Using the collective experience and expertise of Inspirus thought leaders and subject matter experts, this report dives into what we see trending for the first quarter of 2023, and our vision of how these trends will impact the future of our industry and our clients’ programs.
These trends and forecasts cover current business critical topics that HR professionals need to know:
We’re pleased to present the 2023 Inspirus Trends & Forecasts Report. Our 2022 report was enthusiastically read by over 20K professionals and that number is still climbing! We’re grateful for the feedback and suggestions around the content inclusions and delivery schedule so that we can evolve this publication to best suit the needs of our clients and colleagues.
So, the 2023 edition introduces a new format — a quarterly report. This frequency will allow us to address the constant changes we see happening in our industry. The report will continue to deliver fresh insights, unique perspectives, actionable strategies, and of course best practices, to help you elevate your employee engagement, but in bite-sized chunks.
If 2022 was any indication of what we’ll encounter in 2023 and beyond, buckle up. Employees still hold the upper hand, demanding the workplace flexibility they grew accustomed to during the pandemic. They are no longer tolerant of the toxic culture that they’ve withstood for so long and are punctuating their position by quitting and “quiet quitting,” keeping turnover rates high and retention a challenge. Take Elon Musk’s authoritarian leadership style, for example. His impulsive decision-making, without feedback from employees or leadership, is making headlines as this report is being written! His actions have turned Twitter on its head, and the exodus of employees — both voluntary and involuntary — is shocking, with some experts even questioning the platform’s sustainability.
Across the globe, employees are feeling burnt out in record numbers: Nearly 50% of employees and 53% of managers report feeling burnout at work, according to research from Microsoft, which surveyed 20,000 people in 11 countries between July and August of 2022. Bloomberg reports that even industries which boasted highly engaged workers are seeing an increase in “quiet quitting” — in the finance sector, 8% fewer employees are willing to give it their all.
Talks of an economic downturn — or worse yet, a recession — combined with an increase in leaders demanding their employees return to the office is leading to longer hours and a culture of distrust. In Gallup’s State of the Global Workplace report, they assert that broken workplaces don’t need to stay broken: better leadership and an environment that promotes employee engagement is the fix for chronic labor shortages and high attrition.
This report uses the collective wisdom and thought leadership of our Inspirus team to reveal what we see as trending now and our vision of how these trends will impact the future of our industry and our clients’ programs. And, as a part of the multinational Sodexo Group, we’re able to layer in insights that drive quality of life from the prestigious Sodexo Quality of Life Institute.
For example, one thing has become quite clear — traditional HR manuals are a thing of the past. People now come into their jobs with many more expectations: to be supported, to have growth opportunities, to be granted flexibility. HR leaders and C-suite executives must acknowledge that industrial age practices are no longer relevant in today’s world and craft a new playbook that defines the strategic role HR plays in workplace culture and organizational sustainability.
Speaking of sustainability, we’ve heard a lot of chatter about resilience, from both organizational and workforce perspectives. A 4Q 2022 CEO survey indicated that 98% of executives expect a global recession to come in the very near future. And while there is no sure-fire way to predict the next economic cycle, high shipping and fuel costs, a tight job market and rising inflation all point to an economic downturn. This uncertainty is prompting organizations to systematically change and with this emergence of a ‘new normal’ must come a new approach to sustainability.
These are just a tiny fraction of our findings — there are many more in the pages that follow. I hope you find this report holds value for you and your organization.
Chief Executive Officer
Inspirus / Sodexo Benefits and Rewards Services, USA
There is no one way to “do HR” right — but many of the traditional models and practices in the HR scope are quickly becoming outdated, so there are lots of ways to get it wrong. Today’s HR leaders need to be in tune with the needs and expectations of employees and job seekers. In broad strokes, those include the desire to feel supported and included at work, to have access to real career opportunities and to have the flexibility and freedom to fit work into their lives, rather than the other way around. HR leaders and C-suite executives must identify the practices and ideas that are no longer relevant in today’s world and craft a new HR playbook that updates and redefines the strategic role of HR.
Here are a few of the changes we are seeing as the traditional approach to HR evolves to meet the emerging challenges of the modern age.
Employee benefits have been in the headlines for a while now, amplified first during the global health crisis and now with an increased focus on mental health, family benefits and employee engagement. HR leaders need to rethink offerings to personalize benefits to employees’ needs and desires and find ways to offer benefits that enhance their lives.
Some of today’s most attractive benefits include tuition and student loan repayments and expanded healthcare coverage for aging parents. In the realm of “transactional” benefits, some organizations are holding off on increasing medical benefit premiums to help employees with the stress of inflation. Inspirus did this, and employers in various industries are taking a similar approach. But it's in the area of experiential benefits where we’re starting to see the most movement. Savvy organizations are beginning to understand that happy employees are engaged employees and engaged employees are more productive and profitable.
Many HR leaders are asking questions like these: How is the new talent landscape affecting compensation, benefits and workplace norms? What can I do to attract and retain employees in today’s shifting labor market? How can my organization compete for top talent?
Most great managers understand the importance of employee recognition. Putting it into practice can be challenging, though, especially in our new normal of remote and hybrid work. A traditional approach to employee recognition is to praise only what we see and what is out of sight tends to be out of mind. Managers can recognize employees for behaviors they observe or outcomes they appreciate, but that doesn’t always align with what employees want to be recognized for.
To resolve this mismatch, leaders need a new approach. This is what Christopher Littlefield, in this article for Harvard Business Review, calls reflective recognition, “an inquiry-based approach where an individual or group is invited to reflect on and share what they are proud of and why.” By learning what matters most to employees, leaders can ensure they give meaningful recognition, which can lead to better engagement.
In order to attract and retain top talent, many employers are finally coming to grips with the reality that employees are just as productive — and often more — when working from remote locations, compared with those who work exclusively at a company office. According to the 2021 State of Remote Work Report from Owl Labs, 2021 was the year the world stayed remote, and 90% of the 2,050 full-time remote workers surveyed said they were as productive or more productive working remotely, compared to when they toiled in the office. 74% reported that working from home was better for their mental health. Forbes backs up this trend, reporting that 25% of all professional jobs in North America will be remote by the end of 2022 and remote opportunities will continue to increase through 2023. Remote work is here to stay and must be top of mind when filling roles.
Productivity is far from the only consideration in committing to remote and hybrid work. Leaders also need to understand how to keep a remote workforce connected with those still working on-site. Employers that are the most successful at retaining employees know this must happen digitally. The Inspirus Connects employee recognition platform offers a number of tools to facilitate a sense of community among employees, regardless of where they are located. The platform provides a central hub where employees can learn the latest company news, receive and share recognition, celebrate milestones and accomplishments, and connect with team members near and far.
What does it take to get (and keep) employees engaged? The short answer is “it depends” because it varies from one role to the next, from one generation to another, and from one individual to their colleagues. The longer answer requires leaders to get to know employees on a deeper level while paying attention to broader talent trends and attitudes.
“[Compensation] isn’t enough to keep frontline employees,” said McKinsey partner Annie Valkova. “They have more options. If compensation becomes table stakes, employees look for all these additional pieces — like well-being and flexibility — to stay at a job versus go look for a new one.” Smart leaders are investigating those “additional pieces” and finding that many employees now seek personal meaning and purpose in work as well as other parts of their lives. HR leaders and managers must move past a “one size fits all” approach and get to know their people and what drives them in order to keep them happy and loyal. Short-term tactics – the ping pong table, the yummy snacks – are not enough to move the needle. Employees want to be treated as humans, to have a sense of belonging and to follow a vision that mirrors their values.
Employers that provide tools to connect employees digitally, like on the Connects employee engagement platform, create a community where employees feel validated and feel a sense of purpose and belonging. Organizational leaders who are enlightened about what motivates their employees are seeing the lowest turnover rates.
In recent years, the HR function has steadily grown more strategic, evolving beyond its initial focus on a more transactional or administrative role. What we’re seeing now is an even bigger emphasis on strategic thinking across organizations, and with that, an increased need to teach employees the skills needed and provide opportunities to exercise those skills. In doing so, leaders can bolster the health and success of their organization while also developing leaders of the future.
Consider how this type of initiative fits into your organizational culture and structure. You could simply add strategic planning to your skill development programs — or you could take it a step further. Forbes contributor Bill Hall invites leaders to entertain a ‘strategic thinking boot camp’ for teams. We all learn how to flex our physical muscles in fitness boot camps, so why not one to strengthen the brain?
“Quiet quitting” is a new buzzword for a longtime challenge in the employer-employee relationship. Referring to the employees who put no more effort into their jobs than the job description requires, a 2022 Gallup survey suggested that at least half of the U.S. workforce consists of quiet quitters. While some news reports frame “quiet quitting” as an employee-driven trend that employers cannot control, most HR experts agree that “quiet quitting” is a key indicator of low employee engagement and problems with work culture, which leaders can absolutely address.
Before you can do that, you have to define what "quiet quitting" means for your organization and that likely will involve flexibility in some capacity:
For a deeper exploration of "quiet quitting" and how you can improve employee engagement, see trend six: Employee Engagement: It’s Not Just an “HR Thing.
Unhealthy or toxic work culture is at the root of many of today’s talent-related challenges. Savvy leaders are looking at culture holistically and approaching change in a strategic way. This means first getting clear about what kind of culture you want for your organization and taking an honest look at where you’re starting. Among the most desirable cultural components today are: a workplace environment where employees feel they belong, are accepted and valued for who they are, have the resources and support they need to be engaged, feel acknowledged for their contributions and accomplishments, and can access opportunities for career advancement.
Gallup research confirms these priorities, identifying the top three cultural elements linked with employee engagement: a manager who understands and motivates employees, employees having a sense of purpose and the opportunity for growth. These things do not happen by accident and improving culture like this relies on top leadership to develop clear expectations for managers — and then holding them accountable for their impacts on company culture.
A positive, inclusive work culture is the key to keeping employees engaged — but it’s also a driving factor in talent acquisition. A recent survey of nurses by McKinsey found that those who are considering changing positions prioritized these five things: safety at work, work/life balance, caring colleagues, meaningful work, and a flexible work schedule. We’re seeing these same priorities reflected in other roles and industries, so these should be key areas of focus for all leaders.
As long as there are more open jobs than people to fill them, job seekers will drive the talent market, requiring employers to be more creative and flexible. A majority (81%) of recruiters say attracting top talent was challenging in 2022, and this trend is likely to continue for the foreseeable future. This means now is the time to align your HR policies, programs, and perspectives with the things that matter most to today’s job seekers and employees so you can attract and retain top talent.
What does it take to remain viable for decades — even centuries? Resilience. Unfortunately, as we all know, not all companies are resilient. Some learned this the hard way during the pandemic which challenged companies of all kinds to be resilient. Some, however, navigated this worldwide upending event successfully through strong leadership — and resilience.
None of us could have predicted the pandemic. None of us can predict the next catastrophe that will challenge the success of our businesses. What we can do, though, is build a foundation based on a strong culture and strong leadership to help navigate whatever challenges — and leverage whatever opportunities — come our way.
An October 2022 CEO Survey indicated that 98% of executives expected a global recession to come within several months. While there is no sure-fire way to predict the next economic cycle, high shipping and fuel costs, a tight job market and rising inflation all point to an economic downturn. Businesses are operating in a “new normal” and a climate of uncertainty that is prompting them to systematically change and to, at minimum, be able to sustain.
Leaders matter. That point has been driven home quite compellingly in late 2022 as Elon Musk bought and took the helm at Twitter. His new reign has been referred to as “the dark side of emotional intelligence” by Inc. Culture matters.
What does it take to build resilience? These are the trends we’re seeing and some action areas that C-suite executives and HR leaders can take to build more resilient companies.
Rapidly rising costs of labor and talent shortages are challenging companies of all kinds to think differently about talent acquisition — and talent retention. McKinsey research indicates that talent pools in many industries are drying up as employees quit to enter other sectors, go after nontraditional opportunities such as gig-economy work, or leave the workforce altogether.
Shortages of digitally savvy workers are especially acute. In a recent McKinsey survey, nearly 90% of C-suite executives said they don’t have staff with adequate digital skills. As technology impacts virtually every aspect of business interactions these days and fuels innovation and efficiencies, these skills are a must-have for ensuring resiliency.
In this climate, we also are seeing leading companies strengthening their workforce by adding recognition and career development to their playbooks. They recognize the critical value of people — even in a technologically driven business environment.
George Floyd’s murder in 2020 and the resulting and continuing social and political unrest that followed, brought the importance of diversity, equity, and inclusion (DEI) to the forefront of business conversations everywhere.
Academic research indicates that organizations with diverse workforces are more resilient and attribute that to more innovation, a wider range of perspectives and viewpoints and a broader set of tools to apply to problems. Our findings support that organizations that are resilient foster a workplace where everyone feels included and performs at their best. These companies seek out the best talent and then develop these individuals equitably by upskilling and reskilling. Succession planning reinforces their long-term commitment to promoting diversity.
Resilient companies achieve that resilience through the power — and diversity — of people. Employers should consider how they can build and leverage the diversity of their employees and leadership bench to drive resilience. Diverse opinions drive excellence.
The pandemic has taught businesses a lot about how to navigate uncertainty — and challenged many assumptions that had been held for years. Assumptions like: work needs to be performed by workers who are physically on-site, or that college degrees are a “must have” for most roles.
Today we’re seeing some organizations changing their requirements for education and relevant experience and hiring people from unconventional backgrounds — from other industries, adjacent majors, overlooked colleges and universities — who are ready and willing to learn.
Also trending is how businesses are streamlining their hiring processes to improve the employee experience, which starts during the hiring process. You only get one chance to give a first impression! Hiring and onboarding lay the foundation for what will hopefully be a long and fruitful relationship — one that contributes to organizational resilience.
Another trend that we’re seeing is companies recognizing and focusing on improving employees’ emotional experiences on the job — including wellness — as critical to retention rates.
Some continue to struggle, though, with adequately engaging employees to keep them healthy, productive and on board.
McKinsey's survey of managers and employees indicate that employers often fail to understand just why workers quit. Employers tend to overrate “transactional” factors such as pay and development and underrate the “relational” elements — a feeling of being valued by managers and the organization, the companionship of trusting teammates, a sense of belonging, a flexible work schedule — that employees say matter most.
Understanding what employees need to thrive is the key to keeping them happy (and loyal) and was an impetus for our partnership with The Happiness Index. Our Inspirus Connects employee engagement technology platform now offers a full suite of diagnostic tools directly within the platform. Each pre-built anonymous survey uses neuroscience methodology to provide a unique, holistic view of an organization’s cultural health. Since positive cultural health directly impacts employee retention, morale and business success, measuring employee feedback gives organizations the data they need to deliver more effective employee engagement strategies and build the thriving workplace culture that fuels business success and drives resiliency.
Without vision there is no resiliency. Vision is what drives companies forward — it’s what drives breakthrough thinking, new ideas and actions aligned with desired direction.
McKinsey research shows that the CEO plays a pivotal role in setting a clear direction, aligning the organization, managing stakeholders and serving as “motivator in chief.” The best CEOs act boldly, employ active listening and empower employees. They’re able to get the most out of their teams, today and every day. They lead boldly and rally employees behind the future they clearly see. For more how the C-suite can drive employee engagement, download our eBook: Employee Engagement for C-Suite Executives: 9 Transformational Insights.
Direct managers may have been the primary motivators for employees in the past. Today, though, we’re seeing employees looking all the way up the ladder for motivation and inspiration.
The ability of business leaders to look beyond just solving current challenges, to anticipate when the storm will clear and convey that long-term vision and purpose to employees (so they can align and support) is key to transformational change and resilience. Leaders that build for resilience talk about “purpose-driven growth” — a concerted focus on critical leadership values, behaviors and commitments.
The core principles of disciplined value creation — knowing an asset’s intrinsic value, understanding a company’s competitive advantage and not fearing to take bold steps — will continue to hold true in 2023.
The “Great Resignation” has made every organization understand the need to value its employees as an asset, and that without them, they have nothing. Their employees’ skills, abilities, knowledge and experience are intangible but invaluable assets that play a critical role in the organization's success or failure.
Companies that continually focus on their employees will have a competitive advantage and outperform companies that don’t. They’ll remain resilient regardless of what new challenges or barriers they may face. They will thrive in 2023 and beyond by developing programs and policies that are centered around creating an environment that is agile and a workforce that is high-performing and equipped for change.
Now is the time to make investments in initiatives that will both support employees and drive business outcomes. That’s how we get to resilience.
Ignore your employees and they’ll go away. Just ask Elon Musk whose heavy-handed leadership as he took the helm at Twitter resulted in a mass exodus of employees — and not just the ones he asked to leave.
If you haven’t asked your employees what’s important to them lately, now is the time. We see a critical need for organizations to develop ongoing processes for gathering — and acting on — employee feedback.
It’s no longer simply a “nice to do” — if it ever was — it’s now a need to do. Employee feedback can help effectively shape HR strategy to drive engagement and retention.
Data holds the key to driving the kind of business decisions needed to excel in an increasingly ambiguous and ever changing business environment. Accurately collecting data and using the intel gathered to identify actionable steps to make needed improvements can fuel retention, representing the difference between building a successful and sustainable business and mediocrity.
That’s not just a business cliche. It’s backed by research: companies that seek and act on feedback from their employees see engagement rates of 80% — compared to 40% when they fail to do this. Gallup reports that engaged employees are 18% more productive and that organizations with engaged employees are 23% more profitable.
Here are the trends we’re seeing in the industry right now among best-in-class companies that are committed to using employee feedback to shape their HR strategy.
In the past, collecting feedback from employees was often a long and painful annual process. The once-a-year annual employee satisfaction (or, renamed in recent years, the employee engagement) survey was manually administered and managed. And highly ineffective. Why?
So, even those organizations committed to taking action based on this annual feedback were subject to the high potential that the actions taken really had no relevance in the current environment. In fact, 34% of employees say that their managers don’t listen when they voice their opinions and point to this as a key factor in making the decision to leave their jobs.
A better approach and a trend we saw in the latter part of 2022: collecting employee feedback in real time. If you want to know what’s wrong in your organization, go right to the source — your people. Give them a voice to provide honest feedback and you’ll be able to keep your finger on the pulse of culture in real time, as it happens. But it is critical to do so anonymously, so there is no fear of repercussions for anything shared.
Connects, Inspirus’ employee engagement platform, integrates Employee Voice right into the technology. Leaders can get real-time feedback from employees 24/7, so they can address concerns before they become major issues and adjust their people strategy on the fly.
Sage polled 500 HR and C-suite leaders from high-growth sectors across the globe, and 59% of them didn’t feel HR was playing a leading role across business priorities. Only 40% of C-suite leaders said their organization used HR data to make business decisions. When leaders are presented with data, but don’t understand the entire landscape or context, interpreting it can be a challenge.
Among best-in-class organizations, we’re seeing a trend in capturing data points from the different stages of the employee journey and leveraging those metrics to power business decisions.
What separates the leaders from the laggards? What we’re seeing is a combined employee engagement strategy that focuses on both employee engagement and employee happiness to improve communication with their employees:
When neuroscience methodology is used, measurement of how your people are thinking and feeling becomes objective and quite useful. Inspirus is a trailblazer in this area, with our partnership with The Happiness Index.
Typical employee engagement models fail to reflect the entirety of the workplace culture because they don’t measure the entire landscape. It’s more important than ever to evaluate the employee experience holistically.
We recommend starting with a baseline survey to assess the cultural health of your company and then using those results to see what’s going on in every corner of your organization and in every critical area of impact — from diversity, to wellness, to values, organizational change, culture and more.
Once you discover where your cultural strengths and weaknesses lie, you can set out to specifically craft initiatives to enhance those strengths and improve the areas of weakness.
When you understand what makes employees happy and engaged — what drives them — you can make the right adjustments that not only improve your cultural health but send signals to your employees that you hear them and are open to taking action.
One solution our clients love: the cultural assessment survey integrated within Connects, in tandem with human insight partner The Happiness Index. It is administered anonymously, boosting the odds that employees will participate and be truthful, without fear of repercussions.
Finally, did you know that there is one very simple thing you can do for your employees that will boost engagement as well as their likelihood of continuing to provide feedback regularly? Share survey results with them. That has been shown to increase participation rates for future surveys. And it’s a very tangible way to show them you heard them and you’re committed to improvement.
Inclusion, transparency, action, and accountability — that’s what it will take to shape HR strategy in 2023 and beyond. We encourage you to commit to taking a more broad, encompassing, and ongoing approach to employee feedback. It will make a difference.