In 2022 we rode The Great Resignation and are now beginning to experience the growing trend of quiet quitting. What’s on the cards for 2023?
As the end of 2022 nears, we are looking forward and gathering our predictions about the future of work in 2023.
And we have a few.
Here we’ll look at the lay of the land and how certain conditions might influence the future of work in 2023. Then we’ll share our predictions and thoughts on industries that might see a boom in 2023.
In 2022 we rode The Great Resignation wave, and as we close out the year, are beginning to experience the growing trend of quiet quitting. These trends, coupled with a skills shortage that affects all industries indiscriminately, have well and truly shifted negotiating power the way of employees. And their key priorities? Increased salaries, greater flexibility to work in a way that complements their personal priorities, and value alignment with the organisation.
Companies have responded. They’ve become more flexible, embracing remote and hybrid work environments, and have diversified their offering. Wages have also grown, with the most recent Wage Price Index increasing by one per cent in the last quarter and seeing the highest quarterly growth in hourly wages since 2012.
Unfortunately, while wages have risen, for most, it hasn’t been enough.
Interest rates continue to rise, with the latest cash rate sitting at 3.1 per cent. That’s an increase of a full 300 basis points from the beginning of the year and the highest interest rates we’ve seen in a decade.
The cost of living has also increased, touching everything from petrol to electricity and, of course, iceberg lettuce.
There’s still no consensus on whether we will enter a recession in 2023, but times will continue to be tough for most Australians as inflation shows no signs of remedying.
The inflation surge isn’t isolated to Australia and has affected all corners of the world. But market volatility isn’t the only concern globally. Russia invaded Ukraine and protests continue in Iran and China.
Overall, there’s uncertainty and volatility, disruptions to the supply chain and surging prices. People, more than ever, are looking for supportive workplaces and ones that fit into their lives rather than the other way around.
So, with a look at what was, how does that set the stage for our predictions about the future of work in 2023?
We’ll be entering 2023 with a skills shortage that has lasted more than a year. As a result, we’ll see employers renew their focus on people and culture to retain their talent. And the most important factors to support this are HR staff and a HR program, both with a people-first mentality.
The pandemic intensified moral concerns about a business’ impact on society. It also put enormous strain on management to meet mental health needs as well as create positive work environments where their people mattered. It was a true shift from processes to people, and this continues in 2023.
In 2023, HR will be:
HR will also be important to rebuild teams that are still understaffed as well as develop training programs to ensure they stay and grow with the business.
Wages increased substantially in 2022, however, we expect them to reach a ceiling in 2023. As profitability in businesses goes down, expect the attractive salary packages that companies were offering to entice new workers to also reduce. But companies will be sweetening their offers with other incentives.
Health and well-being are key areas that companies are willing to invest in, whether this is a gym membership, health cash, or mental health days. They are also willing to lean further into employee requests for flexibility and we think there’s a good chance progressive businesses will offer a four-day workweek in 2023.
And, if you’re not prepared to get on board with workplace flexibility, expect higher than normal turnover rates. We expect to see the gap between rigid businesses and flexible workplaces widen, with employees more likely to stay with the latter.
Companies will need to continue to adapt to stem the skills shortage.
By now, most employers have accepted that an available but great candidate may not have all the training they’d like. Since companies have already started to think about training on the job, we think they’ll expand on this front. Businesses will begin tapping into universities or TAFE to create traineeships or more graduate positions so they can attract new talent straight from tertiary education.
This effort to invest in fresh-from-university candidates will be in the hope they stay long-term.
Social action has been gaining prominence in the workforce.
Employees have increasingly sought out information on a business’ social action and use this information to make an informed decision on their value alignment and whether they are a good match. We expect this to be a huge discussion point in 2023 – and if your social activity isn’t there, candidates will walk.
Social action includes:
Green values also fall under this umbrella, and are something businesses should make note of.
By 2025, millennials and gen z will make up 75 per cent of the workforce – and their values are loudly green. The Deloitte Global Millennial Survey 2020 revealed that millennials rated climate change and protecting the environment as their top concerns, and they will seek out businesses whose values align with their own.
If employers and employees continue embracing hybrid and remote work, they will need the systems to support a geographically dispersed workforce. We expect to see an increase in companies investing in tech in a few ways:
HR is fundamental for rebuilding teams, keeping culture in check, and promoting people-first programs. Without such support, even if you can find and hire great people, they will leave.
We’ve already seen a boom in HR hires as we near the end of the year, and this trend will only become more prominent as we move through 2023.
There are a few hurdles in residential construction, with project timeframes doubling and limited access to materials and labour. We expect this will continue well into 2023.
But it’s a different story for civil, commercial, and high-rise residential construction.
There will be a focus here on recouping lost investments, especially as they were impacted by La Niña in 2022.
Labor’s industrial relations laws passed the parliament in late 2022. The most controversial part of this bill, multi-employer bargaining, will make it easier for unions to negotiate pay deals. This will affect a host of industries including childcare and aged care, but also engineering, manufacturing, and transport.
This will make it hard for SMEs to remain competitive, and businesses will need to raise wages to keep their staff. We expect the costs for their services to also increase to absorb this salary change. If businesses find themselves in a position where they can’t afford to keep staff on, expect ‘unicorn’ candidates to become available in the market – and they will be asking for salaries that might be overinflated.
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