2023: What lies ahead for business?

Personnel Matters

For many businesses, 2022 was a tough year with the significantly increased inflation, producing concerns about a recession. Labor shortages abounded. And supply chain problems were evidenced in many areas. We are now a couple of months into 2023. What can we expect this year?

Here is a quick summary of five trends that a variety of HR professionals and thought leaders believe are in store for the workplace. 

Staffing uncertainty. The state of the economy remains uncertain. Inflation has slowed somewhat, but there is still concern among many that we are in the initial stages of a recession that could last one to two years. And while COVID-19 restrictions have been pared back, the impact of new strains remains unknown. 

These conditions will continue to cause uncertainty within organizations regarding appropriate staffing levels. While some organizations and industries still need workers (e.g., hospitality), other industries (e.g., high tech) are already laying off employees because of decreased demand for their products due to supply disruptions and economic conditions both in the U.S. and abroad. In this environment, employee anxiety can also rise, so it is important to be transparent and keep employees informed of the organization’s outlook.

Job seekers in control. Despite economic uncertainty, job seekers and highly qualified employees will still have power. Job candidates will seek out and prioritize companies that provide opportunities to develop their skills. Many of these job candidates will be current high-performing employees seeking better opportunities elsewhere. Companies interested in retaining their best employees will have to invest more in professional development, reskilling and upskilling of their employees and ensure that their pay is truly market competitive or even higher. This includes employer-sponsored education programs that are more flexible to encourage higher usage and assistance in paying off college debt.

Employee well-being. Because of staffing shortages, inflation and a myriad of other life issues facing employees, many organizations will encounter problems with employee well-being. Those employed in understaffed organizations are experiencing low morale and burnout; many employees are caring for aging parents or facing child care issues, and inflation is taking a toll financially on many families. As a result, employees are seeking remedies that include better work-life balance and financial and emotional support. To address these concerns, employers will have to look for creative ways to ease the everyday life stresses facing their employees. Remedies may include moving to a 4-day work week, increased use of flex-time, expanding personal time-off policies, financial counseling, creating work-from-home arrangements and ensuring mental health and substance abuse services are covered in their health plans.

Diversity, equity and inclusion. DE&I will continue to gain significant attention. As evidenced by current immigration trends, we are continuing to become much more diverse as a nation, but we have yet to manage diversity in a way that brings wholeness and unity. The same situation is being experienced in organizations. Affirmative action has led to a more diverse workforce in terms of numbers, but bringing that diversity together to improve organizational performance has been more difficult. Greater focus must be placed on building a culture of inclusiveness. Generation Z is predicted to become 30 percent of the workforce by 2030, and nearly 50 percent of Generation Z identify as racial or ethnic minorities, making it the most diverse generation. Experts foresee the merging of HR and DE&I as partners in developing an inclusive mindset. 

Micro-unionization. Based on the level of activity reported to date and this administration’s support for unions, micro-unionization may become more prevalent. Micro-units are small, sharply defined groups of workers who share a commonality of interests. Examples include certified nursing assistants at a hospital, workers at a specific location and employees within the same department of a hotel, department store or grocery chain. Micro-unionization increases the threat of union activity in all types of businesses. To avoid these inroads, businesses should focus on making micro-unions unnecessary by ensuring fair and unbiased treatment of employees, treating employees with respect and dignity, ensuring wages and benefits are competitive and identifying and resolving employee issues (e.g., excessive workloads due to staffing shortages) before they can grow. Leadership training for supervisors and managers is a key factor.

This year could be a great year for business, but it could also be filled with numerous challenges. Gaining insight into the issues that might arise and preparing for them in advance will help assure a more favorable outcome. 

About Dr. W. J. Heisler 14 Articles
Dr. W. J. Heisler is professor of human resource management and director of the MSHRM program at Troy University. He operates out of TROY’s site based in Chesapeake, Va. He holds Ph.D. and M.B.A. degrees from Syracuse University and worked for more than 20 years in management and executive positions in human resources at Newport News Shipbuilding. Contact: wheisler@troy.edu.