Employers across the country continue to navigate changes brought on by the pandemic, including how it impacted how people view work and what they want out of a job. As we enter the new year, here are seven areas human resources leaders are focusing on to create strong, thriving workforces at their companies.

1. Retention

Turnover has always been a top HR concern, but it’s become even more prominent in the past couple of years. In 2022, PwC reported one in five workers around the globe planned to quit their jobs.

HR leaders are focused on mitigating the impacts of turnover costs, both financially and in terms of how turnover affects company culture and sentiment. To decrease recruiting and hiring costs, HR leaders must devise ways to keep top talent at their companies, by finding out what employees want out of work and delivering it.

2. Engagement

In 2022, employee engagement in the U.S. continued to decline, leading to trends like the “great resignation” that persisted throughout the past year.  Gallup reported employee engagement, a measurement of how loyal to and enthusiastic about a company an employee is, continued to decline from previous years. In 2020, 36% of employees were engaged at work. In 2021, the number declined to 34%. In 2022, it fell to 32%.

In 2022, employee engagement in the U.S. continued to decline, leading to trends like the “great resignation” that persisted throughout the past year.  Gallup reported employee engagement, a measurement of how loyal to and enthusiastic about a company an employee is, continued to decline from previous years. In 2020, 36% of employees were engaged at work. In 2021, the number declined to 34%. In 2022, it fell to 32%.

3. Mental Health

Since the pandemic, mental health initiatives in the workplace have become more prominent. According to an October 2022 report by McKinsey & Company, employees who face mental health or well-being challenges report more negative experiences at work. Workers with mental health challenges are 4x more likely to say they intend to leave their job. They’re also 2x more likely to report low engagement at work.

Expect HR leaders in 2023 to prioritize how to support employees’ mental health. Some tactics include expanding health insurance coverage to include mental health support like counseling, providing employees with unlimited time off so they can take mental health days, and offering employees mental health education and resources.

4. Career Development

To improve retention and employee engagement, more HR leaders will focus on offering career development to employees. Research from UC Berkeley shows career development strengthens a workforce’s skillset, improves employee career satisfaction, can boost employees’ self-confidence, and provides a cost-effective way to increase employee talent, motivation, productivity, and retention.

Career development initiatives can also be used as a recruiting tool. From hiring on, managers can work with employees to identify their strengths and career goals, then develop plans that help workers attain the skills and experience they need to advance their careers at that company.

5. Change Management

A Gartner survey of more than 800 HR leaders across 60 countries found one of the top prioritizations in 2023 is organizational design and change management. More than half (53%) of HR leaders are prioritizing this in 2023, with 45% of HR leaders saying employees are fatigued from change resulting from disruptions including digital transformations and economic uncertainty.

HR leaders are working on strategies to make change easier for their workforce. Gartner reports using an open-source change strategy, which involves employees in co-creating change decisions and owning implementation planning, results in a 14x higher rate of change success. Open-source change strategies also decrease change fatigue by 29% and increase employee intent to stay by 19%.

6. Company Culture

A 2022 Gallup survey of more than 140,000 U.S. employees points a clear sign to where knowledge worker industries are heading: to remote workforces, either hybrid or fully online. Exclusively remote work increased from 8% of workers in 2019 to 39% of workers in February 2022. Hybrid workforces increased from 32% in 2019 to 42% in 2022. More than 90% of workers prefer either a hybrid (59%) or fully remote (32%) work environment.

Distributed workforces have caused HR leaders to consider how to support a strong company culture when workers aren’t in a physical office location together. This has led to the adoption of technology that fosters strong collaboration, the emergence of virtual team gatherings and social events, and the creation of on-site meetings and summits to bring workers together physically. In 2023 and beyond, expect HR leaders to continue to strategize how to facilitate team-building in hybrid, remote, and asynchronous work environments.

7. Diversity, Equity & Inclusion

In 2022, the Society for Human Resource Management (SHRM) presented a roundup of the biggest HR trends. A focus on diversity, equity, and inclusion (DE&I) initiatives landed among HR leader prioritizations. Going beyond hiring a diverse workforce, more companies are positioning themselves as making DE&I a core value, which can attract more diverse candidates and widen the talent pool.

According to a 2022 report by “Human Resource Executive,” nearly one-third of employees think their employer lacks a sufficient commitment to DE&I. There’s a correlation between those concerns and an employee’s willingness to quit. Younger workers are particularly interested in DE&I efforts, with 60% of millennials expecting employers to demonstrate commitment to DE&I. From recruiting through to daily operations, HR leaders will look for ways to show their DE&I commitment and support DE&I at their companies.

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