Our HR Industry Review of 2023

Our HR Industry Review of 2023

At the start of the year, we made some predictions about what HR trends were likely to be strong over the year ahead. You can read more about them here, but the main theme was employee retention. HR simply isn’t just about recruitment, it’s about retaining great talent and fostering an environment where people can grow and develop. As the workplace settled after the pandemic in 2022, we had seen a lot of movement in recruitment with a huge number of industry resignations and job seekers. So did that stabilise over 2023 as we predicted? If so, why? And what are the drivers and strategies that lie behind this? Our review will answer it all! 

The Great Retention

After so many workers left their jobs during the ‘Great resignation’, we predicted that 2023 would be all about employee retention. So, have we experienced a ‘Great Retention’ to the same extent as we expected? While many statistics for the year aren’t yet available, initial predictions are that employee turnover rate in the UK is set to be 35.6%. Clearly there is still massive room for improvement when it comes to working conditions to improve employee retention. So, how have working cultures developed over the year?

Quiet Quitting

The tricky thing about retention statistics is that in isolation they fail to represent the proportion of workers who are still ‘quiet quitting’. This term was coined in 2022 and remained a phenomenon throughout 2023. It refers to workers becoming disengaged and unenthused with their organisation and doing the bare minimum requirements to fulfil their role.  

Employer Branding

In the modern workplace, culture is increasingly important and impacts an organisation’s reputation as an employer. This is especially important when it comes to retention. HR professionals have subsequently been required to become much more strategically aware. From initial onboarding to ongoing engagement to recruiting the right talent, HR departments play an integral role in an organisation’s employer brand. This concept is something that has risen to the forefront this year and is set to stay as a priority. 

Is there a ‘New Normal’?

Since 2020, businesses have been discussing a ‘new normal’. This reference to home working and hybrid contracts is absolutely integral to the HR industry. It impacts on the demands that employee logistics have on the HR team of any organisation. In addition, HR professionals must meet the challenges of balancing remote working with human contact. How has this been panning out over 2023, then?

Workplace Flexibility

Hybrid working has become a standard expectation for most office based roles. 2023 has continued to cement this, however in some industries there has been a marked move back to office based working. Could this be something to do with lingering high turnover rates that this year has seen?

Employee Mental Health

For many workers, flexible and hybrid working have a positive impact on life balance and mental health. As HR professionals, the conversation about maintaining mental wellbeing has increased in breadth this year. 

Technology

The HR industry, similar to many other areas, continues to evolve with ever more sophisticated technology. This has been a key feature of 2023, with the well publicised rise of AI becoming a standard tool in many businesses. So which areas of technology have been most prevalent, and how has this changed the way that HR professionals work?

Self Service

We’ve seen portal based software more and more in recent years. This technology is based on the principle that workers can self serve their services, from IT breakdowns to training and development. Where people would once have contacted HRpersonnel, this technology encourages them to source the information through information libraries or chatbots. The key to using this tech in a positive way is, however, very human. While streamlining administration is valuable, the resources must be strategically sound with a personal direction. If HR provision becomes too impersonal, this can really drive disengagement and contribute to problems such as quiet quitting.

Training

Lack of personal and professional development is one of the top reasons that job leavers cite for their resignation. A clear, constructive, and accessible programme of training is central to good HR. No more so has this become evident than throughout 2023. From a technology perspective, this year has seen an increase in good online training provision. Far from being a tick box exercise, organisations have embraced the software packages to enable good e-learning for their workforce.  With so much dialogue regarding employee wellbeing, it makes sense for this accessible training to be a core provision. The key is having the top HR talent to strategise and implement the right scheme. 

2024 in brief

So, where will next year take us? There are clearly aspects of HR operations that will continue on the trajectory that they have taking over 2023. Technology will continue to evolve, and life balance will continue to be sought by people both within and beyond HR departments. The key thing to bear in mind here is what this means for strategies and skillsets within HR departments. We’ll need another blog to delve into this deeper. One thing that we know will come into play, though, is regarding flexible working. 

Flexible Working Bill

Royal assent for the Flexible Working Bill was passed in July 2023, but the legislation is likely to actually come into place in early 2024. This means that it will be 2024 that sees direct changes from this bill. As well as workers having the right to request flexible working from the initial commencement of a new job, these are the key points to watch out for:

  • Employers must consult with the employee before rejecting a flexible working request.
  • Permission to make two statutory flexible working requests in any 12-month period.
  • Waiting time for decisions to be made is reduced from three months to two months.
  • There will no longer be a requirement for the employee to address any impact that their request might have on their employer.

Bearing all these trends in mind, then, what direction will the HR Industry industry move into next year? Watch out for our full 2024 predictions on the blog in the New Year.

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