The intersection of a cost-of-living crisis, growing demands for flexible working, labour shortages, and rising importance of employee experience are set to make 2023 an interesting year for HR professionals. To maintain a competitive edge and stay ahead of the competition, HR departments need to know what they’re facing. We’ve identified the 7 key trends in HR and Recruitment that all HR professionals need to know about.

7 Key HR and Recruitment Trends for 2023

Recruitment Challenges

According to the British Chambers of Commerce (BCC), businesses are now grappling with the ‘highest level of recruitment difficulties on record.’ Citing an ‘anaemic economy and low productivity’, the BCC called on the government to take necessary steps to help alleviate labour pressures for businesses.

Due to a shortage of workers, HR may find itself unable to fill key vacancies or plug critical skill gaps. That’s why agile and flexible approaches to internal mobility of talent will be so critical through 2023 (more on this below).

Cost of living

The cost of living crisis is on everybody’s mind. Elevated financial strain, which is likely to continue for the foreseeable future, will undeniably impact HR and recruitment through the first few quarters of 2023 at least.

In this context, it’s unsurprising that WorkNest found that 70% of surveyed HR professionals view the cost of living crisis as their most significant challenge for 2023.  Some key knock-on effects of the current economic environment are likely to include minimised or halted recruitment drives and/or head count freezes, as well as slashed budgets.

How employers can support employees with cost of living

Employers will also need to consider ways to support their employees through this tumultuous period. Those with the scope and available resources might consider offering a cost-of-living bonus to try and ease their employees’ financial worry. Meanwhile, HR professionals may find themselves dealing with more requests for pay-rises to align with inflation.  

HR departments will play a pivotal role in reviewing and adjusting compensation packages, as well as flagging potential payroll and tax implications. It will also be important to proactively raise awareness about existing benefits and perks that employees may not have taken advantage of.

HR professionals should also look to embed alternative support mechanisms  in response to the cost of living crisis. This could include establishing safe, supportive and open lines of communication or facilitating financial literacy and wellbeing education to help employees take control of their finances.

Benefit Schemes

Employee benefits will become even more important as employees seek to take advantage of any cost-saving schemes. HR professionals should take the initiative on introducing additional benefits such as employee discounts, bike to work schemes, or even private health insurance.

Remote work & flexible working arrangements

Employees want more flexibility

Balancing requests for remote, hybrid or flexible working arrangements with the ensuing logistical, bureaucratic and potential business implications will be an ongoing conversation through 2023.

Even as we move further out of the pandemic, employees continue to seek out jobs that empower them with flexibility. But flexible working and hybrid working are not synonymous, as pinpointed by research undertaken by the Achievers Workforce Institute. Is it possible that employers offering a compromise model of ‘hybrid’ working are missing the mark?

Is flexibility the future? 

Crucially, work flexibility is now a key motivation for moving jobs - on par with career progression. But it’s not just the employee that reaps the benefits. Indeed, businesses should see ‘higher productivity and staff retention’ as a result of flexible working arrangements.

The proposed Employment Relations (Flexible Working) Bill, which is approaching its 3rd reading in parliament, addresses this head on. It will give employees the statutory right to request flexible working twice within a 12 month period from the day that they start working at a company.

It’s clear, therefore, that overlooking calls for flexibility could have serious consequences for employee retention rates and overall engagement. HR departments need to proactively seek out, listen to and act on employee feedback with regards to working arrangements. As a result of the Flexible Working Bill, HR departments may also find themselves processing flexible working requests when they onboard new employees.

But this is no bad thing, considering that flexibility seems to be the key to maintaining a competitive edge within the job market and increasing employee retention.

Four-day week

Building on the notion of alternative working arrangements, 9 out of 10 companies that participated in a recent trial of a four day work week in the UK will continue to do so. Will this signal a change in the way we approach time commitment, work and compensation?

Focus on employee wellbeing

Employee mental health and emotional wellbeing is set to be a core theme for HR professionals, with 75% citing it as their most important focus in 2023. This is especially pertinent given the damaging impact of the cost-of-living crisis on emotional, mental and financial wellbeing.

Mental health & wellbeing at work

With ever-increasing public awareness around the importance of mental health, 97% of professionals now believe that it is employers’ responsibility to support the mental health and wellbeing of their staff. Not only is this important for boosting morale, demonstrating employee value and improving employee experience, but also in terms of recruitment. Since 88% of professionals now take the mental health policies of a potential employer into consideration when looking for a new role, slacking on this front could be detrimental to recruitment efforts.

HR departments should be working with top-level leadership to design comprehensive mental health and wellbeing policies, as well as add benefits in this area. They will play a decisive role in rolling out mental health training for key staff, as well as ensuring the proper and active implementation of these policies.

In terms of recruitment, HR professionals should make sure to highlight their company’s stance and approach to mental health to potential candidates.

Employee experience

The interrelation of a positive employee experience (‘EX’) with deeper engagement at work, increased productivity and talent retention is well-known. And HR plays a big part in ‘clarifying the meaning of purpose, value and culture’ which directly impacts employee satisfaction and overall retention.

Establishing EX as an organisational priority throughout the employee lifecycle should be a key focus for HR professionals throughout 2023. You should be thinking of EX at every stage of the employee lifecycle - even during recruitment.

By ensuring that job candidates are the right ‘fit’ for both the position and your company culture, you can make sure your new recruits start with their best foot forward.

Streamline recruitment for better employee experience (EX)

Additionally, doing your best to optimise candidate experience by minimising time to hire and leveraging streamlined tools like RefNow is essential for that all-important first impression. Relying on out-dated word documents and lengthy email attachments not only leads to delays, but also creates the impression that your company is ‘behind the times’. By contrast, harnessing a unified platform that offers a smooth user-journey shows your potential recruits that you understand the importance of streamlined workflows and the tools that facilitate them.

Onboarding is also a pivotal moment for smooth assimilation and this should set the tone for the employees’ overall experience working at a business. Again, drawing on unified tools to streamline your onboarding process will not only reduce your administrative load, but welcome your new employees with a smooth workflow. Regular check-ins and feedback sessions should also be a core part of the onboarding process since they  give HR professionals the opportunity to address any dissatisfaction head on.

Quiet Quitting, Quiet Firing & Quiet Hiring

‘Quiet Quitting’, ‘Quiet Firing’ and ‘Quiet Hiring’ are the three buzzwords that HR professionals need to know about and address in 2023.

Quiet quitting

‘Quiet quitting’ refers to employees who work only to the required standard for their contracted hours with minimum effort or enthusiasm. Arguably a symptom of an emotional divestment from the workplace and its culture, quiet quitters withdraw from what Harvard Business Review calls ‘citizenship behaviours’.

Though on the surface, quiet quitting doesn’t seem like anything to worry about, it might point to a deeper problem. Even if employees are performing their contracted tasks, their apathy towards ‘going above and beyond’ and their disengagement from company culture could have a negative impact on overall output, productivity, and in the long run, employee retention.

Quiet firing

‘Quiet Firing’ is where the absence of necessary support frameworks or satisfactory career prospects and progression pushes employees out. This scenario calls for a fundamental overhaul of talent management to ensure that workers are supported through each stage of the employee lifecycle.

HR departments experiencing elevated turnover may want to reassess their approach and strategies to improve their employee experience.

Quiet hiring

‘Quiet hiring’ - the antithesis of and reaction to ‘quiet quitting’ - involves employers tasking existing employees with new responsibilities, capitalising on their skills (or investing in upskilling them) and filling key hiring gaps without having to increase their headcount or recruit externally.  In a recruitment crisis, this touches on the importance of effective talent management, future strategising, and a focus on internal talent mobility.

Effective ‘quiet hiring’ requires HR departments to leverage data on employee performance, potential and skills to better situate them within their talent ecosystem.

New tech and its importance

Uptake of new HR technology solutions will continue to innovate recruitment, onboarding, payroll and employee management workflows. These new tools will help businesses to stay agile and streamline the way they communicate with job candidates and manage their talent.

RefNow is just one example. Recognising the delays, bureaucracy and administrative pressure involved with reference and right to work checks, RefNow developed an innovative platform that minimises time to hire.

RefNow streamlines and simplifies reference and right to work checks with a unified workflow for both candidates and employers. Using a secure and mobile friendly questionnaire, employers can view a candidate’s full reference report within 36 hours on average. Try it now for yourself.

If you would like to learn more about how RefNow's automated Employment Referencing software can help your organisation, reach out to us today and get your first 5 checks free.