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HR leaders reveal their biggest concerns for 2023

With the pandemic behind us and 2022 winding down, it should be smooth sailing for business leaders as we head into 2023, right? Not exactly. Human Resources professionals have expressed some concern over a few issues looming on the horizon. Here is what is keeping the HR team up at night as they formulate their plans for the coming year.

Competition for talent

Several recent surveys of Human Resources leaders have all found that their biggest concern for next year is the potential for labour shortages. As the economy continues to have record-low levels of unemployment, the competition to recruit and retain top talent is fierce.

This can drive salaries up, putting a strain on operating budgets for many organizations. Other than competing on wages, many business leaders are putting renewed effort into promoting their employer brand to attract workers. These initiatives include communicating their company culture and how they are a desirable place to work, highlighting their total benefits packages, and offering perks such as remote and flexible working arrangements and other work/life balance incentives.

Cost of living

The current inflation rate is making life more expensive as the price of food, fuel, and other essentials continues to rise. These cost of living increases are far outpacing the average raise in salaries that most working people can expect to see. This puts the Human Resources department in the unenviable position of managing team morale while staff see their standard of living decreasing due to economic factors.

Some companies have started offering cost-of-living payments or general pay raises to help ease the pressure on staff and to promote employee retention. However, those same inflationary concerns also make it more expensive to run a business, so many companies aren't in the position to be able to simply raise salaries across the board to keep up with the rising cost of living for staff.

To attract new employees, 71 percent of employers told a recent survey that they are considering wage increases instead of benefit enhancements because of the current inflation environment.

Hybrid and remote working

Another major concern for Human Resources departments right now is handling issues related to a decentralized workforce. While flexible work options were introduced to keep workplaces operational during the COVID-19 pandemic and have been used as an incentive to attract staff since, more and more employers are beginning to reinstate in-person requirements going into 2023. Managing these transitions without losing staff who have become accustomed to the remote working lifestyle is an ongoing challenge.

So too is maintaining a cohesive corporate culture with many team members working offsite. HR professionals at firms that plan to continue with hybrid and remote working arrangements say that their plans for 2023 include initiatives to foster interpersonal relationships to prevent organizational culture and well-being from being negatively impacted.

Companies that are bringing their staff back into the office face ongoing concerns over potential new coronavirus variants as we head into the colder months. A recent Gallup poll of HR professionals found that two-thirds say they are expecting to see a COVID surge this winter.

Employee well-being

Staff morale and well-being are among the most important issues HR professionals are responsible for. However, with inflationary costs rising, pressure on salaries, and talk of economic uncertainty on the horizon, many HR departments are seeing their budgets trimmed. This can lead to cuts in programs designed to foster staff well-being which can harm performance, productivity, and retention.

Keeping a loyal and motivated workforce has been particularly challenging over the past few years as trends like the Great Resignation and quiet quitting gained popularity. These saw workers either leaving their jobs in record numbers or simply doing the strict minimum amount of work in order to maintain their position.

For job seekers, the labour market conditions remain favourable. Low levels of unemployment and high job vacancy rates mean there are plenty of opportunities available for people looking for work right now.

In a job seekers' market, the pressure is on Human Resources departments to source the talent they need and to maintain a loyal, motivated, and engaged staff. Those challenges, plus wage pressures, budget cuts, and the lingering impacts of COVID-19 are among the biggest worries HR professionals say will be top of mind for 2023.

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