A diverse group of SIOP members are serving as Trend Champions for the people-related work trends that SIOP members collaboratively predicted to be the most impactful in 2023. Each Trend Champion has expertise in and professional passion for their trend subject. SIOP appreciates their service to the profession in providing quarterly updates on their chosen topics.
Find the full list of topics and links to the other Top 10 Work Trends here.
The unemployment rate remained relatively stable at 3.8% despite the small increase of 0.3 percentage points between July and August (U.S. Bureau of Labor Statistics, 2023). A forecast from The Conference Board shows that we could be ending the year with unemployment rates in the 4% range (The Conference Board, 2022), higher than the monthly unemployment rates in 2022 in general.
With a minor but steady growth in job openings and wage, economists are no longer concerned about a possible recession (DePillis, 2023). In general, the labor market seems to be slowing based on trends observed in June 2023, but are staying resilient overall (Maurer, 2023). This means that employers will continue to face competitions in talent.
Return-to-office continues to be a highly discussed topic. While many large companies have asked employees to come into the office a few days a week, many employees are not sticking to the 9am-to-5pm tradition. Rather, the new pattern is to work partly at the office and partly at home in a given day depending on needs such as in-person meetings and team building activities (Bhattarai, 2023). While employers prefer employees to spend more time at the office, it is unclear how they will enforce the rules and how setting strict rules will impact employee retention and talent attraction.
We are seeing more progress being made toward the four-day workweek option. More employers and employees are ready to try a four-day workweek option. Some states are also exploring policies related to a reduced-hour workweek (Gurchiek, 2023). Although a four-day workweek could be an effective strategy in talent attraction, employers are still worried about how this will impact business operations and growth (Laker, 2023).
Internal mobility hasn’t been utilized as much as it should have been. Employees often have concerns about how role explorations will be received by their current manager, especially after an unsuccessful role transfer. On the other hand, negotiations between managers over a team member can also be uncomfortable (Quen, 2023). Hiring managers may also have doubts about reasons for an internal candidate to switch roles and may prefer to bring outside knowledge. These blockers will continue to impede progress on internal mobility unless HR professionals develop tactics to address them.
Staying ahead of the trends, strategies such as offering in-office flexibility, a four-day workweek option, and well-streamlined internal mobility practices can distinguish employers from their talent competitors. As HR professionals, the impacts that we make in business operations and industry labor policies will further demonstrate our importance to organizations and to the greater society.
In the April and May timeframe, we saw a small increase in job openings and unemployment rate while the hiring rate remained relatively unchanged (U.S. Bureau of Labor Statistics; The White House). Despite news of layoffs, the Bureau saw a minor drop in the rate of layoffs and discharges on a national scale (U.S. Bureau of Labor Statistics). It is possible that new job opportunities are offsetting job losses. For example, without digging into details of job types, the 283 thousand average job gains per month (The White House) may be offsetting the 207 thousand job losses in the tech industry (Layoffs.fyi). On the global scale, LinkedIn reported a decrease in hiring rate when compared with the 2022 baseline. Overall, we can summarize the talent market in Q2 2023 as “not as bad as a pessimistic person would think, but definitely not blooming.”
Return-to-office and internal mobility stood out as the two key topics since my last update. In Q2 2023, the number of companies with a hybrid arrangement has edged up while both the fully-in-office and fully-remote model have decreased (Semuels, 2023). Employers seem to have found their preference, but some have received push-backs due to reasons such as relocation needs and reduced flexibility (Mayer, 2023). We expect to see more companies adopting the hybrid model given the demand from workers.
Internal mobility continues to be one of the top strategies. When executed well, it could improve retention and engagement, lower recruitment costs, and encourage innovation (Timmes, 2023). Different types of internal mobility, such as lateral moves, job rotations, and job swaps, increase variety in jobs and roles for employees without employers having to pay the cost of hiring. Yet, this strategy is often underutilized (Maurer, 2022). One noteworthy finding about internal mobility is that people leaders are twice as likely to move internally as individual contributors, indicating that there may be differences in the commitment to or availability of opportunities at organizations across job types (LinkedIn).
The World Economic Forum reported that employers could be facing a sizable labor structure churn in the next five years, further highlighting the need in upskilling; it is predicted that the creation of new jobs may not be enough to offset the jobs that will be eliminated. As job crafting (Dutton & Wrzesniewski, 2020) and “self-authorship” of career paths (George, 2022) become prevalent in the post-pandemic era, it is critical that companies build and maintain a strong employer brand and address worker demands such as flexibility and wellness in their hiring and retention practices.
Several questions came to my mind as I think about talent attraction and retention in Q1 2023. Is the market still a “candidate-driven” market, given the recent and ongoing layoffs at large companies? Is the “great resignation” tapering off now that we are better adapted to the COVID pandemic?
For the most part, the number of hires and total separations remained relatively stable as of January 2023 (Bureau of Labor Statistics, 2023). Many (e.g., DePillis, 2023; Tarki, 2023) were optimistic about the U.S. job market despite concerns with layoffs and inflation. An article in The Wall Street Journal said that staffing in one sector (e.g., hospitality and transportation) could be making up for job losses in others. With a low unemployment rate and new jobs being added, U.S. employers are still facing fierce competition in attracting and retaining talent (see Steemers, 2023; Dennison, 2023).
Some of the most talked about trends are policies and strategies around competitive pay, the possibility of a four-day work week, remote and hybrid work, upskilling, internal mobility, and employee experience (see resources from Indeed and Glassdoor, Gartner, Kornferry, and Mercer). Those from the academics have also talked about opportunities around corporate reputation and employer branding. More specifically, they discussed how an inclusive and considerate workplace can offer an advantage in the talent attraction and retention space.
We are seeing news of additional layoffs, slowdown of economy, and bank system failing in the last month of Q1 2023. This leaves us with a lot of uncertainty about the job market and talent practices. We may see people holding on to their current jobs. We may see employers being more selective over talent. We may see prosperity being shifted from one industry to another industry. As we move into 2023, we will learn more about these trends and see where they take us in the world of work.
Champion: Li Lin
Li Lin, Ph.D., is a people analytics manager at Amazon, where she focuses on psychological safety and leadership behaviors and supports day-to-day analytic operations of her team. Li was previously a people research scientist at Meta and talent management senior analyst at PepsiCo. In her work, she uses statistical models and survey methods to provide strategic insights and develop interventions. Some of her previous areas of work include employee pay equity, turnover risk prediction, employee engagement, manager equality, and leadership development.
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