Whilst little could rival the upheaval caused by the pandemic, inflationary pressures and the spectre of recession means many companies will be cautious entering the new year. For employees and employers alike, that will create fresh challenges to manage and overcome.
On the back of mounting economic pressures, a new term has already been coined, the ‘Great Unretirement’. Data from the UK’s Office for National Statistics suggests tens of thousands who retired during the pandemic have returned to work this year, likely driven by the cost-of-living crisis. However, there are a number of other trends set to impact workplace life in 2023, at beqom we’ve compiled our top five:
1) Strategies will recentre on performance and productivity
With more uncertainty on the horizon in 2023, there will be a sharper focus on improving employee performance and productivity to boost output and bottom lines. Over the past few years, the focus has – understandably – been on prioritising connection, relationships and wellbeing. Whilst this will continue to be a priority for businesses, many will admit that performance management took a back seat over the course of the pandemic. Continued economic uncertainty will likely see performance rise back up the agenda. For those organisations restructuring to overcome the challenges they face as a business, they are going to need a clear understanding of who their high performers are. In practice, this necessitates ensuring people are evaluated fairly, based on accurate data that is directly linked to contribution.
2) Proximity bias will impact remote workers
Whilst hybrid working practices are now part of the ‘new normal’ and offer workers greater flexibility, these have given rise to an unintended consequence –proximity bias. According to a report by the Society for Human Resource Management (SHRM), two-thirds (67%) of supervisors overseeing remote workers admitted to believing remote workers are more replaceable than onsite workers. Forty-two percent said they sometimes forget about remote workers when assigning tasks. This may explain why remote workers get promoted less often than their peers, despite being 15% more productive on average, according to the same survey.
This can also deepen existing workplace inequalities. Remote workers are often more likely to be women, who shoulder childcare duties and as a result, are subjected to gender bias being reinforced in new ways. Proactive management of this emerging trend will be key to ensuring it doesn’t impede diversity and inclusion. Careful performance management can help to overcome this. Setting clear and measurable goals are the first step, whilst scheduling frequent check-ins can maintain an open dialogue with workers and avoid biases developing.
3) Data and employee metrics will enrich decision making
Understanding employee performance based on objective evidence and data will only grow in importance as businesses face the tough realities linked to restructuring and reshaping their organisations amid economic turbulence. Subjective and generic manager-led evaluations can be a force multiplier for bias. Instead, evidence-led feedback should be prioritised to ensure the performance management experience becomes a fair reflection of an individual’s contribution.
4) Rewards need to be reinvented to retain talent
Top talent is still in high demand, and retention issues will likely continue to be a dominant feature of 2023. Combined with the rising inflation rates felt across the world, it’s fair to say that the traditional approach to compensation will no longer work. In the last two years, we have witnessed the Great Resignation, hybrid working, Gen Z joining the workforce, inflation, and other drivers that have changed the expectations of workers. In short, employees now expect more from their work, and how it fits into their broader work-life balance. Compensation and rewards offer an opportunity for employers to set themselves apart. Creative thinking about how rewards can enhance working life and ensure workers’ needs and wants are met will help to soften the impact of inflation on workers and motivate individuals. Inevitably, that will lead to better delivery on business performance and greater talent retention.
5) Quiet quitting will continue to make noiseDespite economic uncertainty, the trend of quiet quitting is here to stay in 2023. In fact, it may become even more prevalent with employees taking on more work in the wake of a tough economic climate. Checking in frequently with individuals and ensuring workers are ‘bought in’ to your organisation’s mission will be important. Giving purpose through meaningful goals and conversations and recognising people when they do deliver will all be key ingredients for an effective performance management strategy. If more companies focused on ‘re-hiring’ employees with regular check-ins, there might be fewer exit interviews.
