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Home Finance How a Global Recession Could Impact Work Culture in 2023

How a Global Recession Could Impact Work Culture in 2023

by Staff GBAF Publications Ltd
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Roza Szafranek - Startup Observer | Startup | OpinionBy Roza Szafranek, founder and CEO of HR Hints

It was a topsy-turvy 2022 for the U.S. workforce. From ongoing pandemic burnout to the Great Resignation to the Quiet Quitting trend, and mass layoffs heading into the new year, companies and HR pros are facing new challenges.

As HR professionals look to the new year, they want clients to be prepared for what may come in 2023. Moving away from a numerical-driven approach and focusing on measuring turnover in teams, taking care of employees, and emphasizing the importance of mental health will all be tactics to help tackle an ever-changing workforce.

HR and culture trends predicted for 2023

  1. Further focus on DE&I. There is still a lot of work ahead of organizations to raise awareness (often in top positions) in the area of inclusivity, reducing inequality, and removing barriers of discrimination.
  2. Measure employee engagement. Last year showed the importance of building teams and taking care of employees. Many companies have solely focused on organizational growth, but instead need to pivot towards giving employees a better work-life balance. Recent studies show remote staff struggle with cultivating a thriving relationship with their direct team. Creating a strategy for remote employee engagement will be beneficial for overall company culture.
  3. Labor market trends. 83% of workers prefer hybrid work. Giving team members flexibility to work remotely has become essential to retaining employees and attracting new talent. Salaries will continue to rise to keep pace with inflation and to ensure top talent does not jump ship to a different company offering better pay. Some companies operating in the most competitive industries may introduce a four-day work week or other benefits such as an emergency savings fund, mortgage assistance, or even being paid in crypto currency.
  4. Transforming into a learning organization. Companies will need to understand the importance of intra-organizational learning. Sending employees to complete non-personal training with the only focus to check it off the to-do list is not benefiting employees. Organizations instead need to shift to cross-team learning, sharing knowledge, and genuinely caring about employees will be important in 2023.

What will hiring look like in a global recession?

According to Goldman Sachs, the threat of a U.S. recession remains alive in 2023. Hiring freezes and concerns over an economic downturn leave employers uneasy looking into the new year. Many industries are experiencing hiring freezes. However, previous experiences and recessions show that a freeze is followed by a rapid increase in hiring. This transitional period is a useful time to reevaluate current hiring practices and prepare the company for new team members to join.

  1. The demand for increased salaries as inflation continues to rise. Salaries will continue to rise to keep pace with inflation and to ensure top talent does not jump ship to a different company offering better pay. Many companies will have to freeze hiring in order to afford higher salaries for employees. A challenge some companies face is having employees dispersed across the country and sometimes across the world, where the cost of living and inflation rates differ. The way industries implemented layoffs in 2022 was the first test for how companies focus on culture, while also having to let go of some employees.
  2. Company culture is a differentiating factor. Last year showed the importance of building teams and taking care of employees. Many companies have solely focused on organizational growth, but instead need to pivot towards giving employees a better work-life balance. Giving team members flexibility to work remotely has become essential to retaining employees and attracting new talent. Many workers seek a healthy company culture with solid values, established interactions, predictable processes, and financial stability.
  3. Focus on performance and productivity. An uncertain economy will shift the mindset of being a top performer. It won’t be about working long hours, but about the results. Creating a strategy for remote workers and helping them maintain workplace relations will be challenging, but a must in order to engage employees across the company and see results. Focusing on people development such as upskilling and reskilling employees will be a valuable retention strategy for employees staying with the company after layoffs. Giving employees space for individual growth is one of the most powerful tools in the hands of companies and leaders.
  4. The side hustle. After many companies downsize, people who have been laid off and suddenly lost an income may start up their own businesses, making it a part of their individual financial strategy. This will require a change on the employer’s side because it often contradicts the contracts employees sign which prohibit these types of business practices.

Each year brings new challenges and unexpected outcomes, but can also lead to new opportunities and growth for many businesses. HR departments are constantly adapting to enhance the workplace for employees. Taking a positive approach to each new situation will positively impact your business and employees.

About Author:

Roza Szafranek is the founder and CEO of HR Hints, the first HR boutique operating in a subscription model that cooperates with startups and scale-ups.

Learn more at http://hrhints.io/

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