Research from XpertHR shows that HR departments are anticipating another challenging year as we head into 2023 with teams seeking to protect the business in uncertain economic times by ensuring the right people are in the right roles, while also supporting employees sustainably through the cost-of-living crisis.
The research from XpertHR also shows organisations are putting more of a focus on culture change. Respondents to the survey referenced the changes made to working practices during the pandemic as a driver for this, including the introduction of hybrid working. Wellbeing, encompassing physical, emotional and financial is now firmly part of HR's strategy, with the link between wellbeing and productivity, and engagement and absence, now very clear.
HR priorities for 2023 across the sectors:
Private-sector services |
Not-for-profit |
Manufacturing and production |
Employee retention |
Reviewing pay and benefits |
Employee wellbeing including financial wellbeing |
Employee wellbeing, across emotional, financial and physical |
Employee wellbeing |
Retaining key talent |
Recruitment, specifically attracting talent |
Retaining key talent |
Pay and benefits review |
Improving the employee experience and engagement |
Culture change |
Learning and development focussing on upskilling |
Leadership development |
Employee engagement/experience |
Recruitment |
Upskilling all employees |
Diversity, equality and inclusion |
Employee engagement |
Review reward and recognition strategy |
Line manager development |
Creating a positive work culture |
Cost-of-living crisis |
Learning and development for all employees |
Change management |
Driving culture change |
Performance management |
A human resources information system |
Succession planning |
Succession planning |
Performance management |
XpertHR’s annual survey of HR priorities also looked at how HR departments and professionals are preparing for the year ahead. While wellbeing remains a key priority, there is also a much-needed focus on pay and benefits with respondents reporting the need be more flexible and aware of employees' needs. The research shows that organisations want to ensure that salary reviews do not get tied to inflation rates, which will not be practical, but instead deliver both sustainable and meaningful increases.
The tight labour market and associated retention issues are being felt across the board. But many organisations are making plans to address this for the longer term and engaging in robust programmes that will help meet recruitment and retention needs. Organisations are using pay and benefits to position themselves appropriately to attract top talent but are also keen to ensure that, where possible and sustainable, they are supporting employees through the cost-of-living crisis.
However, it was clear from the survey that HR departments feel that securing management buy-in and engagement is the top barrier towards the progression of these priorities. With the cost-of-living crisis, many business leaders have turned their attention to mitigating risks to the business, including through controlling costs. Yet such budgetary constraints are a real concern for HR and may hinder their ability to fully support the business in retaining key talent through talent development programmes.
Noelle Murphy, Senior HR insights editor, XpertHR, said:
“Just as it seemed that the coronavirus pandemic had finally lessened its hold on every point of daily life, deep economic uncertainty from the war in Ukraine, global recovery from the pandemic and a destabilising mini-budget have led to a severe cost-of-living crisis, raging inflation and troubling business challenges. Towards the end of 2022, there has been a noticeable shift from rebuilding, to a focus on reacting to a difficult and uncertain economic climate.
“The challenge being felt by HR is how to continue progressing strategic priorities while ensuring the business continues to have the right people in the right roles at the right time. There are some concerns around accessing the required skills and experience from a tight labour market and respondents tell us they are looking to succession planning to protect the business from the threat of losing key talent.
“A key challenge for HR in the sector as we head into 2023 is to build on its strategic reach during this time, and demonstrate that, through effective planning and rightsizing of their organisation, it plays a key role in supporting the business through these difficult times.”