With 2022 fast becoming a dim and distant memory, the continuing impact of external forces such as high inflation, the cost-of-living crisis, on-going talent shortages and the war in the Ukraine will make 2023 another difficult year. With these major challenges continuing to dominate, clients and local businesses will have deal with the impact on their employees. David Hudson, owner of The HR Dept Clapham and local business owner warns “Whilst local business owners will find it difficult to influence what’s happening in the world today, being equipped to deal with the risks and opportunities these things bring will put them in a much stronger position to achieve growth and development targets in 2023 through their people. It’s those people that will mainly determine how successful this year will be”.
Combining our experience in the work we do with our clients and current trends in people management, we share our predictions around the risks and opportunities that shouldn’t be avoided this year and suggest how local businesses can deal with them.
Good people are in short supply
Risks: All the clients we work with that employ staff have experienced scarcity of talent and the knock-on effects this brings. The supply from traditional talent pools is low and retaining talent in a hybrid environment is difficult. Along with the cost of living crisis, people are reluctant to move which is leading to less successful recruitment rates.
Opportunities: Businesses need to think differently about recruitment; traditional recruitment methods are no longer effective. There’s a growing trend towards recruiting candidates based on their ability to perform, rather than the traditional, direct match with academic, vocational or experience requirements. One of the indirect benefits of this approach is that you can attract a much more diverse pool of candidates.
Managers and leaders that don’t have the right skills are holding businesses back
Risks: Financial pressures have been the reality for many businesses since the pandemic and this has led to difficult decisions around costs. Often, one of the first costs to be slashed are around training and development. Yet, recent studies show that the number of employees that leave a business for better development opportunities is the same as those that leave for more pay.
Opportunities: We see a growing trend around employees being more focused on individual professional development and career paths. Business owners should embrace this because providing training and development is one of the top ways to retain talent. From a cost perspective, it is much cheaper to invest in training than it is to pay for recruitment fees and indirectly, lost time and productivity when people leave. Training managers to competently manage employees greatly reduces HR problems and subsequently the risks attached to staff management.
Health and well-being – sometimes what you can’t see has the biggest impact
Risks: We see the reported rising deterioration of employee health and well-being having a big impact on our clients, particularly around long-term absences. Recent studies show that nearly 60% of employees are stressed at their jobs every day and the UK loses 131 million working days a year due to ill-health according to the CBI.
Opportunities: Developing health and well-being interventions will show employees you’re taking a holistic approach to provide them with support in these turbulent times, driving up trust and in turn, retention.
Recent changes in employment law have serious consequences if they are missed
Risks: There have been some important changes in employment law during 2022 with more to follow in April 2023. Fit note digitalisation and changes to right to work checks call for a different way of working but have they been picked up? With so many other priorities in 2022, we often come across local businesses who are blissfully unaware.
Opportunities: Now we are out of the crisis mode that the pandemic brought, businesses should be reviewing their employment documents to make sure they are fully compliant to avoid hefty fines or legal action by employees. This could help avoid potentially costly employment tribunals or statutory fines.
It’s all about people
Finally, one of the most subtle but fundamental shifts that we predict, and the next big change after flexible working, is a growing expectation for employees to be seen as people and not just as employees. What does that mean? David Hudson explains “we are seeing increasing research that shows the traditional work/life boundaries are blurred at best and with hybrid working, almost gone. Employees want far more connectiveness with work. They want it to be ok to be self-expressive, for their employer to be connected with the issues they care about, and to work in an environment where their life needs are reflected in policies, benefits and overall a culture that supports them at each key life event. An example of this is the emergence of the ‘hustle culture’ where more employees are refusing to devote more and more of their own time if employers are not recognising their efforts. I see the most successful leaders of the future will be more ‘human-focused’ and lead with a ‘people first’ approach rather than ‘process or target first’ approach. The future of work will be a lot about the employee experience and given how much time we spend at work, businesses that don’t embrace that now are likely to struggle to recruit and retain good people in the future”.
Although 2023 will be another year of challenge and change, we are proud to be continuing to support local businesses. We continue to provide local and personal HR support so if any of the above resonates or fills you with dread about what to do next, get in touch!
