After the past few years focusing on surviving the pandemic shift to remote work and navigating the fallout of the #MeToo and #BlackLivesMatter movements, followed by juggling crises in employee morale, “the Great Resignation,” and the “Quiet Quitting” phenomena, it’s unnerving to think about the next great crisis corporate leaders will need to navigate in 2023: surviving and thriving through an economic downturn many currently in the workplace have never experienced in their lifetime.
Against the looming recession and other shifts already in progress, there are five specific trends that will impact your workplace in 2023 that you should start to prepare for now:
More Layoffs
Most people agree we’re facing tough economic times ahead, and layoffs will be a part of the business landscape through next year. More than ever before, today’s layoffs need to be conducted in a well-thought-out, systematic manner, with sensitivity and respect for the impacted employees. Ensure you give yourself enough time to review the layoff list for disparate impact on underrepresented employees and verify that layoff criteria are consistently applied. Think through your communication plans—to people on the layoff list and to the people who remain. Lastly, try to make the layoff decision quickly so the business can provide severance and support to those who have been laid off. Remember, these people are transitioning out of daily operations, but if the layoff is executed respectfully, these people should remain a part of the company’s community. (Note: More actionable advice on conducting respectful layoffs can be found here.)
A Call for HR Accountability and Financial Literacy
In 2023, there will be a much greater push by boards of directors for HR; diversity, equity, and inclusion (DEI); and other functions to be run like a business. I’ve run into many from these functions who have no idea what key performance indicators are or how to measure them. That will have to change. No one has the luxury of ignoring the number of dollars they spend or of not measuring how those dollars helped improve or protect the company’s bottom line. Executives should understand a profit and loss statement and an operating and expense plan now more than ever, as well as the cost of the head count needed to achieve desired business outcomes. Lastly, all programs, including compliance, culture, and other learning and development programs, should have a measurable impact on business operations and an associated return on investment (ROI). In short, proving the efficacy of your programs with meaningful business metrics will be a requirement, not just aspirational.
Demand for Efficiencies to Do More with Less for Maximum Business ROI
HR, talent, and DEI are not revenue-generators and are more vulnerable than other functions to budget cuts. To weather the bumpy ride ahead, leaders of these functions should look for technology to streamline manual work and automate processes. These departments may have to generate the same functional output with a smaller head count, and if so, technology can enable that. Leaders should deploy actionable people analytics that provide visibility and measurements relevant to behaviors that lead to attrition, conflict, inclusion, empathy, trust, and other culture outcomes.
Increased Government and Regulatory Guardrails
California and New York just enacted a new pay transparency law requiring employers to post salary ranges on job postings. The U.S. Securities and Exchange Commission (SEC) is considering measures that would require companies to disclose their own climate-related risks and greenhouse gas emissions as part of a push for more aggressive environmental, social, and governance (ESG) oversight. The SEC already requires “human capital” disclosures in public companies’ annual disclosures. And 2022 was the first time companies listed on the NASDAQ were required to disclose the demographic makeup of their boards of directors. This trend will continue as public pressure mounts for businesses to prove their commitment to diversity, inclusion, and even environmental stewardship.
A Return to Back-to-Basics Management Training to Support Employees and Improve Culture
Because so many people are working remotely, there is little on-the-job training for new hires and managers. They can no longer easily observe and emulate the positive behavior of the person they are sitting and working next to on a day-to-day basis. That means you’re likely to see a more concerted effort among companies to find ways to get teams together in person—maybe not all the time but some of the time. That’s the best way to develop the prosocial behaviors that will support employees, improve culture, and reduce risk. Simply put, you can’t be prosocial unless you are social.
If the last 3 years taught us anything, it’s that there is no such thing as a normal year. People leaders have had to become even more nimble and have learned to adapt to an ever-changing world, business climate, and workplace culture. It’s impossible to predict the next crisis business leaders will have to face. But by preparing for some of the trends mentioned above, you’ll have a better shot at navigating the Next Big Thing, whatever that may be.
Emtrain Founder and CEO Janine Yancey is a pioneer and visionary in healthy workplace culture, including online education in harassment, ethics, and diversity and inclusion. A former partner with an employment law firm whose clients included Google and Intuit, Yancey founded Emtrain in 2006. The bootstrapped start-up began by delivering engaging online sexual harassment and workplace compliance training and recently evolved into an artificial intelligence platform that provides powerful data and analytics to identify toxic workplace issues in real time. Emtrain, which earned an “Honorable Mention” spot on Fast Company’s World Changing Ideas 2020 list, has worked with more than 800 companies, including some of the biggest names in tech and corporate America, from Netflix, Dolby, and LiveNation to Chevron. Before founding Emtrain, Yancey was a partner at Employment Law Partners, where she specialized in solving labor and employment problems for high-tech firms. She also served as board member of the Northern California Human Resources Association and is author of The HR Handbook, designed to help young tech companies navigate workplace laws.