The past two years have been challenging to say the least. The COVID-19 pandemic, Ukraine-Russia war, among others, have disrupted the ways of working and propelled markets to evolve and adapt at a rapid pace. This has also impacted the landscape of the work environment and the role of human resources today.

Today, the power balance between bosses and employees is shifting. Employee well-being, hybrid work models, and workforce ecosystems will continue to evolve in the next year. Business leaders are likely to focus on communication, skills development, and relationship management. At the same time, technology will continue to have a profound impact on workplaces. Here are some of the key trends that will be shaping human resources in the workplace in 2023.

Holistic focus on total well-being of employees

Awareness of employees’ mental health and well-being has accelerated during the pandemic. Reports of employees feeling burnt out, high resignation rates due to the blurring line between work and personal lives, and existing employees who are quietly “quitting” – all these have left HR scrambling to relook at their existing plans and introduce measures aimed at improving employees’ mental well-being. Ironically, this resulted in HR feeling burnt out themselves, with a staggering 98% of HR professionals feeling burnt out in their role in the past 6 months.

The first trend in 2023 is looking after the unsung heroes of the Great Resignation, HR. While the HR function is expected to look after others, HR needs to ensure they are capable of doing so – and this means looking after their own well-being.

The next step is to take a holistic approach towards employee well-being. This means focusing on three key aspects: mental, physical and financial. Mental well-being interventions may include building an acceptance culture around mental wellness and introducing multiple support channels to help struggling employees. Physical well-being interventions aim to promote healthy lifestyle and habits among employees. Finally, financial well-being interventions will focus on building financial acumen and providing employees access to financial coaches and education. In 2023, HR will focus on the total well-being of its employees, starting with their own.

Managing multiple workforce ecosystems

Workforce ecosystems in 2023 will continue to be synonymous with physical, remote and hybrid workforce. While HR has traditionally focused largely on its full-time workforce, the last two years has shed the spotlight on the gig economy. In about 40% of companies, one in four employees is a gig worker and this group of gig workers is expected to grow by 17% in 2023. This means that a huge chunk of this workforce goes unmanaged by HR.

In 2023, HR is expected to start managing multiple workforce ecosystems that goes beyond its permanent employees. This would mean being actively involved in taking care of its contingent workers – the freelancers, part-timers, and contractors. It could also mean extending the same people practices as permanent employees with these contingent workers. With today’s highly-competitive talent market, these groups of contingent workers play a critical role in filling the talent gaps.

Redefining hybrid and flexible work models

The pandemic has clearly accelerated the flexible and hybrid work models in traditional workplaces. It is proven that employees are equally, if not more, productive without having to be physically in the office. Yet, there seems to be two schools of thoughts when it comes to the hybrid work model. Business leaders are increasingly concerned about employee and culture disengagement should they implement a hybrid work model. Yet, employees today expect organisations to have some form of hybrid or flexible work model, with 53% of employees expecting a hybrid arrangement and 24% expect to work exclusively remotely.

Clearly, employees have developed an affinity for hybrid-flexible work arrangements. And 2023 is when HR will take a leading role in shaping the hybrid and flexible work model going forward. This means setting clear policies on when and how work is done. Concurrently, it also means redefining how employees’ performance is being evaluated with the “lack” of face time. HR needs to train managers and themselves on how to overcome proximity bias, which is an unconscious tendency to perceive someone who is frequently physically present as more productive than a remote worker. Objective performance evaluation metrics and promotion criteria and metrics will be put in place in anticipation of the new model of working.

Embracing artificial intelligence HR and metaverse

Technology has been helping organisations achieve business outcomes and artificial intelligence (AI) has been shaping the way people interact with technology. Today, AI is an integral part of any organisation and its usage is steadily rising within the HR function. In fact, 50% of workers are already using some form of AI in their work, according to a study by Oracle. Interestingly, the same study found that 65% of workers are optimistic, excited and grateful about having robots as co-workers. And this trend is expected to continue in 2023. Virtual career fairs, robo-career coaches, and virtual employee onboarding will gradually be a norm in 2023.

The metaverse is also expected to take shape within the HR function in 2023 and beyond. With organisations already experimenting with virtual and augmented reality in the wake of the pandemic, this should come as no surprise. The metaverse will help to propel a more inclusive employer brand and create more engaging interactions with employees regardless of their location. HR will play a critical role in defining healthy metaverse policies and practices as well as guide leaders in managing employees in the metaverse workspace.

Evolving role of CHRO and creating a purpose-driven organisation

The role of CHRO today has evolved. In the wake of a global pandemic, war-stricken cities, and economic crisis, top management and board members look to the CHRO to lead and respond when it comes to business continuity, human capital policies and employees safety and productivity. The CHRO today is expected to continue acting as a trusted advisor to the CEO and its board members.

Additionally, the CHRO and HR function is expected to drive a purpose-led organisation in 2023. While money matters, employees today also value meaning at work. At the same time, Millennials and Gen Z employees, who form the largest proportion of the workforce today, value personalised career experiences. These indicate that a purpose-driven organisation is a key differentiator when it comes to attracting and retaining key talent. It may include creating authenticity within the organisation, stimulating individual learning, and gathering feedback on a common purpose among employees. When creating a purpose-driven culture is done well, it fuels an engaged and productive workforce for the organisation.

2023 is undoubtedly going to be an interesting year for HR. There are bound to be challenges, with HR having to first take charge of its own well-being and building its own resilience. That will help to set the stage for them to boost the well-being of employees and the entire organisation. Secondly, organisations need to realise that the hybrid work model is here to stay. And HR and managers need to work closely in order to optimise the skills sets and ability of a diverse workforce ecosystem. Finally, business leaders need to understand that an organisation is no longer just a profit-generating structure, but one that can drive meaning and purpose for an engaged and productive workforce. Capitalising on new technological tools, such as AI and metaverse, can help to drive further inclusivity and engagement with diverse groups of employees. The future of work has changed, and HR holds the power to drive strategic impact through its people.

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