI regulations, HR should implement stricter standards than what is currently required. This includes ongoing testing of algorithms to eliminate bias, providing transparent explanations of how algorithms work to employees, and creating specific roles, such as an organizational fairness officer or AI ethics board, to ensure the ethical use of intelligent technology. While HR is exploring new ways to use intelligent technology throughout the employee journey, it is important to consider how employees perceive and feel about its use. Employees are most comfortable with intelligent technology assisting with tasks, such as answering HR questions and completing basic HR tasks, and least comfortable with the technology being used to evaluate their skills or performance.

Trend #4: Making Flexible Work, Work

Last year, HR leaders struggled with the imbalance in flexible work opportunities between deskless and desk-based workers, and this year, they are expected to prioritize creating equitable flexibility. This may involve assessing options for deskless employees, such as flexible work schedules, paid time off, and earned wage access, as well as empowering these workers with greater control over their work hours. Additionally, 2023 trends indicate that tracking technology is becoming more prevalent as employers seek tools to support their remote and hybrid work models.

SAP SuccessFactors’s take: HR will need to try out different work arrangements, team dynamics, and technology to strike a balance between employee engagement, well-being, productivity, and business goals. HR can also lead the effort to rethink the in-office experience with a data-driven approach. This includes shaping strategies for returning to the office and designing the physical space to foster collaboration and innovation. Tools like organizational network analysis (ONA) can help identify who would benefit most from returning to the office, what type of work should be done in-person, and how to minimize resistance during the transition.

Trend #5: Embedding Holistic Well-Being Everywhere

In 2023, organizations are expected to continue prioritizing employees’ overall well-being, which includes their mental, physical, emotional, and financial health, as they continue to navigate crises that impact their lives both at work and outside of work. However, this year’s trends also highlight the importance of HR looking after their own health and well-being, given the stress and challenges they have faced while leading the way through change.

SAP SuccessFactors’s take: The persistent discussion about the importance of organizations supporting employees’ overall well-being has primarily revolved around benefits as the main solution to address well-being challenges. To truly make a significant impact, HR must go beyond benefits and actively incorporate well-being into their daily practices, decisions, and technology that directly affect employees. HR needs to leverage their influence and collaborate with executive counterparts to address the underlying systemic cultural and operational issues that contribute to well-being challenges.

Trend #6: Embracing the Complexity of DEI&B

In 2023, organizations are expected to integrate diversity, equity, inclusion, and belonging (DEI&B) principles throughout all their people-related practices by adopting a “lifecycle approach.” Companies will prioritize talent acquisition and retention practices that focus on diversifying talent pipelines and creating more inclusive retention strategies that consider the unique needs and expectations of various workforce segments.

SAP SuccessFactors’s take: While previous trends indicated a strong commitment to DEI&B, the current trend shows a downward trajectory in prioritizing this. However, the emerging “lifecycle approach” suggests that DEI&B may still gain attention as organizations consider it across their practices. Additionally, research suggests that generational differences in the workplace are often overstated and can lead to negative outcomes for employees, so organizations should examine their decisions that assume generational differences and the potential harm of acting on stereotypes.

Trend #7: Preparing People Leaders for Today and Tomorrow

In 2023, organizations are focusing more on preparing individual contributors for managerial roles. In 2023, frontline and middle manager well-being will be a top priority. Managers will be expected to develop and maintain unique, empathetic relationships with their team members to improve performance, prevent turnover, and balance the needs of employees and the organization. Organizations will use various methods to prevent or reduce manager burnout, such as skill-building, initiatives for well-being and work-life balance, and job restructuring to focus on the most important tasks.

SAP SuccessFactors’s take: Organizations need to prioritize developing managerial skills in all employees, not just those who are on track to become formal people managers. This is especially important given the emergence of temporary dynamic teams that often operate without a designated leader. In order to build a strong management pipeline, leading organizations will invest in developing these skills across the entire workforce.

Source: SAP Sapphire