Many of us believed that with the start of 2023, things will return to normal. Many executives thought that our return to work would just be a matter of a few short months after the introduction of vaccines.
However, 2021 proved to be more turbulent than anticipated due to the emergence of new Covid variations, a fierce talent competition, record-high leave rates, and the greatest inflation levels in a generation.
In 2023, the degree of volatility will only rise. When new variations continue to appear, it’s possible that offices will briefly become distant once more. Hybrid employment will increase the disparity between the hours, locations, and workloads of various employees. As annual compensation increases lag behind inflation, many employees will experience actual wage reductions. On top of longer-term technology change, ongoing DE&I endeavors, and ongoing political upheaval and instability will be these realities.
The following 11 fundamental trends will influence workplace volatility in 2023:
1. Fairness and equity will serve as companies’ guiding principles.
Whether the topic is racism, climate change, or the distribution of Covid vaccines, discussions that have justice at their center have sparked social unrest. Our survey of S&P 500 earnings calls shows that since 2018, there has been a 658% rise in the frequency with which CEOs discuss problems of equity, fairness, and inclusion.
And questions of fairness and equity are emerging in new ways:
- Who can find flexible employment? We have observed workplaces where some managers encourage flexibility while others don’t.
- What transpires when workers relocate to regions with lower cost of living? Although the impact of their labor hasn’t changed, should employers reduce their pay?
- In the current labor market, businesses offer new hires 20% salary premiums. Is paying new hires so much more than paying seasoned workers fair?
- Businesses are providing fresh, targeted investments for particular labor segments (e.g., additional financial resources to support employees with children). Employees 타이산게이밍 without children have questioned “Why are employees who are parents getting something and I’m not getting it,” despite the fact that these investments are crucial to helping those employees execute their jobs.
Executives will need to address their fairness and equity management strategies in 2022 as the employee experience becomes more diverse. In fact, this will be the HR executives’ top focus in 2019.
2. Despite a strong push from the Biden administration, a significant number of employers will not adopt a vaccine mandate, instead relying on testing to keep their workplaces safe.
Less than 2% of businesses intended to put a Covid vaccination obligation into effect in January 2021. Over the course of the year, that figure grew slowly before plateauing at less than 50% towards the end of 2021. Even with the growth of the Omicron variant, the number of businesses implementing mandates won’t significantly climb by 2023. Instead, to adhere to the Biden administration regulations, almost half of large firms will continue to offer testing.
There are numerous causes for this. First, companies worry that a vaccination requirement may result in a wave of mass resignations. According to a Gartner survey, HR directors anticipate that if they implement a mandate, approximately 7% of the staff will leave. Even while 7% might not seem like much and may perhaps be an overestimate, any turnover will not be distributed equally. 15% turnover rates are possible in particular departments and in certain regions.
Second, a lot of companies worry that a vaccine requirement might not stand up to a slew of ongoing legal challenges. They are wary of enacting a mandate that might be changed in the future given that risk.
Third, some businesses argue that this is still a matter of employee choice and that they do not have the authority to make this option for their employees.
Last but not least, there is ambiguity around what it means to be immunized (e.g., do you need a booster shot to be deemed immunized?) complicates the management of the entire operation. Even if it takes more work to manage a testing procedure, a sizable portion of businesses will continue to do so rather than enact a comprehensive vaccine mandate.
3. To compete in the war for knowledge worker talent, some companies will shorten the work week rather than increase pay.
In the current market, employers are providing big pay increases to entice and keep talent. According to our analysis, year-to-date salary gains in the United States have exceeded 4%, as opposed to a historical mean of 2%.
Real salaries have decreased, though, when inflation is also taken into account. Employers will discover that the salary they offer will have a decreasingly large purchasing power for employees if inflation keeps rising.
While some businesses can compete for talent solely on the basis of pay, others lack the financial means to do so. Some firms are reducing the amount of hours that employees work while maintaining pay parity, as opposed to trying to win the talent battle by raising remuneration.
In the past, leisure time has increased in value and attractiveness as wages rise. Less liquid employers have a greater chance of competing with businesses that offer higher overall compensation but don’t offer lower hours if they reduce the number of hours that employees must work. In the end, we’re likely to see a small number of companies implement 32-hour work weeks with the same pay as a new strategy for vying for knowledge employees.
4. Employee turnover will continue to increase as hybrid and remote work become the norm for knowledge workers.
Flexibility in terms of when, where, and how individuals work has become standard practice rather than a differentiator. Employees in the US expect 401(k) plans as much as they do employment flexibility (k). Employees will move to roles that offer a value proposition that better matches with their preferences, which will result in increasing turnover for employers who don’t offer flexibility.
In today’s competitive labor market, greater flexibility will not, unfortunately, reduce turnover; on the contrary, turnover will rise for two reasons.
First, there will be less powerful forces keeping workers in their positions. Workers who work remotely or in a hybrid arrangement have fewer friends at work and, as a result, less of a social and emotional bond with their coworkers. Because there is less social incentive to stay longer due to these weaker links, it is simpler for employees to leave their jobs.
Second, as the number of firms grows, there will be stronger forces pulling workers away. The range of firms that a person can work for geographically widens as hybrid and remote employment become the norm. Even in a hybrid model where workers are expected to visit the office at least once per week, there is still an elevated risk of attrition. When commutes are required less frequently, employees are considerably more willing to accept a longer commute, and the pool of potential employers grows along with this tolerance.
These factors will lead to sustained, higher turnover rates compared to any historical norms. The great resignation will shift to the sustained resignation.
5. Managerial tasks will be automated away, creating space for managers to build more human relationships with their employees.
As managers are the main point of contact for hybrid and remote workers with their employers, the manager-employee relationship has never been more crucial. Managers are also the first to identify and address issues about fairness, and they have the power to prevent a highly visible walkout in favor of a cooperative solution to the problem.
A growing variety of repetitious administrative duties, like scheduling, approving expense reports, and keeping track of the work that direct reports are assigned, are being replaced by products developed by HR software providers at the same time. The next wave of technology will begin to take over other managerial responsibilities including giving performance feedback and assisting staff in forming new peer relationships. According to our analysis, by 2025, up to 65% of the duties that managers today perform could be automated.
Companies will have to decide whether to reduce the number of managers or alter expectations for what it means to be a manager as a result of the development in automation.
Companies can lower labor expenses by using organizations that spread managers’ areas of responsibility over more direct reports because they’ll need fewer managers overall. The mindset and skill sets of managers will need to alter for organizations that decide to shift the expectations for their managers from managing tasks to managing the entire employee experience. Managing employees’ perceptions of their career paths, the effect of work on their personal lives, and their relationship with the company as a whole are all included in this, in addition to managing their specific tasks. While this change may slow attrition, it calls for significant manager empowerment.
6. The tools that we use to work remotely will become the tools that help measure and improve performance.
Managers have less knowledge of the work that their staff members are performing as work gets more geographically scattered. As a result, employees’ performance is inaccurately and even biasedly evaluated based on their workplace rather than the influence they are having. According to a Gartner survey of over 3,000 managers conducted in the fall of 2020, 64% of managers and executives believe that in-office workers perform better than remote workers, and 76% believe that in-office workers are more likely to be promoted.
In the future, it will be possible to evaluate employee contributions using the same technologies that employees use to work virtually now. For instance, new technology will be able to give background information about the other callers during virtual meetings. Participants will be better able to concentrate on the topics that are most important to them by getting to know the other people on the call.
Technology used in collaboration can also encourage employees to act in ways that enhance their interactions with one another as a whole. For instance, it can prompt meeting organizers to invite participants who haven’t been as engaged as the others. Participants will change the kinds of interactions they have as a result of these proddings, which will enhance the effectiveness of the meeting.
7. The complexity of managing a hybrid workforce will drive some employers to require a return to the office.
In 2022, more than 90% of firms expect to transition their knowledge workers to a mixed working environment. While that will define the beginning of the year, we anticipate that many well-known businesses will rethink their strategies and demand that workers come back to work full-time. The following factors will contribute to this shift:
- Poor business performance that CEOs try to explain away as being caused by hybrid work
- Heightened turnover of employees working a hybrid schedule
- Anecdotal reporting of hybrid employees working multiple jobs at the same time
- Perceived loss of organizational culture
Organizations who follow a strict return to work policy, however, will rapidly discover that the problems they were having were the result of other, more fundamental causes. Demanding workers to come back to the workplace will only make turnover rates worse.
8. Wellness will become the newest metric that companies use to understand their employees.
Executives have been experimenting with various indicators, including employee engagement or happiness, for years in an effort to better understand their workforce. Organizations will introduce new metrics in 2022 that evaluate their emotional, financial, and physical well-being.
In the wake of the epidemic, many businesses increased the wellness assistance they offered to their employees. 52 HR executives were surveyed by Gartner 2020, and the results showed:
- 94% of companies made significant investments in their well-being programs
- 85% increased support for mental health benefits
- 50% increased support for physical well-being
- 38% increased support for financial well-being
For individuals who benefit from them, these programs are effective. According to a Gartner analysis, employees who take use of these perks are 23% more likely to claim they have good night’s sleep, have 17% higher levels of physical health, and have 23% greater levels of mental health. Higher levels of performance and retention are a result of these gains in personal outcomes.
The employee take-up of these programs has been modest, though. Our data over the past 12 months reveals that fewer than 40% of employees have utilized any well-being benefits offered by their employer.
In order to more correctly anticipate employee performance and retention, firms will implement new employee well-being measurements in 2022 that encompass the financial, mental, and physical wellness of their staff.
9. The chief purpose officer will be the next major C-level role.
Politics, culture, and social issues are now prevalent in the workplace. Organizations are attempting to establish a more inclusive and effective work environment, therefore employees are being challenged to bring their complete selves to work. Compared to ten years before, when employees were expected to leave their personal viewpoints “outside the door,” this is significantly different.
The majority of workers, according to a Gartner analysis, want their employer to have an opinion on current cultural and political debates. Workers also expect their employer to become more involved in these debates.
A Gartner 2020 poll of more than 500 employees found that the sum of these variables is causing conflict in the workplace, with 44% of respondents actively avoiding peers due to their political viewpoints. Also, according to a Gartner analysis, when workers are dissatisfied with their employer’s position on current social and political issues, employee engagement can fall by one-third.
The chief purpose officer will be the next new key C-suite position to appear in 2023 as a result of how firms are changing in terms of how they relate to their communities, employees, and role in society. At the moment, these duties are dispersed throughout the organization’s HR, legal, communications, and other positions. They will be combined into one new position in 2022 as ESG gains increasingly more significance for company strategies.
10. Sitting is the new smoking.
Employees have been impacted by the transition to remote work in different ways. Some people responded by increasing their physical activity and losing weight (35%); however, more people became more sedentary (40%) and gained weight, perhaps as a result of the reduced physical activity brought on by traveling to and from work-related meetings. The health risks posed by some remote employees will increase due to the disparity in physical mobility between labor groups.
In response, businesses will implement new communication strategies, perks, and technological advancements to encourage their remote workers’ physical activity and overall wellness. Similar to traditional wellness programs, participation in these physical wellness programs will frequently be somewhat low, and some organizations may overstep their bounds and provoke a reaction from workers who do not believe their company should be involved in their physical health. These physical wellness initiatives pose DE&I risks as well because they may have a negative impact on the engagement of employees with impairments.
11. DE&I outcomes will worsen in a hybrid world without intervention.
According to a Gartner analysis, employees who work remotely or on a hybrid schedule do as well to those who work in an office. Managers, on the other hand, think that those who work from the office are more productive and likely to advance than those who work from home. High-profile senior CEOs making public comments about how poorly hybrid and remote personnel perform only serve to propagate this false notion. As there is no consistent performance difference between the two groups, managers are more inclined to promote and offer larger raises to their employees who come into the office than to those who don’t.
According to data, women and people of color prefer working from home to white men in a hybrid society. Considering this, if nothing is done, the gender pay gap will expand and the level of diversity among the leadership ranks would decline. Without more deliberate efforts, minority talent can be left out of important discussions, job chances, and other networks that promote career advancement.
In a hybrid environment, data also demonstrates that women and people of color favor working from home more than white men. Due to this, if nothing is done, the gender pay gap would expand and the level of diversity within the leadership ranks will decline. Without more conscious effort, minority talent may be left out of important discussions, job possibilities, and other networks that promote professional development.
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