The Top 10 Workplace Trends for 2023

The following is an excerpt from my FREE Workplace Intelligence Insider Newsletter. You can?access the full article in the?Newsletter Archives. And don't forget to?subscribe?so you receive the new edition every Monday morning.?

For the past decade, I’ve published my forecast of the top 10?workplace trends that will impact how we work and live for the upcoming year. The purpose is to help businesses prepare for the future and equip workplace professionals with the insights they need to drive their organizations forward. You can read my predictions from the past 10 years — 2013,?2014,?2015,?2016,?2017,?2018,?2019,?2020, 2021, and 2022 — which have been read by over one million people worldwide.

These trends are based on?dozens of conversations with CEOs, HR leaders, and other workplace professionals. They’re also informed by surveys of over 15,000 employees, 6,000 C-suite executives, and 5,000 HR leaders that my firm, Workplace Intelligence, conducted this year in partnership with companies across the globe. Lastly, I look to secondary research synthesized from hundreds of?different sources, including consulting firms, think tanks, non-profits, universities, the government, and trade associations.

So what will the world of work look like in 2023? Although concerns about COVID-19 have lessened, leaders will face new challenges as they navigate labor shortages, ongoing inflation, and slow economic growth. For 2023, Goldman Sachs has cut its forecast for annual U.S. GDP growth to 1.1% from a prior estimate of 1.5%. This comes after the group recently increased its predictions for Federal Reserve interest rate hikes. “This higher rate path combined with recent tightening in financial conditions implies a somewhat worse outlook for growth and employment next year,” the economists said.

Things aren’t much better globally, with Russia’s invasion of Ukraine and the lingering effects of the pandemic playing a role in the bleak outlook. The IMF forecasts that global growth will slow to 2.7% in 2023, the weakest it’s been since 2001 except for the global financial crisis and the acute phase of the pandemic. And although global inflation is forecast to decline from 8.8% in 2022 to 6.5% in 2023, in many economies this number is still higher than it’s been in decades.?“The worst is yet to come, and for many people, 2023 will feel like a recession,” the IMF’s report reads.

The increasing likelihood of a recession means that despite strong hiring and historically low unemployment rates over the past few months, the labor market is likely to deteriorate next year. In fact, Federal Reserve officials expect the unemployment rate to jump to 4.4% in 2023, up from 3.7% in October 2022. Besides an increase in the unemployment rate, about 900,000 jobs could be lost in the first half of 2023, according to The Conference Board’s labor market projections. The Board also predicts that overall labor force participation will decline.?

But things won’t be all doom and gloom next year in the world of work. For most companies, there will be a strong imperative to hold on to their top talent in order to weather the storm that lies ahead. That means they’ll continue making improvements to their work experience, benefits package, and other elements of the employee value proposition, all of which will have a real impact on people’s well-being and quality of life. Workers themselves will also be highly motivated to take charge of their health, their finances, and their career trajectory in 2023.

Below are 5 of my 10 workplace trends for 2023 — subscribe to my FREE Workplace Intelligence Insider Newsletter to get the full forecast.

Trend #1: Inflation and an impending recession will force workers and businesses to take action

In 2023, both workers and companies will be deeply affected by inflation and the rising costs of living and doing business. In fact, 90% of executives are concerned about the current macroeconomic conditions, and many are already taking action to drive growth, cut costs, and mitigate risks. This includes building protective measures into supply chains to deal with shortages and rising logistical costs. Some companies may even encourage more of their staff to work remotely, which can save up to $10,600 per employee annually.

Businesses are also slashing their workforce as a way to cuts costs, despite the ongoing labor shortage. PwC finds that more than 8 of 10 CHROs said they’re cutting jobs, freezing hiring, or employing other tactics?to reduce staff. At the same time, pay budgets are expected to rise 4.1% — a 20-year high — to keep up with inflation, and so companies can ensure that their most talented team members don’t jump ship for a better opportunity elsewhere.

But the reality is that this won’t keep up with inflation, and that’s why among workers, boosting their income will be a top priority. One study found that 57% of employees want more overtime or extra shifts at their current job, 37% are looking for a job with a higher salary, and 38% have looked for a second job. Meanwhile, nearly 1 out of 3 workers have cut their expenses (or plan to do so) by moving to an area with a lower cost of living.

Trend #2: Career mobility and upskilling will be top priorities for employees

LinkedIn’s 2022 Global Talent Trends report reveals that upskilling and opportunities to grow at their current company are two of the top priorities for today’s workers, coming in only behind compensation, work-life balance, and flexibility. This is partly due to the pandemic, and also the result of shifting job requirements and an uncertain job market, all of which have left people feeling unprepared for their next career move and desperately in need of more support.

In fact, new research from my company and Amazon reveals that 58% of employees are afraid that their skills have gone stale since the onset of the pandemic and 70% feel unprepared for the future of work. Moving into 2023, however, workers are laser-focused on remedying this situation: 89% said they’re motivated to improve their skills this year and 88% are already putting a significant amount of time and effort toward this.

But people need more support from their employers — around 2 out of 3 workers said it’s likely they’ll leave their company this year because there aren’t enough opportunities for skills development or career advancement, or because there’s no way for them to transition to a different job or a new career path. For 2023, this presents a compelling opportunity for businesses to retain their current workforce and attract new talent by offering better learning & development programs.

Trend #3: Employers will enhance their benefits to give workers a financial boost

Given the ongoing labor shortage, it’s no surprise 70% of large employers are planning benefit enhancements for 2023. One thing we’re sure to see is an increased expectation for employers to help people with their financial situation. This includes offering more affordable benefits as well as providing tools and programs designed to bolster employees’ financial well-being.

For example, 75% of companies offer (or plan to offer) tuition reimbursement. Companies like Amazon are leading the charge by covering tuition even for workers who have been at the company for only three months. Improving healthcare affordability will also be a key focus area — 41% of businesses have a low- or no-deductible health plan in place (and 11% are considering it), while others are offering virtual care solutions as a way to improve access and cut costs.

In 2023, employers will also do more to directly support their employees’ financial well-being, in part because workers’ financial stress is affecting their productivity. In fact, research from my company and SoFi found that on average, people are spending over 9 hours a week at work dealing with their financial issues. But while workers expect their companies to improve traditional benefits (e.g., retirement matching), they’re also looking for new offerings like an emergency savings fund, homeownership assistance, or even being paid in cryptocurrency.?

Trend #4: Companies will continue to ramp up their mental health support

While employers have significantly improved their mental well-being support over the past few years, it’s clear there’s still a long way to go. According to the APA, 59% of employees have experienced negative impacts of work-related stress in the past month,?and 81% say that employers’ support for mental health will be an important consideration when they look for work in the future.

The situation is so critical that just last month, the U.S. Surgeon General released a new Framework for Mental Health & Well-Being in the Workplace, citing reports of “quiet quitting,” the Great Resignation, and the changing nature of work. The framework is a call to action for employers, and it’s also part of President Biden’s strategy to transform mental health services for all Americans.

Fortunately, in 2023 most employers will continue to strive for a more supportive work environment (e.g., by offering greater flexibility), and many plan to expand their mental health coverage. Leaders are stepping up their support in part because they’ve realized that they’re not immune to mental health struggles either. In fact, research from my company and Deloitte discovered that nearly 70% of executives are seriously considering quitting for a job that better supports their well-being.

Trend #5: Businesses will focus on optimizing hybrid and remote work models

Several years after the COVID-19 pandemic ushered in a new era of remote work, many companies (and their employees) have now settled into hybrid or fully remote work arrangements. Among all full-time workers, it’s estimated that around 15% are fully remote, 30% are in a hybrid arrangement, and the remaining 55% are fully on-site. Notably, among workers who are able to work remotely, the hybrid model dominates.

Although the shift to remote work has largely been beneficial, dispersed team members have faced new challenges. Research from my company and Airspeed found that at least 1 out of 3 remote workers feels lonely, disconnected, or isolated, and most people don’t feel that their co-workers care about them. The situation is so dire that 2 out of 3 executives believe their employees may quit for a job at another company where they’d feel more connected.

Going into 2023, It's critical that employers address this issue, since a lack of connection has also been shown to affect motivation, productivity, and creativity. We’re likely to see many companies take advantage of the abundance of technologies that have entered the market specifically to support remote and hybrid workforces — from virtual office tools and solutions designed to optimize hybrid offices, to platforms designed to help employees socialize and develop stronger relationships.

These are just 5 of the 10 trends for 2023. Want to read the rest of the trends? You can access it in the?Workplace Intelligence Insider Archives. To receive the new edition every Monday morning,?subscribe?for free.