2023: Hope for the best but be ready for more upheaval

When we think back to spring of 2021 - which almost feels like a lifetime ago - we saw an unprecedented amount of movement in the global labour market as the world started opening up again. At LinkedIn, we called this the Great Reshuffle, where people were rethinking not only how and where they work, but why, and switching jobs at extraordinary rates. Since the summer of 2022 this started to slow down and we began to see greater degrees of uncertainty. Much of this was driven by the illegal war in Ukraine which, in addition to having a devastating impact on people’s lives, also exacerbated the economic pain.

As we look ahead to the new year, we’re all hopeful that 2023 will bring calmer and more peaceful times - from a coronation in the UK, to the Special Olympics in Germany, and the Women’s Football World Cup in Australia and New Zealand - there are things on the horizon to look forward to.?

While I’m always an optimist, I also have a healthy dose of realism. I firmly believe that the only way to lead through uncertainty is to plan for it. So what do companies do in a situation that’s by definition hard to predict, and in many cases there isn’t a playbook to follow? At LinkedIn, we’ve looked at what we can learn from our data and research, and reflected on the conversations we’ve had with business leaders about what they’re seeing in their organisations. Based on this, I believe there are three central themes that will help businesses successfully navigate uncertainty in 2023.?

People are every organisation’s greatest asset, and forward-thinking businesses that focus on their employees will be the ones that outperform competitors and come out stronger.?

Employees have dealt with a lot over the past two years. Currently, inflation and the cost of living crisis are putting many people under real pressure in their personal lives. That stress in their personal life doesn’t disappear when they come to work. Each company will have to determine what they can do to help their employees navigate this period of anxiety, but investing time and mindshare on how you can maintain their energy and engagement is key.?

Workers highly value flexible work arrangements. However, LinkedIn data is showing a mismatch between what employees want with regards to flexibility, and what employers are prepared to offer. In many countries remote work has been in decline for six months or more, yet it remains extremely popular with job seekers - pointing to a growing disconnect about how teams work together and what employees want from their employers. Offering flexibility is often in a leader's control and doesn’t always create additional cost pressures.

One of my hopes for 2023 is that companies will recognize that flexible work is pivotal to a high functioning, highly productive business. For employers that are hesitant, my concern is that the aha moment will be when they see attrition from their highest performing, highest potential employees – the ones they need most in moments of uncertainty.?

Even though we’re seeing signs of hiring slowing down, our data finds that labour markets across EMEA & LATAM are still relatively tight. The ratio of job openings to active applicants remains high compared to the levels we saw before the pandemic. Your best employees still have the choice of where they work, meaning you must keep them engaged, motivated and give them purpose.

So how do you do that? After compensation, balance and flexibility, upskilling is a top priority for employees, according to our latest Global Talent Trends report. With the skill sets for jobs having changed by around 25% since 2015, and this number expected to double again by 2027, it has never been more important to offer opportunities to learn new, in-demand skills.?

We also know from our data that internal mobility is an essential strategy for talent retention. Thinking about how you can offer people career pathways within your business can be a compelling way to keep them engaged. Companies that excel at internal mobility are able to retain employees for nearly twice as long as companies that struggle with it, with the average retention span being 5.4 years instead of 2.9 years.

The macro environment is impacting every organisation. One hurdle that business leaders will face in 2023 is finding the right balance between internal and external challenges. It’s easy to become all consumed by what’s happening within your own business. You can’t let this distract you from what’s happening with your customers.?

Customers will continue to expect responsiveness, empathy and agility based on their evolving needs. They will expect action, not just talk, on issues that consumers increasingly care about when making purchasing decisions, such as sustainability, diversity, and supply chain transparency. Being able to demonstrate action and deliver value is central to establishing strong customer relationships and earning trust, and becomes even more important in a challenging economic environment.??

B2B buying cycles are becoming ever more complex. Building relationships across your client base, often in functions that you may not have previously engaged, will help you gain a deeper understanding of their immediate needs but also identify where you have opportunities to deliver more value in the future. This is critical when client budgets may be facing increased scrutiny, leading to tough choices about where and when they invest. Many companies will need to find operational efficiencies but research shows those who?still find ways to invest in R&D and marketing during a downturn will build a competitive advantage and emerge stronger as a result. Work done by LinkedIn’s B2B Institute, our think tank researching new approaches to B2B growth, also finds that when advertisers pause advertising for a year or more, sales for brands of all sizes – whether small, medium or large – drop by nearly 50%.?

In the Autumn, we asked over 2,900 C-level executives across the globe how they are adapting to cope with the uncertainty facing their businesses. They pointed to communication (31%), problem-solving (28%) and transparency (25%) as the key skills they needed to steer their organisations through choppy waters. For business leaders based in EMEA & LATAM, communication ranked as the top skill needed (32%), followed by empathy (28%) and transparency (26%).?

Communication is critical to engaging your employees. Leaders must be transparent with employees about the current reality and adapt to what lies ahead, whilst providing their teams with absolute clarity on where they need to focus.? Consistent, transparent and regular communication is core to this. Embrace the mantra of fewer things done better and don’t underestimate the calm that can follow when you reassure employees that tough times don’t last forever. As with every economic cycle, good times will return.

It is also at the heart of staying close to your customers. There are few things more important than hearing from your customers first-hand, understanding where their challenges and opportunities lie and ensuring your business can help them respond to their changing needs.

We hope these ideas will spark some thinking as you prepare for the year ahead. I’d love to hear your thoughts - what do you think leaders need to prepare for in 2023?

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