8 HR Industry Trends to Shape 2023 and Coming Years
Since 2020, there have been massive shifts in how employees and HR operate in the workplace. Every year, HR industry trends indicate more improvements to the employer-employee relationship with HR getting a bigger role to play. This year, 2023, will be no exception.
Employees today have bigger expectations of what HR teams and employers can and should do. In addition, employees have learnt their lesson when it comes to their mental health and well-being.
But it seems many companies are still unaware of how much an employee’s mental health can affect the company.
According to McKinsey “When employers invest in the health and well-being of their workforce, they have often made gains in productivity and reduced attrition.”
In the Middle East and North Africa (MENA), including the Gulf Cooperation Council (GCC), employee mental health remains an issue.
Research by The Talent Enterprise found that 8 out of 10 employees (80%) in the GCC aren’t comfortable discussing their mental health at work. That’s compared to 5 out of 10 employees (50%) in Europe and North America.
Employee well-being and mental health have been and continue to be one of the hot HR industry trends in recent years. That’s both globally and in the Middle East.
So, what HR trends can employers expect in 2023 and beyond? Read on to find out. We’ll also be exploring trends in HR management and how HR can help organizations grow and become more sustainable.
Why HR industry trends matter?
Whether you’re an employer or HR executive, you need to keep an eye on trends in the HR industry because
- they affect the way you work.
- they can help you support your company’s growth strategies.
HR trends not only focus on the ‘human resources’ aspect, but also on the business environment as a whole. Trends in the HR industry also cover evolving employee needs, changing business and workplace policies, and technology.
The business world is heavily impacted by “world events and societal shifts,” both of which affect “how employees and companies approach daily operations.” (Indeed)
Over the past three years, a pivotal HR industry trend has been employees’ growing need for flexible work opportunities. But with many employers resuming full-time in-office work, who will strike the balance?
Since the pandemic began to wane, many companies began returning to the office full-time. Meanwhile, many employees across the MENA region, and the world, have found more benefits in working remotely. A mid-way solution has been hybrid work places.
Still, many companies may be missing out on talents who aren’t willing to go back to the office full-time.
HR industry trends for 2023
So, what does the HR industry need to keep an eye on in 2023?
Let’s find out with the following HR industry trends. The next section focuses on trends in HR management.
1) Growing focus on employee mental health
Since 2020 forced millions of employees to work from home full-time, many employees, and their managers, suffered from burnout. Since then, many employees began focusing on their mental health and well-being.
Employers too have begun to understand the importance of employee well-being. Managers now realize the negative impact burnout has on their employees, their teams, and the whole organization.
But in the Middle East, we’re not ‘there’ yet.
A McKinsey survey of 4,000 employees found that two-thirds of respondents from the GCC “reported symptoms of poor mental health and well-being.”
Meanwhile, The Talent Enterprise reported that 4 in 5 managers felt they were “not fully equipped to have meaningful conversations” about mental health and well-being with their teams.
The McKinsey survey included employees from Saudi Arabia, Kuwait, the UAE, and Qatar.
2) Rising use of AI in recruitment
Artificial intelligence (AI) is becoming part and parcel of every industry and business today. HR is no exception. But there are different types of technology and AI involved when it comes to human resources.
One of the areas combining HR and AI is recruitment and hiring. More tools and software are emerging to help HR and hiring managers hire better and faster.
3) More employee engagement
Employee engagement is a bit of a new trend in the MENA region. But companies that know how to engage and empower their employees reap many rewards. Chief among those is higher employee retention and better employer branding.
In 2023, HR teams need to focus on employee engagement and empowerment, which will serve their companies’ overall sustainability goals, notes HR expert and author Dr. Mahmoud Mansi.
“HR should create employee rewards systems to encourage employees to volunteer both in the company’s corporate social responsibility (CSR) initiatives and on their own,” Mansi explains.
In addition to employee rewards, HR teams should create a performance management system along with key performance indicators (KPIs) that encourage employee engagement and volunteering.
Trends in HR management for 2023
Now, let’s look at the top trends in HR management.
1) Focusing on sustainable development
One of the top trends in HR management in 2023 and in upcoming years is “focusing on sustainable development and creating sustainable organizations,” stresses Dr. Mansi.
A major trend in HR management in 2023 is “focusing on sustainable development and creating sustainable organizations,” stresses Dr. Mansi. He adds that this is a trend that will affect 2023 and the years to come.
2) Reviewing the employee lifecycle
An HR industry trend–one that should be ongoing in my opinion–is to constantly review and develop the employee lifecycle.
The employee lifecycle begins with a company’s hiring needs all the way to compensation and benefits, passing through promotions, and extending to layoffs and exit strategies.
Companies working with HR consultancies should also request this. They can ask their HR consultancy company to provide them with a regular employee lifecycle review.
It’s worth mentioning that the employee lifecycle isn’t the same as the recruitment cycle, which only forms a part of it. Moreover, if the employee lifecycle isn’t part of your current HR strategy, it should be.
3) Closing the skills gap through employee learning
Wherever you are in the world, whether you’re an employer, recruitment specialist, hiring manager, or someone in-between, you’ve probably heard of the growing skills gap.
Employers’ needs are evolving but employee skills, especially those from junior employees and fresh graduates, aren’t keeping up. The result? A widening skills gap.
The Academy To Innovate HR (AIHR) stresses that if employers don’t provide “enough up-skilling opportunities, [they] risk falling behind the competition.” (AIHR HR Trends Report 2023)
If employers want to grow their business, they’ll need to invest in their employees and equip them with the skills they need.
Up-skilling employees, that’s providing them with training and workshops to enhance their skills, serves the employee and employer alike.
The employee gains the skills they need to perform their job better and become more productive. Meanwhile, the employer enjoys higher productivity from their and subsequently better results.
Not only do employers need to up-skill their employees, but also their team leaders and managers, who manage those employees.
4) Redefining remote and hybrid strategies
The pandemic has changed the way people and businesses work and operate. But since 2022, more businesses have resumed in-house working.
Meanwhile, many employees prefer the work-from-home or remote working alternative, citing its many benefits.
The solution to this dilemma has been hybrid work.
In February 2022, LinkedIn reported that remote jobs in the United States had “received 50% of all job applications.” That’s despite remote jobs representing “less than 20% of all jobs posted.”
What does this show? More people are looking for remote jobs. But are companies aware of this?
While this data is for the US, it’s not that different in the MENA and GCC regions. More people are looking for remote jobs.
Unfortunately, few companies have maintained their remote-work option. Luckily, others have realized this and offer the middle ground option known as hybrid work.
A prominent trend in HR in 2023 is creating a balance between the needs and wants of employees and companies. This balance offers HR leaders the opportunity to establish better remote work policies.
In creating better work policies, HR leaders not only can attract talents but also retain those talents.
5) Including employees in organizational growth
Another trend in HR management is making all employees a part of the company’s growth.
In most companies, growth is limited to the strength of the marketing and sales teams. However, this is not, and should not be, the case.
HR leaders should “encourage employees to submit ideas and plans to help their organization grow and become more sustainable in terms of productivity and day-to-day operations,” stresses Dr. Mansi.
HR teams can do so by “expanding employees’ job descriptions to become more innovative. They should give them the opportunity to provide input to support the organization’s growth,” he explains.
But how can HR do that?
“There are two ways for HR to do this:
1) They should increase employee awareness.
2) They should re-engineer the HR system to support employees.”
By looking at trends in the HR industry, HR teams and company management can get a better understanding of the changing work environment.
The business world isn’t just about companies. Not anymore. Businesses need to realize this early on or they’ll suffer bad employer branding, quiet quitting, or higher employee turnover.
The Middle Eastern, especially the Egyptian, hiring market is full of youth looking for jobs. There’s also a large number of employees looking for new challenges or better work-life-balance.
Employees are mindful of their needs and many aren’t afraid to quit to maintain their mental health and well-being. Which puts companies at an impasse.
However, by looking at these trends and understanding the steps they–HR and management–need to take, they can mitigate many of the causes of employee turnover. They can also avoid the various hiring mistakes they make–or used to make.