2023 in Review: 12 Truths about HR, People, and Organizations

2023 has been a turbulent year: the rapid emergence of Generative AI in all areas of business, the continued war in Ukraine, the new war in the Middle East, economic uncertainties around the world, increasing worries about climate change, the collapse of Silicon Valley Bank, and the formal end of the COVID-19 pandemic all shaped this year.

At The Josh Bersin Company , we help thousands of HR leaders and work with the world's largest and most innovative companies on topics of HR, talent, learning, HR technology, leadership, organization design, culture, and people.

Our goal is simple: to make work better and more meaningful.

Looking back, our amazing team brought many different insights, learning courses, community, and discussions to our members and the market. As I did last year , I have handpicked one key insight from each month to offer a snapshot of the knowledge and insights we have provided throughout the year.

Truth 1: Taking Care of People Is More Important Than Ever.

In January 2023, we unveiled our much-anticipated HR Predictions for 2023 . Authored by Josh Bersin , this detailed report guides HR executives to prioritize the most important areas of their HR strategy and take the right actions. From the ongoing labor shortage and changing workforce demographics to industry convergence and economic challenges, HR is at the center of the most important business issues today. A new approach to people, leadership, and HR itself is needed. Our 15 predictions offer a practical guide for navigating 2023 and the years to come.

Truth 2: Culture Is the Key to Organizational Performance and Success.

In February 2023, the Big Reset Playbook: Culture and Performance came out, co-authored by Stella Ioannidou , Nehal Nangia, GPHR? , Janet Mertens , and myself. The playbook introduces a Culture Framework that includes various elements and dimensions of organizational culture, including growth mindset, purpose, communication, and support; provides guidance on how to transform culture to align with business goals; highlights the importance of measuring culture and its impact on business performance; and provides actionable steps to shape the culture in support of business transformation. It's full of examples from the world's most culturally competent companies.

Truth 3: It's Time to Institutionalize Pay Equity as a Core Business Process.

In March 2023, we introduced the Definitive Guide to Pay Equity , a comprehensive study that I spearheaded over the course of a year. This guide offers valuable insights for companies seeking to make progress in this crucial area. Despite 71% of CEOs recognizing pay equity as a vital factor for business success, a mere 4% of companies are effectively addressing it. Pay equity impacts every facet of business, from recruitment and retention to career development and performance management, and from location strategy and hybrid work models to promotion and succession planning.

Pay Equity is thirteen times more important in employee retention and satisfaction than “level of pay.”

How you distribute pay and rewards is critically important - because if people are worried about their pay being fair and equitable, it inhibits teamwork, collaboration, and distracts from doing a good job.

SAP is a role model for pay equity: under the leadership of Chetna Singh , SVP Total Rewards, the company transformed all people practices to create transparency and equity (our members can read the full 6-page case study).

Truth 4: Pacesetter Companies Continuously Transform Organizational Model and Talent Strategies.

In April 2023, our Pacesetter strategies launched, co-lead by Stella Ioannidou and me. We dug deep into what we learned in our Global Workforce Intelligence Project analyzing billions of data points from Eightfold about the top 10% of companies in various industries, and identified what these "Pacesetters" have in common. This resulted in the seven winning strategies they deploy.

Companies like Providence Health, NewYork-Presbyterian, DBS, ING, L'Oreal, Tyson Foods, and many others are executing on this new playbook of continuous transformation, leading the market.

We also introduced two additional industry studies to our Global Workforce Intelligence Project: Consumer Packaged Goods (led by Stella Ioannidou ) and Pharmaceuticals (led be Jordan Schmitting, SHRM-CP ), each with their own individual insights on how pacesetters shape the industry for the future. And we added deeper insights about jobs based on Lightcast data to explain talent flows in Banking and Consumer Packaged Goods.

Truth 5: Corporate Rewards Programs Need a Serious Overhaul.

In May 2023, we brought our Definitive Guide to Pay and Benefits: The Journey to Systemic Rewards to the market, and it's a wake-up call: Companies need to take a hard look at how they invest their compensation dollars. Rather than invest heavily in a plethora of benefits (free food, transportation to the office, and pet insurance), investments in career development, more flexibility, increased recognition, and pay equity pay off much more. This systemic rewards approach changes everything.

This new systemic approach also changes performance management, recruitment, learning, and talent management. Using the Rewards Maturity Model and Framework, rewards leaders can determine an actionable approach to move up the maturity curvey in their rewards practice. Companies like SAP, Microsoft, Unilever, American Airlines, and Capital One are leading the way into a future where rewards are equitable and fair, recognizing the right behaviors.

Truth 6: Companies Can No Longer Rely on Recruiting Alone to Grow.

In June 2023, we released our Time-to-Hire Factbook , benchmarking the time it takes to fill open positions across industries, job roles, and geographies. Based on five year's of global recruiting data from AMS , it's taking longer and longer to recruit: in 2022, it took on average 43 days, and just in Q1 2023, this increased by a full day, to 44 days.

Companies need to look well beyond just filling roles externally and deploy a systemic approach across the entire workforce ecosystem, build from within, and operationalize recruitment with AI and technology to find the skills needed.

Our internal hiring factbook explains that internal hiring can reduce recruitment time by up to 20 days and that it can cost 3-5x more to hire externally than internally, yet the internal hire rate is declining, with just 24% of hires coming from within.

Truth 7: AI Is Transforming Everything In HR.

In July 2023, our research on Understanding AI in HR launched. Led by Josh Bersin , this detailed guide is the result of close to a year of interviews and briefings with the world's most successful HR tech vendors. It explains what AI is, the three different vendor categories, and many use cases for AI in HR.

So how do you get started with AI in HR? Given that only 4% of companies have a defined strategy around leveraging AI in HR, it's time to take a step back and plan what you are trying to accomplish with it.

Rather than chase the technology, fall in love with the problem you are trying to solve with AI.

Truth 8: In the Age of AI, People Analytics Needs to Become Systemic.

In August 2023, we explained the evolution of people analytics . Led by Josh Bersin , this whitepaper explores the history of people analytics, why the fragmented approach to develop analytics in functional groups (e.g., L&D, recruitment, DEI, EX, etc.) no longer works, and outlines a new way to bring all analytics together in a systemic way. According to our Systemic HR study, high-performing HR organizations have 700% more people analytics experts compared to low-performing HR departments. These people analytics teams operate differently too - leveraging consulting skills, key technology insights, and cross-functional teams to add value to the business.

Our People Analytics course in the Josh Bersin Academy is our highest-demand program, showing the need for building data and analytics skills in the HR profession.

Truth 9: We Have Entered a New Era of Business: The Post-Industrial Age.

In September 2023, our research on the post-industrial era was launched. This whitepaper, led by Josh Bersin , goes deep into the business and people context of three converging trends: industry convergence, a secular labor shortage, and the emergence of AI. In this new era, the CHRO is now the most important business partner to the CEO.

Hierarchical organization structures, top-down execution-oriented leadership approaches, and functionally oriented HR operating models no longer work.It's time for businesses to rethink three big areas:

• Rethink the organization: dynamic vs static
• Rethink management: human-centered leadership
• Rethink the HR function: Systemic HR?

Truth 10: Building the Dynamic Organization Is a Business Imperative.

In October 2023, we introduced the Definitive Guide to Building a Dynamic Organization . This research , conducted in partnership with Gloat , examined the practices and capabilities employed by the world's most innovative and successful companies. Astonishingly, only 7% of companies can be classified as dynamic, yet these organizations demonstrate exponentially superior business, people, and innovation outcomes.

Key factors in the journey to becoming a dynamic organization include:

• Cultivating well-rounded leaders by providing them with diverse experiences and ample development opportunities at all levels.
• Encouraging teamwork and collaboration, rather than solely rewarding individual performance and execution.
• Establishing a skills-based meritocracy where the best ideas win, and individuals are supported through deep-skilling, upskilling, and reskilling.
• Developing a network of teams instead of a static hierarchy of managers, where individuals work on projects and quickly align around problems.
• Nurturing a culture of growth and inclusion, promoting equitable growth for everyone, and fostering an environment of psychological safety.

Companies like Novartis , Schneider Electric, HSBC, Seagate, MetLife, Unilever, and Syngenta are leading the way in leveraging a blend of culture and AI-based technology to become truly dynamic organizations.

Truth 11: Underinvestment in Leadership Development Negatively Impacts Organizational Performance.

In November 2023, we released the Definitive Guide to Leadership Development . This research, spearheaded by Janet Mertens and in collaboration with BetterUp , delved deeply into corporate leadership programs, with remarkable findings. Despite the fast-paced changes in the business landscape, companies have been progressively underinvesting in their leadership development programs. This is concerning given that dedicating time to the development of leaders and managers is linked to high organizational growth.

The comprehensive guide provides numerous insights into the what, why, and how of leadership development in the new era.

Truth 12: A New HR Operating Model Has Arrived: Systemic HR?.

In December 2023, our long-awaited Definitive Guide to Human Resources: Systemic HR? launched. After two years of study of the world's largest data set on the profession, Josh Bersin and I, in collaboration with LinkedIn Talent Solutions , concluded that legacy HR service delivery models aimed at high-quality, low-cost support are no longer enough.

It's time for a new approach that focuses not on "making HR better" but on solving the company's biggest, most complex business problems. HR today, unlike the personnel function of the past, is a profession of design, consulting, technology, and data.

Learn more about the key insights from our study, the Systemic HR Framework, what matters most, our four-level Systemic HR Maturity Model, examples from companies like LEGO , TomTom, and Mastercard, how we debunk six myths about the HR profession, and about the ongoing Systemic HR Initiative .

Also in December, we launched our groundbreaking Four-Day Work Week research. Spearheaded by Julia Bersin , this study showed that reducing work hours with full pay actually makes companies more profitable, and provides actionable steps to get it right.

More Support to Develop the HR Profession

To develop the HR profession for the future and supporting organizational transformation through people, in 2023 we...

• Launched Galileo? , the world's first AI-powered expert assistant for HR
• Upgraded the Josh Bersin Academy , the home for HR, with research-based resources, new learning programs, and a thriving community
• Welcomed many of the world's most innovative and forward-thinking HR teams to our corporate membership program
• Advised the largest and most successful HR technology vendors in our new vendor membership program
• Convened 450 HR executives at Irresistible , the global HR conference for HR leaders and their teams, held at the beautiful 美国南加州大学 - 马歇尔商学院 campus
• Discussed topics like AI in HR, the future of work, and reimaging the HR function with hundreds of leaders in our 3 Big Reset sprints
• Shared insights in hundreds of conferences, webinars, educational sessions, workshops, and advisory sessions
• Provided dozens of deep-dive research studies, case studies, and tools for use of our corporate members
• Launched many podcasts , videos, and articles on the most important topics of business and HR today

Finally, a heartfelt expression of gratitude is in order.

• To the entire team at The Josh Bersin Company , thank you for your relentless dedication in working with our clients, providing advice, consultation, and generating research, insights, learning, and experiences that positively transform the world of work.
• To Josh Bersin , thank you for your daily inspiration, guiding us to collaboratively design an irresistible work environment through the art of HR.
• To our clients, collaborators, and partners, thank you for joining us on this journey to change the world. Your partnership and collaboration are invaluable.

Where to Go Next

• Join our corporate membership program to review all these insights, access Galileo, and get advisory support on your most important challenges.
• Become part of the Josh Bersin Academy to develop your skills and experiences with 25 certificate programs and close to 50k members.
• Come to Irresistible , the premier HR conference, to learn and grow with other leaders around the world in May 2024.
• Stay tuned for more research, insights, community, and learning in 2024! We have a lot of important topics coming to support you in this new world of work.