6 Predictions for People Managers in 2023

​Predicting the future of work is no easy task. But it's necessary to help people managers keep employees engaged and productive.

"It's a healthy exercise to think about what we're learning today and what it can tell us about tomorrow," says Mike Monahan, HR transformation principal at accounting firm Grant Thornton LLP in New York City.

However, Monahan warns that HR predictions can be especially tricky to get right because they require the ability to anticipate human behavior in a rapidly evolving society. Here are six predictions for 2023.

1. Hybrid work schedules will continue to evolve.

For many industries, hybrid work schedules are here to stay, especially with a recent Gallup poll finding that 4 in 10 employees want to be in the office two to three days a week.

"The anchor point for culture in organizations will increasingly move away from the physical office to teams," says James Brogan, CEO and co-founder of PepTalk, a Dublin-based employee engagement software firm with offices in New York City. Individual teams are now where organizations can build that sense of connection and belonging among employees, he says, and the responsibility for building that environment falls with people managers.

Expect some companies to pilot a four-day workweek in 2023, predicts Mandy Price, co-founder and CEO of Kanarys, a Dallas-based software firm that focuses on diversity, equity and inclusion (DE&I) data. More than 70 U.K companies participated in a six-month pilot of a four-day workweek, and early results show that productivity was maintained or improved at 95 percent of the participating firms, she says.

In the U.S., several software companies, including Basecamp, Bit.io and Buffer, are experimenting with four-day workweeks, and Rep. Mark Takano, D-Calif., introduced legislation in July that would reduce the standard workweek from 40 hours to 32 hours, she says.

2. Professional development remains a top priority.

Providing opportunities for employees to learn new skills will help recession-proof businesses, Price predicts. "Investing in the upskilling of current employees will be a key focus for companies [this] year," she says. Professional development will help companies prepare for a period of economic uncertainty, and instead of hiring new talent, managers will train workers to have the needed skills to sustain their business.

Upskilling also contributes to employee retention, Price says. Employees value the ability to learn new skills so much that 83 percent of workers rank it as their top priority for 2023, according to a recent study by Boston-based research firm Workplace Intelligence. The study also found that 74 percent of employees are willing to leave their current job due to a lack of skill building and career mobility opportunities. 

3. Diversity and purpose will become an employee expectation.

Employees now expect companies to support DE&I policies, and even investors are putting pressure on organizations to make progress on their DE&I goals, says Piyush Mehta, chief human resource officer for Genpact, a New York City-based global professional services firm. "Employees today want to work for a company that is driving a sense of shared purpose that extends beyond profit and keeps the company and its employees moving toward a collective goal of creating a better, more sustainable world," he says.

Purpose will continue to be critical to hiring and retention efforts, because employees and potential hires want to know what the company stands for and the role it plays in the world, he says.

Diversity is especially important to Generation Z employees, with 83 percent of candidates from that generation indicating a company's commitment to DE&I is important when evaluating a job offer, according to Weston, Mass.-based job search platform Monster.

The influence of Generation Z in the workforce will continue to grow as more members of this generation accept full-time positions. In fact, the Generation Z workforce is projected to triple in size, growing to 51 million by 2030 and become 30 percent of the overall workforce, according to a recent study by Santa Monica, Calif.-based software developer SnapChat. In addition, 48 percent of Generation Z identify as racial or ethnic minorities, making it the most diverse generation, according to Pew Research Center.

4. Pay transparency will continue gaining momentum.

By the end of 2022, 17 U.S. states had laws around pay transparency, requiring employers to provide salary information to job candidates. With new pay transparency laws going into effect in Washington state and California at the beginning of 2023, one-fifth of all U.S. workers will be covered under pay transparency laws, Price says. In fact, 98 percent of workers are in favor of salary disclosures, according to Monster.

5. Emotional and financial well-being will continue to be priorities.

According to McKinsey, 60 percent of employees have experienced at least one mental health challenge at some point in their lives. Perhaps it's not surprising that 2 out of 3 U.S. employers (67 percent) plan to make employee mental health and emotional well-being programs one of their top three health priorities over the next three years, according to a WTW survey. 

"Employers will look for creative ways to ease the everyday life stresses facing their employees, from inflationary pressures to mental health issues and caring for aging parents," says Claudine Hoverson, chief talent officer for Synchrony, a financial services firm based in Stamford, Conn.

With economic uncertainty and soaring inflation, financial well-being also will be a top concern this year, says Sheri Atwood, CEO and founder of SupportPay, a software company based in Sacramento, Calif.

"Research has shown that financial well-being is tied to retention, productivity and an employee's overall mental and physical well-being," Atwood says. According to a recent PwC survey, 1 in 4 full-time employees are working more jobs than in previous years to make ends meet, and 56 percent are stressed about their finances.

6. More employees will have caregiver responsibilities.

Since the pandemic began, more employees have taken on caregiver responsibilities beyond parenting to include caring for aging parents or family members with disabilities. Workers with caregiving responsibilities are the fastest-growing category of employee identity groups, Price says.

As a result, managers will need to play a larger role in supporting employees with caregiver responsibilities. "Flexibility for caregivers is an element of our work experience from [the pandemic] that will endure," Monahan says.

Lisa Rabasca Roepe is a freelance writer based in Arlington, Va.