With a new year comes a renewed focus for HR teams.
Over the past 12 months, workplaces have had to adapt to post-pandemic remote working while managing the Great Resignation - where higher-than-usual numbers of employees left employment - and a cost of living crisis.
But what does 2023 have in store? Below, we’ve outlined the biggest challenges for HR this year - and how to combat them.
Creating a solid staff retention strategy
In many industries job hopping will continue throughout 2023 following the Great Resignation.
Claro Wellbeing’s Workplace Today report revealed that almost one in five (19%) employees plan to quit their job in the next 12 months if the cost of living crisis continues or gets worse.
What to do: consider what else you can offer staff to keep them. And if you don’t know, ask. A pay-rise may not be possible for all companies, and there will always be another firm offering more, so think about other options.
For example, can you offer career development opportunities, additional leave or boost your benefits package?
Claro Wellbeing research shows the more company benefits on offer, the greater the job satisfaction. Some 78% said a financial wellbeing programme could keep them in their job longer.
Recruiting in a talent shortage
Employers across the UK are reporting significant challenges in filling jobs due to a number of factors including a lack of skilled talent, Brexit, an ageing workforce and rising business costs.
The British Chamber of Commerce says recruitment struggles are at record high levels.
What to do: can you be more flexible on experience and qualifications and invest in training to upskill new recruits?
Can you make your company stand out against rivals by improving and communicating the brand, culture and benefits package?
Research shows a damaged brand will reduce the number of applicants significantly - and we can see this in practice with Meta (then Facebook) following the Cambridge Analytica scandal.
Coping with the cost of living crisis
Not a new challenge, but the cost of living crisis is likely to factor into HR strategies this year, if it hasn't already.
We know many people have found themselves struggling financially as a result of rising prices which has affected our resilience - Claro Wellbeing research shows that over a third of working adults (37%) say they struggle, fall behind or cannot keep up with bills.
The resulting financial stress not only affects productivity - with 67% saying it affects their work performance - but also has a negative impact on our mental and physical health.
What to do: consider how you can support your employees’ financial wellbeing.
A good financial wellbeing programme should be inclusive and recognise the different challenges and needs of your workforce.
Former president of the CIPD and world-renowned employee wellbeing expert Professor Sir Cary Cooper says the ideal strategy should include one-to-one guidance, such as financial coaching, so employees can build a relationship with an expert and receive bespoke information to help them reach their goals.
For more of his thoughts on financial wellbeing, see our video interview.
Reducing staff burnout
Employee wellbeing is going to be more of a focus this year for HR. Post-pandemic and during a cost of living crisis, our wellbeing has taken a number of hits.
Claro’s research suggests people are struggling at work, with 22% saying they’d experienced ‘burnout’ - a state of physical and emotional exhaustion caused by work stress - in the last six months.
What to do: ensure your benefits programme covers the three pillars of employee wellbeing: physical, mental and financial.
Can you improve the work/life balance of your employees? This could include being flexible with working hours and making sure you work with your teams to set realistic targets.
Managing the fall-out of a recession
With experts predicting a worsening recession in 2023, companies and individuals will feel even more squeezed.
Organisations may be faced with tough choices - to increase profits, improve efficiency or reduce the workforce.
Investment bank Goldman Sachs has already warned of job cuts to improve its profits amidst global uncertainty, and Amazon announced it will let 18,000 people go this year.
What to do: preparation is key. How can you ensure you are ready for change - what can you do now to mitigate a worst case scenario?
Think of ways you can smartly cut costs without damaging your workforce or business and do not make cuts to benefits that build engagement, such as popular employee programmes or flexible working opportunities.
There are typically more jobs to be done in a business than there are people to do them, so your staff are key.
Finally, make sure you communicate about changes and challenges in an open and honest way to prevent rumours circulating.