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CHRO Trends of 2023 - CHRO Search Firm - Cowen Partners

The CHRO Trends of 2023

The start of a new year typically gives rise to excitement and the potential for change, and 2023 is no different. After several years of massive challenges like the COVID-19 pandemic, supply chain difficulties, the rise of DE&I initiatives, and economic uncertainty, organizations are wondering what to expect in 2023.

Unfortunately, there are adverse remnants of the previous three years. The war in Ukraine is still ongoing, with no end yet in sight. While there have been whispers of a recession this year, the government has taken action to tamp down inflation and lessen the negative impacts on the greater economy.

DE&I remains vital to companies seeking to maintain and improve their brand reputations and culture. There’s also a greater emphasis on company benefits like flexibility and remote work.

Let’s examine the forthcoming trends for 2023 from a CHRO’s perspective.

2023: The Year of the Employee

Human Resources Executive Search

In past decades, workers were largely disadvantaged in the employee-employer relationship. Managers looked down on excessive use of vacation and sick leave, and employees fought hard to maintain their organizational status, lest they lose their boss’s favor and fail to rise through the company’s rank.

Today’s workforce is different. Due to various social movements, employees feel more comfortable voicing their need for self-care and attention to family. They’re no longer willing to work long hours in a bid for the next promotion. Instead, they’re looking for a relationship in the workplace that’s mutually beneficial.

We expect employee needs to impact how human resources executives oversee workplace culture in 2023. Here are a few trends to look out for.

Flexible Work Arrangements on the Rise

During the height of the COVID-19 pandemic, remote work was widespread. In fact, it was the only option for many businesses forced to close during ongoing lockdowns. While most companies now have business-as-usual policies, employees haven’t forgotten the benefits of remote work.

When to Consider Hiring an Interim CHRO

Not all companies can embrace a fully remote work culture. Some organizations require employees to be onsite for various reasons, such as manufacturing or inspecting products. Companies that value in-person collaboration are looking for innovative ways to keep this part of their culture. Other businesses have lengthy leases for expensive office space, making it challenging to support remote work initiatives.

Companies that aren’t capable of making the full leap to a remote work culture are attempting to meet their employees’ desires halfway. Many offer hybrid work schedules, where employees work partly from home and come to the office on specific days of the week.

Other organizations have gone a bit further, shortening the workweek to four days and allowing all their employees to enjoy three-day weekends on a rotating basis.

CHROs shouldn’t expect the desire for workplace flexibility to disappear. Organizations that can’t support a complete work-from-home environment should incorporate a hybrid policy. Otherwise, they may risk losing their edge as top talent looks for better options elsewhere.

Further Emphasis on DE&I Initiatives

DE&I initiatives were everywhere in 2022. Companies jumped to change their organization’s culture as concerns over gender and racial equality rose.

Today’s CHROs have made strategic movements to incorporate DE&I into their hiring practices through various methods, including writing inclusive job descriptions, providing unconscious bias training to hiring managers, and leveraging AI tools that reduce potential bias.

Going forward, we’ll see more developments in DE&I. CHROs who haven’t already overhauled their hiring practices will need to do so if they intend to attract top talent to their workforce. According to a recent Glassdoor survey, 76% of candidates consider a company’s diversity a critical factor when looking for a new job.

DE&I initiatives start in the human resources department, specifically when opening new positions to the general public. Therefore, it’s essential to ensure the hiring process is free from bias. Incorporating various software tools designed to reduce bias can help, such as pre-employment skills testing and resume screening.

CHROs should stay abreast of developments in the DE&I world to maintain their company’s reputation as an industry leader that anyone with a suitable skill set can join.

Need for Employee Cross-Training

Most employees don’t join their organization to stay in the same position for the remainder of their careers. In fact, according to the Bureau of Labor Statistics, the average tenure with a single employer was 4.1 years in 2022.

CHROs understand how expensive it can be to lose a high-performing employee. When workers leave, companies need to locate new employees with the appropriate skills and temperaments to fit in with the work environment and train them to succeed.

While most employees don’t stay at their organizations for decades, employers can increase the likelihood of long-term employee retention through cross-training and employment development programs.

Cross-training employees across different roles lessens the potential for knowledge loss when a worker leaves. Employees with knowledge of the position can assist if a colleague decides to resign, ensuring business continuity. Cross-training also prevents worker boredom since employees can learn and master new skills.

Executive Positions in High Demand for 2023

Upskilling and Reskilling

Another trend to look out for in 2023 is upskilling and reskilling employees. In our current economic environment, technology is constantly changing. The skills that employees learned during their college days may no longer be relevant in the future.

Employers can ensure their workforce remains competitive by identifying critical skills necessary to be successful in their roles. Different positions will likely need other skills training. For instance, someone in marketing may need training in digital advertising methods, while a software engineer may benefit from AI training.

CHROs can stay ahead of the trend by regularly meeting with department managers to understand the skills their team is lacking. Once they know what training is necessary, they can implement programs that employees can participate in to grow their skill sets.

Today’s CHROs Have Much Work to Do

The workforce of today is unlike any other we’ve had in previous decades. Where workers once could expect to graduate from college and maintain a solid career until they retire, that’s no longer the case without regular training and development. Technology is simply changing too quickly.

CHROs can ensure their workforce remains competitive through upskilling and reskilling. In addition, they’ll need to maintain workplace policies that attract top talent and provide a diverse working environment.

The Modern Chief Human Resources Officer (CHRO)

Historically, the area of human resources has garnered a reputation as purely administrative. Apart from the work they do in onboarding/offboarding talent and ensuring everyone toes the line, there’s often a temptation to see little else. In fact, some go so far as to tag HR as “the complaints department” and no more.

Unsurprisingly, this view tends to detract from the premium placed on the work that HR does and the value of its personnel. For context, a survey by HR tech firm, Namely, found that, out of 1,000 midsize organizations surveyed, just 7% had a C-level HR executive. Worse, when asked what departments they felt were most valuable to their organization, CEOs ranked HR in ninth place, according to research from McKinsey and Conference Board.

Yet, the imperative for proactive, multi-dimensional recruitment and talent management is only increasing. As we are seeing, human resources leaders are emerging front and center as a critical concern for organizations, and the majority of CEOs now see attracting and retaining talent as a top challenge.

Considering this, it may be time to rethink these dated perceptions about the HR function and what it brings to organizations, as well as the role that a Chief Human Resources Officer plays in unlocking this value.

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CHRO Trends of 2023 - CHRO Search Firm - Cowen Partners