Learning & Development

2023 Outlook: 4 Ways the Workforce Will Change

So much about the world of work has changed in the past 3 years.

If someone told you in 2019 that “work from anywhere” policies would be common, 4-day workweeks would be widely accepted, and “hustle culture” would be on its way out by the end of 2022, you would have probably stared at that person in disbelief.

But that’s the reality we live in today.

We’ve also seen the rise of pay transparency laws; notably high compensation rates; and heightened expectations for diversity, equity, and inclusion (DE&I) over the past 12 months. 2023 is bound to bring even more change, especially as a potential economic downturn and persistent talent shortages prompt employers to rethink their approach to the talent marketplace.

Here are four ways the workforce will likely look different in 2023.

The Contingent Workforce Will Continue to Grow

The nonemployee, or extended, workforce has been growing at a rapid rate, with these workers now comprising up to 50% of the average company’s workforce. Nearly half (46%) of nonemployees say they prefer contingent work over regular employment. Many are shifting to this type of work due to the increased control, flexibility, and work/life balance it offers. Expect to see further demand for this worker class this year, especially as an economic downturn looms.

Work still needs to get done in any economy. As companies look for ways to cut costs, tapping into nonemployee talent pools is cost-effective and gives companies the flexibility to scale their workforces up and down as needed. These highly specialized workers are also a great source of in-demand skills that can fill critical skills gaps and ensure high-priority and C-level projects keep moving in tough times. The competition for these workers is growing as their importance and desirability increase, so employers will need to upgrade the strategies and technology they’re using to manage this nonemployee talent that is critical to the success of the business.

Work Culture Expectations Will Shift

Workers are seeking out healthy work environments that prioritize purpose, promote work/life balance and inclusion, and value collaboration and professional development. Over half of contingent workers indicate they would consider ending an assignment early due to a toxic workplace or bad management.

Expectations will be higher for employers across the board in 2023. Sixty percent of nonemployees say company commitments to DE&I are very or extremely important to their accepting an assignment. Meaningful work is the most important factor for these workers when considering where to take assignments. 

Corporate culture has a direct impact on the attraction, engagement, and retention of workers. The organizations that focus on creating inclusive, healthy, and happy workplaces in 2023 will stand out as employers of choice.

Workers Will Crave Stability

The latest numbers put the chance of a recession in 2023 at 50%. The recessionary clouds could have a considerable impact on employers’ access to talent. Sixty-four percent of contingent workers say company stability is very or extremely important to them when evaluating offers. Forty-five percent said they’d leave an assignment early based on unstable economic conditions.

It will be critical for employers to do what they can in early 2023 to demonstrate company stability and resilience. Be transparent and communicate as appropriate with your workers on company performance to build trust and reassure your people. Employers that offer meaningful work assessments and emphasize the noncompensation elements of work in addition to pay will also be in a better position to attract and retain workers even in a turbulent economy.

Generational Differences Will Matter

An aging workforce is leading to a smaller worker pool and pushing employers to rely on younger talent to move forward C-level priorities. This once again gives workers the upper hand in the job market. If organizations don’t implement specific strategies for hiring and retaining Gen Z and millennial workers, their growth, revenue, and business performance will suffer.

According to Flextrack data, 68% of Gen Z contingent workers crave company stability and meaningful work, whereas 64% of millennials desire a collaborative and supportive work environment. In contrast, 73% of contingent workers over the age of 45 prefer maximum compensation above all other factors. Understanding and catering to the preferences of different worker groups will therefore become table stakes in 2023 and beyond.

Another Year of Change

2023 promises to be another transformative year for the workplace. The employers that move with the times and meet workers where they are will be the ones that attract and keep the talent they need to innovate, drive competitive advantage, and perform.

Jeff Mike, Head of Insights and Impact at Flextrack, works closely with HR, procurement, and IT leaders to design extended workforce ecosystems that fuel and future-proof enterprise talent strategies.

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