Trend #1: Inflation and an impending recession will force workers and businesses to take action
In 2023, both workers and companies will be deeply affected by inflation and the rising costs of living and doing business. Many are already taking action to drive growth, cut costs and mitigate risks. This includes building protective measures into supply chains to deal with shortages and rising logistical costs. Some companies may even encourage more of their staff to work remotely, which can save thousands of pounds per employee annually.

Businesses are also slashing their workforce as a way to cuts costs, despite the ongoing labour shortage. PwC finds that more than eight out of 10 chief human resource officers (CHROs) said they’re cutting jobs, freezing hiring or employing other tactics to reduce staff. At the same time, US pay budgets are expected to rise 4.1% – a 20-year high – to keep up with inflation, and so companies can ensure that their most talented team members don’t jump ship for a better opportunity elsewhere.

But the reality is that this won’t keep up with inflation, and that’s why among workers, boosting their income will be a top priority.

Trend #2: Career mobility and upskilling will be top priorities for employees
LinkedIn’s ‘2022 Global Trends Report’ reveals that upskilling and opportunities to grow at their current company are two of the top priorities for today’s workers, coming in only behind compensation, work-life balance and flexibility. This is partly due to the pandemic, and also the result of shifting job requirements and an uncertain job market, all of which have left people feeling unprepared for their next career move and desperately in need of more support.

In fact, new research from my company and Amazon reveals that 58% of employees are afraid that their skills have gone stale since the onset of the pandemic and 70% feel unprepared for the future of work. Moving into 2023, however, workers are laser-focused on remedying this situation: 89% said they’re motivated to improve their skills this year and 88% are already putting a significant amount of time and effort toward this.

But people need more support from their employers – around two out of three workers said it’s likely they’ll leave their company this year because there aren’t enough opportunities for skills development or career advancement, or because there’s no way for them to transition to a different job or a new career path. For 2023, this presents a compelling opportunity for businesses to retain their current workforce and attract new talent by offering better learning & development programmes.

Trend #3: Employers will enhance their benefits to give workers a financial boost
Given the ongoing labour shortage, it’s no surprise that many large employers are planning benefit enhancements for 2023. One thing we’re sure to see is an increased expectation for employers to help people with their financial situation. This includes offering more affordable benefits, as well as providing tools and programmes designed to bolster employees’ financial well-being, such as tuition reimbursement.

But while workers expect their companies to improve traditional benefits (eg. pension matching), they’re also looking for new offerings like an emergency savings fund, mortgage assistance or even being paid in cryptocurrency.

Trend #4: Companies will continue to ramp up their mental health support
While employers have significantly improved their mental well-being support over the past few years, it’s clear there’s still a long way to go. 

In the US, for example, the situation is so critical that just last month, the US surgeon general released a new Framework for Mental Health & Well-Being in the Workplace, citing reports of “quiet quitting”, the Great Resignation and the changing the nature of work. The framework is a call to action for employers, and it’s also part of President Biden’s strategy to transform mental health services for all Americans.

Trend #5: Businesses will focus on optimising hybrid and remote work models
Several years after the Covid-19 pandemic ushered in a new era of remote work, many companies (and their employees) have now settled into hybrid or fully remote work arrangements. Among all full-time workers, it’s estimated that around 15% are fully remote, 30% are in a hybrid arrangement, and the remaining 55% are fully on-site. Notably, among workers who are able to work remotely, the hybrid model dominates.

Although the shift to remote work has largely been beneficial, dispersed team members have faced new challenges. Research from my company and Airspeed found that at least one out of three remote workers feels lonely, disconnected or isolated, and most people don’t feel that their co-workers care about them. The situation is so dire that two out of three executives believe their employees may quit for a job at another company where they’d feel more connected.

Going into 2023, It's critical that employers address this issue, since a lack of connection has also been shown to affect motivation, productivity and creativity. We’re likely to see many companies take advantage of the abundance of technologies that have entered the market specifically to support remote and hybrid workforces – from virtual offices tools and solutions designed to optimise hybrid offices to platforms designed to help employees socialise and develop stronger relationships. 

Trend #6: Workers will persist in their fight for greater flexibility
Going hand-in-hand with the previous trend, in 2023 we’ll also see workers continue to demand greater flexibility, especially the ability to work remotely.

We’ve also seen that some companies, most notably those in the financial services sector, are moving full speed ahead with their return-to-office plans, citing their in-person culture and the need for young workers to interact with their colleagues. However, a recent survey found that two-thirds of workers said they would resign if required to return to the office full time. A remarkable 40% said they’d consider quitting even if they were asked to come into the office only one day per week.

With an impending recession, it may be tempting to demand that workers return to the office in 2023 as a way to boost their productivity. However, employers should recognise that multiple studies have confirmed that employees are just as effective working remotely as they are in-person. And given how likely people are to resign if their remote work benefits are taken away from them, I believe companies should reconsider their remote work strategies if they want to stay ahead in the war for talent next year.

Trend #7: The ongoing talent shortage will dominate business decision-making
This high ratio of job openings to applicants means that despite a potential recession, some companies may choose to hold on to their current workforce rather than laying people off, a practice known as labour hoarding. For many workers, it’s a sign that they still have the upper hand in the job market, and they may not need to worry about layoffs as much as they thought they would. Some job applicants choose to ‘ghost’ potential employers because they have so many job options available to them.

Faced with this challenging dynamic, employers will need to reconsider their workforce retention strategies or they could find themselves facing an even worse talent shortage. That’s partly because today’s employees are much more willing to change jobs if they’re dissatisfied; for example, my company’s study with Airspeed found that 62% would take another job for only a $1k (£870) sign-on bonus. Businesses should focus not only improving compensation, but also on creating more meaningful work experiences and driving holistic employee well-being.

Trend #8: Automation and AI will enter the workplace in new ways
In 2023, we’ll see companies investing in these technologies for new areas of the business – including their white-collar offices. It’s well-known that many of the latest technologies can now perform traditionally ‘human’ tasks like speech recognition, as well as information-gathering, organisational and calculation tasks.

In most cases these technologies are designed to support workers and eliminate some of their repetitive tasks – not replace their jobs entirely. For example, in call centres an AI chatbot could be used to gather basic customer information before passing on the call to a human agent. And replacing some agents with AI chatbots could save the call centre industry billions in labour costs each year.

Trend #9: Web 3.0 technologies will transform all aspects of people’s lives
In 2023, we’ll see a growing number of companies invest in Web 3.0 technologies to enhance and modernise their workplaces. While Web 2.0 revolutionised how we interact with each other online, Web 3.0 is a paradigm shift from a centralised internet to a decentralised virtual world underpinned by blockchain technology. Innovative technologies from NFTs (digital assets) to blockchain (digital verification) to metaverses (virtual worlds) are already changing how we work and live, and it’s only the beginning.

Earlier this year, I spoke with executives from IBM, Meta, WebEx and PwC to hear their perspectives around this timely topic. Central to my discussion with them was the idea that Web 3.0 technologies, for example virtual reality (AR) and augmented reality (AR), will increasingly be used to create a more inclusive environment for workers, regardless of their physical location. These technologies will also provide a more personalised, enriched and productive workplace.

Employees will benefit from Web 3.0 technologies in other ways as well. In my company’s study with SoFi, we found that 42% of employees would like the option to receive performance rewards in the form of NFTs, and 36% are interested in being paid in cryptocurrency. There are so many applications of Work 3.0 that haven’t been conceived yet, but leaders I’ve connected with are already experimenting and piloting their solutions as we speak.

Trend #10: Pay transparency will become the new normal
For years, employees have lamented the lack of transparency around their salaries. Whether a worker wants to know how they stack up within their own company or if they’re looking for a job somewhere else, it can be nearly impossible to determine the pay rate for a role. Furthermore, all of the secrecy around salaries has only allowed longstanding gender and racial pay gaps to continue to widen.

But the ball is already rolling for this to change, and in 2023 we’ll see it gather even more momentum. Many US states have pay transparency requirements, and New York recently joined this list at the beginning of November. And the US isn’t the only place where progress is happening — for example, the EU Pay Transparency Directive will come into force in 2024, although some EU countries already have their own laws around this.

The transition to greater pay transparency certainly won’t be easy for employers. Some may need to adjust the salaries of their current staff so that everyone feels they’re being paid fairly. But the end goal of this shift – more equitable pay – will certainly be worth the effort. Employers should also remember that being transparent about pay can help boost retention and it can even increase worker productivity by around 10%.

Dan Schawbel is managing partner at Workplace Intelligence

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