2023 Workplace Predictions from The Workforce Institute at UKG show that the pandemic’s impact is still being felt deeply by employees, leaders, and HR practitioners

The Workforce Institute at UKG today released its annual list of Workplace Predictions, forecasting the top trends that will impact the workforce in 2023:

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1. ROI of DEI&B: Companies that invest in diversity, equity, inclusion, and belonging (DEI&B) programs during tough times will see better business results, while those who cut fall behind.
2. Metrics That Matter: The best leaders will “show their work” to gain greater buy-in from employees, especially with returning to the office and making difficult decisions.
3. A Heroes’ Exit? Workers who hold on to service-oriented, essential roles — such as HR, healthcare workers, retail, and teachers — will be rewarded as many of their peers search for new careers.
4. People-Leader Paradox: Middle management roles will become increasingly valuable to the organization, though the job will be less valued and sought-after by many workers.
5. Compliance Correction: The hidden costs and compliance complexities of remote and hybrid work will have major financial ramifications on both organizations and their employees. 

The Workforce Institute advisory board discussed the many ways traditional work has changed over the past few years, mainly due to the pandemic, and the one constant that has remained: The most compassionate and caring companies stand to benefit the most through, maybe even despite, times of uncertainty. There are several outside factors impacting employees, from mental health to natural disasters to social unrest to the economy, and companies can play an influential role in improving work and life for their people. As workers and companies start to find their working rhythm in 2023, respect for all people — and valuing the differences and dynamics that come with each individual person — will become key to keeping top talent, building customer relationships, and fostering business success.

Top Workplace Trends for 2023

ROI of DEI&B: Companies that invest in DEI&B programs during tough times will see better business results, while those who cut fall behind. In 2022, The Workforce Institute predicted that corporate environmental, social, and governance (ESG) programs would emerge as a make-or-break asset for business stability and growth. As a continuation of that prediction, DEI&B as a business imperative will reach the next level this year. Many leaders have pledged to do more to improve DEI&B at their organization, or to launch a program altogether, and employees and customers increasingly prefer to work for or do business with companies wholly committed to meaningful DEI&B. Equity in its many forms, from recruiting to wages to opportunity, is better for all people. In 2023, we will see more proof that DEI&B is also better for the bottom line. Organizations that double down on DEI&B — even in the hardest of times, such as during a recession — see better returns on their investment, and a greater sense of belonging for people will help boost retention and engagement, as the unending war for talent wages on.

Metrics That Matter: The best leaders will “show their work” to gain greater buy-in from employees, especially with returning to the office and making difficult decisions. Schoolchildren are often asked to “show the work” when solving problems. In the year ahead, businesses and leaders who do the same by showing the data and metrics behind their decisions will foster greater loyalty, trust, and productivity from their people. Even if employees don’t always like or agree with the decisions made, the best leaders will be celebrated for providing greater transparency into the why behind decisions and company strategy. This will be key for tackling 2023’s challenges, including encouraging employees back to the workplace after a rise in, and increased preference for, remote and hybrid work schedules.

A Heroes’ Exit? Workers who hold on to service-oriented, essential roles — such as HR, healthcare workers, retail, and teachers — will be rewarded as many of their peers search for new careers. Organizations have asked a lot of people on the frontlines these past three years. Those workers who’ve continued to show up throughout the most trying of times will consider leaving, creating a second wave of the Great Resignation in their wake. Likewise, HR professionals have carried additional responsibilities as more and more employees have left, and many have burned out and grown weary of the original reason they joined HR in the first place — to help people. Those who decide to stay could be rewarded for their loyalty, in the form of promotions and wage increases. Organizations need to start planning now for what happens when more employees, including HR, leave en masse. This includes cross-training new and existing employees, reskilling talent, diversifying recruiting efforts, and keeping an open mind about the transferability of skills.

People-Leader Paradox: Middle management roles become increasingly valuable to the organization, though the job will be less valued and sought-after by many workers. Being a middle manager is one of the hardest roles in the workplace today — and many workers no longer want to take on the added stress and strain of managing people. Some people leaders will even take demotions and move back to individual contributor roles with a pay cut, if it means better mental health and less overall responsibility. In 2023, capable and passionate managers will be in high demand, as organizations scramble to fill leadership vacancies amid rising disinterest in the role. This will create a “people-leader paradox,” as organizational demand for leaders increases and employees’ desire for the role decreases.

Compliance Correction: The hidden costs and compliance complexities of remote and hybrid work will have major financial ramifications on both organizations and their employees. After mostly flying under the radar since 2020, companies and their people will start to feel the financial impacts of previously unforeseen costs, legalities, tax implications, and compliance requirements around the world that come with a more flexible, remote, and hybrid workforce (e.g., people working in different countries than their employers, working part time in one location for months at a time). Employees, too, will have to pay closer attention to what they owe the governments in the countries, states, and counties where they live and work, lest they end up paying more taxes than originally expected. Organizations and their employees will need to consider the short- and long-term financial implications of their workplace policies and programs.

The Workforce Institute at UKG is a think tank that helps organizations drive performance by addressing human capital management (HCM) and workforce management challenges while providing an important voice for employees, including frontline and hourly workers. Each year, the institute’s advisory board of industry experts convenes to formulate its top work-related predictions on what organizations are most likely to encounter in the year ahead. The annual list of Workplace Predictions is designed to help companies prepare for the coming year, effectively navigate change, and better serve their employees and customers.

Supporting Resources

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• UKG is tracking changes in the U.S. economy week by week. Read and subscribe to the UKG Workforce Activity Report, a proprietary labor index that provides insight into the frontline workforce.
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About The Workforce Institute at UKG

The Workforce Institute at UKG provides research and education on critical workplace issues facing organizations around the world. By bringing together a global consortium of HR and workforce management thought leaders, the think tank is uniquely positioned to empower organizations with practical ideas for optimizing the 21st-century workplace while also providing an important voice for employees, including frontline and hourly workers. Founded in 2007, The Workforce Institute focuses its research and education — including books, podcasts, surveys, blogs, and its annual list of workplace predictions — on balancing the needs and desires of diverse employee populations with the interests of organizations in order to manage absenteeism, fight burnout, develop equitable work schedules, and build strong leaders, all to drive inspired performance.

About UKG

At UKG, our purpose is people. As strong believers in the power of culture and belonging as the secret to success, we champion great workplaces and build lifelong partnerships with our customers to show what’s possible when businesses invest in their people. Born from a historic merger that created one of the world’s leading HCM cloud companies, our Life-work Technology approach to HR, payroll, and workforce management solutions for all people helps more than 70,000 organizations around the globe and across every industry anticipate and adapt to their employees’ needs beyond just work. To learn more, visit ukg.com.

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