What the Workplace Will Look Like in 2023: How Leaders Can Prepare

As I venture to imagine what we can expect in the workplace in 2023, I’m thinking about the rule of three. Three is powerful number for humans; it’s where patterns begin, and where we start to draw meaning from them. It’s also a well-known storytelling tool – we find satisfaction in a three-act structure - beginning, middle and end.

?

If we apply the rule of three to the workforce transformation story over the last few years, it might start like this:

?

1.?????In 2021, the workforce reckoning begins in earnest with a mass rejection of business as usual in what’s known as the Great Resignation.

2.?????In 2022, the work/life balance scale dips heavily to the side of life – with employees making it known that they want to prioritize their wellbeing and they are not willing to give their all to an unfulfilling job.

But what is the next act? The seismic impact of the last two years, along with shifting worker demographics, have triggered sweeping changes across worker preferences and perspectives. In 2023 and beyond, how organizations and leadership respond will determine their success in securing, retaining, and engaging the talent needed to achieve their strategic objectives.

?

Here are four ways the workplace will continue to evolve next year, and how companies and their leaders can position themselves to best meet this moment:

?

1)????Hybrid and remote work are here to stay.

Within the knowledge economy, workers have spoken, and companies are listening: people want flexible work options. Hybrid work continues to increase, nearly half of employees worked offsite at least part of the time as of June 2022. Only 6% of workers indicate a desire to work exclusively onsite; compare this with 2019, when 60% of workers were fully onsite. This dramatic shift in how people view their relationship to work is playing out in the job market, where applicant demand for remote jobs far outstrips supply, and organizations struggle to fill positions required to work in the office.

?

This creates a competitive edge for talent to companies who?embrace new models of working versus those who default to traditional work environments – but it places demands on leaders to reimagine organizational culture, connection, and collective work. Establishing a sense of cohesion and belonging among teams is critical for sharing ideas, collaborating and communication.

?

Leaders must intentionally engineer opportunities for teams to prioritize relationship-building, both in person, where possible, as well as virtually. For example, leaders can encourage onsite connection by declaring specific weekdays for teams to work together in person or hosting a “connection week” for all leaders to converge at one location, with learning and social events. Some are shrinking or reimagining their real estate footprint to create “employee experience spaces” – modern meeting spaces for groups?to collaborate, training spaces, food court-like eating venues, and recreational options, designed to entice people to spend time there.

?

There are also a number of tools that can enable connection virtually, if onsite team development is not possible. Teams already utilize video conferencing, chat functions and other applications to build connection.?New technologies using everything from hologram to virtual reality to artificial intelligence are coming to market, which may give leaders an advanced set of tools.?Regardless of the type of technology, how leaders employ it will make the difference in its effectiveness in driving connection and engagement.

?

All of this requires a rethink of process, systems, and technologies across the organization, to structure the most optimal environment for people to work together and foster a sense of team.

?

2)????Employees will behave more like gig workers to protect their work/life boundaries.?

While a recession could tip the scales back to an?employer market, employees have higher expectations on how work should configure to?their lives – not the other way around. In a 2021 Flexjobs study of 4600 adults, the number one reason for seeking a career change was work-life balance. ?They are taking ownership of how they spend their time and energy, which looks different for every individual. each is crafting a bespoke situation that specifically works for them.?

Employers who offer workers the autonomy to architect their work and their lives in ways that make sense for them will have an advantage in the talent marketplace. People want to define where, when, and how they perform their work – to shape a bespoke situation for their individual needs.?Some employees have even moved away from their worksite, with no intention of returning. They are prioritizing lifestyle choices, such as being near family, living in areas that suit them and increased travel and?experiences.

This is not all bad news for companies. It can open up recruiting possibilities, if they are not confined to a specific geography within an hour commute from a worksite. Companies and teams can embrace a “talent without borders” mindset to capitalize on a new world of candidates not previously available to them.

?

3)????Organizations will redouble efforts to diversify leadership ranks.

The business case for diversity is clear: companies with diverse leadership have higher profitability and stronger shareholder returns.?Despite these incentives, and the significant increase in DEI roles within organizations, the diversity trend line in leadership ranks is slowing, and in some cases, reversing. According to the World Economic Forum:

?

·???????Of the 1000-plus large firms globally, merely a third of them substantially improved their diversity; the efforts of the remaining two-thirds stagnated or regressed

·???????Between 2017-2019, the proportion of women executives increased just one percentage point; representation of ethnic minorities improved two points.

?

Not only does this impact business outcomes (a lagging success indicator), but it also makes it difficult for organizations to attract and retain talent (a leading success indicator). In a CNBC study of 8,233 employed adults, eighty percent said diversity, equity and inclusion are important to them and want to work for organizations who value DEI. Millennials, who account for upwards of 35% of the workforce and Gen Zers, who are expected to make up about 27% of the workforce, continue to demand visible commitments to their values, including social responsibility, from their employers; nearly two in five say they have rejected a job or assignment because it did not align with their values. Meanwhile, those who are satisfied with their employers’ societal and environmental impact, and their efforts to create a diverse and inclusive culture, are more likely to stay with their employers for over 5 years.

Organizations that want to win in the talent market must demonstrate significant commitments to ESG/corporate social responsibility and DEI strategies, to propel diversity and inclusion efforts forward.

?

4)????Leadership roles are changing and not everyone is ready for it.?

Leaders have had to manage change on a global scale with unknown parameters and guidance, all while navigating a challenging talent marketplace. These dynamics have drastically shifted employee-employer relationship. Teams expect and demand that their leader understand and meet their needs?in the workplace, and structure the?work environment to best enable their individual and collective success.

Further, leaders must redesign how work gets done especially when teams are a blend of in-person/hybrid/remote work. Leaders who have heavily relied on regular face-to-face contact with their employees will struggle to enable the performance of their teams. Instead, they must clearly articulate expectations, provide the right level of autonomy and manage to outcomes, with empathy, adaptability, and authenticity.

?

This is a more complex and nuanced way of leading and can be a difficult transition to make, even for experienced leaders; newer, less experienced leaders need additional development to prepare them for the task. Millennials are taking on more leadership and even C-suite roles; as they continue to ascend in organizations, they may not feel ready for the pace of change and evolving leadership expectations.?

?

Companies are left with mismatched leadership skills and teams creating a substantial challenge in training and upskilling leaders to build and drive results. Leaders at all levels must learn the “levers” to drive performance and engagement in the new world of work. They must take a more personalized approach and focus on the strengths, purpose and needs of their people. Organizations who train and coach managers to inspire loyalty and higher performance will see a return on their investment.

As we enter into 2023 and what we might call the third act of the new world of work, leaders will need to take a leading role in how best to help teams and employees succeed. As we have witnessed over these past two years, the dynamics will continue to change which will require leaders to push forward with more human-centered workplaces, personalized leadership strategies, and diversity and inclusion improvements to bring positive change for both leaders and employees.