The 4 Most Important HR Trends in 2023

As the workforce evolves, HR roles continue to be some of the most important in business. It’s also an environment that can change quickly, so keeping up with trending HR topics is practically part of the job description.

We’ve seen the start of some of these trends over the last few years, but as we continue to march into 2023, they’re looking more and more concrete. Employee expectations are changing, and HR teams will need to adapt to compete in the market.

At BambooHR, we empower more than 30,000 companies with the tools they need to thrive. Our all-in-one HR software helps you discover people analytics insights, level up performance management, run payroll, and more. Read on as we cast a spotlight on some of our key HR trends for 2023—and what you can expect to come next.

The 4 Most Important HR Trends in 2023

1. Navigating Hybrid and Flexible Working

Hybrid working is one of the most significant HR trends in the post-Covid era. The modern workforce has taken the remote and hybrid work approach for the best part of three years now, and it looks like it’s here to stay. Now more than ever, employers need to recognize the value of offering flexibility to their employees, whether that’s in the shape of flexi hours, part-time schedules or hybrid working.

By the end of this year, an estimated 39% of global knowledge workers will embrace hybrid working, according to Gartner—increasing by 2% from 2022. In the U.S. alone, it’s predicted that hybrid and remote working will account for a staggering 71% of the workforce.

These days, hybrid working is seen as less of a company benefit, and more of an employee expectation. So if you’re looking to push back against remote working and encourage a more traditional return to the office, you may find this reflects negatively in employee engagement and retention.

One of the best ways to combat this is by introducing more flexible and empathetic policies that consider employees’ demands outside of work and suit their preferences. These should be implemented alongside a successful performance management strategy to create a working environment where everyone can thrive.

Employees are looking for modern policies that adapt to the dynamic change in working styles following the pandemic. When companies offer their trust and flexibility, it can help positively impact employee engagement, retention and acquisition.

2. Elevating the Employee Experience

Another clear HR trend for 2023 relates to culture and employee experience. When you consider how difficult it can be in the modern market to find, hire, and keep high-performing employees, it’s not surprising to see culture and employee experience as the top concern for HR pros.

Unlike assessing employee performance or hiring goals, where objectives are relatively clear, measuring culture and employee experience is much more subjective, which makes measuring it much more difficult.

In many ways, how a company meets employee expectations is as important as an employee meeting their targets. For instance, important employee experiences might include how a company responds to:

• Their first day and onboarding process
• Performance reviews
• Personal life events, such as a bereavement or family emergency.

Wellbeing is becoming another key element to the broader employee experience. One of the most impactful changes a company can make towards cultivating a positive work culture in 2023 is showing they’re empathetic to mental health and work-related stress. It can even make employees more productive.

Over the last year, as many as 40% of employees said that work had the second-most negative impact on their mental health after finances, according to JobSage. Encouraging mandatory paid time off can help promote a healthy work-life balance, while circulating regular culture surveys can help employers gauge employee engagement and give everyone a voice.

3. Adding a Personal Touch to Employee Recognition

Putting the 'human’ in human resources trends, another major trend is communication and recognition. In 2023, employees are looking for more feedback from leadership and better company transparency.

We studied what matters to employees when it comes to rewards and recognition, and how both affect employee engagement. We learned that most employees prefer verbal recognition from their supervisor, followed by recognition via email or text. The least preferred method of recognition was external via social channels, or an industry award.

This human connection can help improve employee engagement, with 82% of professionals at companies with recognition programs stating they’re satisfied or very satisfied. Employees want to be seen as people with value.

So, it may seem obvious, but the more recognition people receive, the happier they are. So make sure to tell your employees when they’re doing a great job, as it can help drive better engagement and results. In fact, employees value authenticity as the number one quality a manager can have in encouraging them to succeed, according to a 2022 survey by Microsoft.

However, money is still a persuasive reward, with 80% of employees stating they would prefer to get a pay rise rather than a promotion to a higher title without one. In the wake of the Great Resignation, negative attitudes about pay equity and compensation can result in a 13% decrease in employee engagement, and a 13% increase in job searching activity, according to Gartner.

If you’re not sure what benefits your employees want, finding out is simple with a culture survey. Get authentic feedback where it matters and help employees achieve their potential with our tools at BambooHR.

4. Revitalizing Benefits and Perks

Employers may need to rethink their benefit strategy to stay competitive and keep up with current trends in HR. The increase in hybrid and remote working is one reason for the extra pressure. Employees appreciate employers that offer enticing offline perks as well as office perks.

What it takes to secure and retain talent has changed. After surveying more than 1,000 HR employees in the U.S., we found that the most popular company benefits added in the last year include:

• Employee rewards
• Employee performance bonuses
• Flexible work arrangements.

Introducing more creative benefits can go a long way toward curating a positive work culture in 2023. We found that flextime and mental health days are two of the most common company benefits designed to support employee wellbeing.

Investing in benefits and perks is one way to tackle retention and engagement. Out of the professionals we surveyed, most said that their company prioritizes employee work-life balance to encourage retention, followed by personal development opportunities.

Skills-based training is another recurring HR trend that broadens expectations for company benefits. Giving people the room and support to grow directly links to retention. If employees could benefit from more learning and development support, 76% of employees agree they would stay in their jobs longer, according to Microsoft.

Future HR Trends: 2024 and Beyond

The future of HR trends in the U.S. is mostly employee-centric, adopting a human-first approach to company culture, benefits and compensation and employee wellbeing. Companies will require more elasticity to cater to varied needs and modern expectations. So, if you’re looking to encourage people back into the office, the majority of employees will need a better reason than simply company expectations, according to Microsoft.

One of the most important trends human resources will need to consider is accommodating for burnout. Of those surveyed, 48% of employees and 54% of managers claim to suffer from burnout already. Tackling this issue will be one of the key challenges going forward into 2023 if companies wish to embrace success in the future.