2023 is a new year for HR teams, with new challenges and market factors putting pressure on them. What can they expect in the new year, and how can they rise above issues to provide top-quality services to employees? Below, three HR leaders have shared their thoughts on the year ahead:

Tom Cornell, Senior I/O Psychology Consultant at HireVue
“As we move into 2023, the slow economic growth and recession within the UK mean we are going to see a continuation of tightening when it comes to hiring. Businesses will also need to contend with growing demand from employees for pay raises as a result of the cost-of-living crisis and inflation, as well as a growing need to provide mental health advice. Despite this, I suspect the ‘confidence’ that job-seekers have gained in recent times will carry on, so even in the face of high inflation and prices, they’ll be willing to hold off for something better, rather than just take the first job they are offered.

“However, the outcome for businesses isn’t all negative. We are likely to see upskilling and job mobility trends continue to rise, which will help to get the right people into the right roles, leading to higher levels of motivation and productivity.  With fewer employees,  companies will need to invest in learning and development for existing and new employees. The ability to move and grow with an employer appears to be increasingly important for jobseekers and employees alike, so this creates a perfect opportunity for businesses to cultivate top talent.

“Within the AI sector, what 2023 is likely to bring is a little more complex. The technology sector is one of high growth, but next year we are going to see more legislation proposed and coming into effect, which will affect AI businesses massively. In the short run, this might cause negative sentiment towards AI as it implies there is a need for regulation in the first place, but in the long run, uptake is actually likely to increase because there will be more consumer confidence in the product. The legislation ultimately means businesses won’t need to be accountable for interpreting what should or shouldn’t be done when developing AI technologies, which is positive for everyone involved.”

Gareth Jones, Chief Product Officer at Thomas International
“2023 will bring a new wave of HR trends for businesses to stay on top of. One of these which will be at the forefront is organisational agility. As the war for talent intensifies, hiring teams will need to keep bringing in and developing existing talent to be fluid and adapt to changing business demands. Role definitions will become less stringent, allowing businesses to flex talent and teams more easily around resourcing bumps and mitigate impacts on business outcomes.

“This change in role definition aligns with another key trend which we will see emerge next year – hiring with a focus on soft skills. Our recent research found 43% of businesses were suffering from a soft-skills shortage. Businesses need to address this gap in order to build successful teams. As a result, the way we hire will change to test more for these skills, with organisations putting a higher value on them in the market.

“Finally, despite being three years after Covid began, businesses will still be feeling the effects of the pandemic next year. A large proportion of job leavers in the ‘Great Resignation’ left due to long-term sickness and stress. As a result, burnout and wellbeing will also be major 2023 themes, especially since they affect employees’ ability to perform their roles properly. Companies will be asked to go beyond the basic wellness programmes that the ‘Great Resignation’ showed were unsatisfying to employees, as the well-being debate becomes more complex.”

Burcin Ressamoglu, CEO at Sodexo Engage
“As we look to 2023, business leaders must not forget the factors which have played a major part in the economic landscape in 2022. The ongoing war in Ukraine, rising energy prices and the cost-of-living crisis will continue to be the major drivers of the economy and consequently will have an impact on the direction businesses take .

“Every market will continue to be affected differently, but regardless of what vertical they are based in, business leaders need to stay on top of potential issues impacting their short term and mid-term business results. Despite this, in 2023 there will be some key trends enabling businesses to win in the marketplace.

“Innovation will be at the heart of what we will see in the next 12 months. This will be both in terms of product offerings, as businesses continue the process of digitisation, and also operating models which will require investments in terms of people, competencies and technology.

“Embedding tech across the business and all stakeholders will enable innovation and more. The implementation of automation and artificial intelligence will accelerate business transformation. Tech will not only enable the digitalisation of businesses, but will also boost efficiency and cost savings in mid and the long term.

“The optimisation and scaling of tech will be the key focus from 2023 onwards.

Investment in technology will need to enable businesses to keep up with the high demand for hybrid work conditions, which will allow them to retain more employees and save money overtime.

“People retention and acquisition: As talent shortages continue, authentic leadership is going to be something talent is demanding, and businesses will need to shift the way they operate as a result. The outcome will be maintaining top talent across the year, which in turn will allow organisations to surpass business goals.

“Purpose oriented, flexible and diverse workplaces with fulfilling work. Businesses will be investing more in their people than wider recruitment. This will mean more upskilling of the current workforce, increasing business agility. Hybrid working will continue, with flexible working being a must for businesses looking to keep an efficient and happy workforce.

“Another key focus for many businesses, including my own, will be sustainability via ESG (Environmental, Social, and Governance). Businesses will continue to assess their environmental impact and will start measuring it more and more, leading to increased reporting, accountability and transparent communications. This will become embedded in the way businesses operate instead of being more of a side project. I look forward to seeing this and welcome this progression with open arms.

“Authentic leadership with open comms and transperency will enable the business to evolve and progress within a challenging environment.”