For the past decade, I’ve published my forecast of the top 10 workplace trends that will impact how we work and live for the upcoming year. The purpose is to help businesses prepare for the future and equip workplace professionals with the insights they need to drive their organizations forward. You can read my predictions from the past 10 years — 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, and 2022 — which have been read by over one million people worldwide.
These trends are based on dozens of conversations with CEOs, HR leaders, and other workplace professionals. They’re also informed by surveys of over 15,000 employees, 6,000 C-suite executives, and 5,000 HR leaders that my firm, Workplace Intelligence, conducted this year in partnership with companies across the globe. Lastly, I look to secondary research synthesized from hundreds of different sources, including consulting firms, think tanks, non-profits, universities, the government, and trade associations.
So what will the world of work look like in 2023? Although concerns about COVID-19 have lessened, leaders will face new challenges as they navigate labor shortages, ongoing inflation, and slow economic growth. For 2023, Goldman Sachs has cut its forecast for annual U.S. GDP growth to 1.1% from a prior estimate of 1.5%. This comes after the group recently increased its predictions for Federal Reserve interest rate hikes. “This higher rate path combined with recent tightening in financial conditions implies a somewhat worse outlook for growth and employment next year,” the economists said.
Things aren’t much better globally, with Russia’s invasion of Ukraine and the lingering effects of the pandemic playing a role in the bleak outlook. The IMF forecasts that global growth will slow to 2.7% in 2023, the weakest it’s been since 2001 except for the global financial crisis and the acute phase of the pandemic. And although global inflation is forecast to decline from 8.8% in 2022 to 6.5% in 2023, in many economies this number is still higher than it’s been in decades. “The worst is yet to come, and for many people 2023 will feel like a recession,” the IMF’s report reads.
The increasing likelihood of a recession means that despite strong hiring and historically low unemployment rates over the past few months, the labor market is likely to deteriorate next year. In fact, Federal Reserve officials expect the unemployment rate to jump to 4.4% in 2023, up from 3.7% in October 2022. Besides an increase in the unemployment rate, about 900,000 jobs could be lost in the first half of 2023, according to The Conference Board’s labor market projections. The Board also predicts that overall labor force participation will decline.
But things won’t be all doom and gloom next year in the world of work. For most companies, there will be a strong imperative to hold on their top talent in order to weather the storm that lies ahead. That means they’ll continue making improvements to their work experience, benefits package, and other elements of the employee value proposition, all of which will have a real impact on people’s well-being and quality of life. Workers themselves will also be highly motivated to take charge of their health, their finances, and their career trajectory in 2023.
The top 10 workplace trends for 2023 include:
Trend #1: Inflation and an impending recession will force workers and businesses to take action
In 2023, both workers and companies will be deeply affected by inflation and the rising costs of living and doing business. In fact, 90% of executives are concerned about the current macroeconomic conditions, and many are already taking action to drive growth, cut costs, and mitigate risks. This includes building protective measures into supply chains to deal with shortages and rising logistical costs. Some companies may even encourage more of their staff to work remotely, which can save up to $10,600 per employee annually.
Businesses are also slashing their workforce as a way to cuts costs, despite the ongoing labor shortage. PwC finds that more than 8 of 10 CHROs said they’re cutting jobs, freezing hiring, or employing other tactics to reduce staff. At the same time, pay budgets are expected to rise 4.1% — a 20-year high — to keep up with inflation, and so companies can ensure that their most talented team members don’t jump ship for a better opportunity elsewhere.
But the reality is that this won’t keep up with inflation, and that’s why among workers, boosting their income will be a top priority. One study found that 57% of employees want more overtime or extra shifts at their current job, 37% are looking for a job with a higher salary, and 38% have looked for a second job. Meanwhile, nearly 1 out of 3 workers have cut their expenses (or plan to do so) by moving to an area with a lower cost of living.
Trend #2: Career mobility and upskilling will be top priorities for employees
LinkedIn’s 2022 Global Talent Trends report reveals that upskilling and opportunities to grow at their current company are two of the top priorities for today’s workers, coming in only behind compensation, work-life balance, and flexibility. This is partly due to the pandemic, and also the result of shifting job requirements and an uncertain job market, all of which have left people feeling unprepared for their next career move and desperately in need of more support.
In fact, new research from my company and Amazon reveals that 58% of employees are afraid that their skills have gone stale since the onset of the pandemic and 70% feel unprepared for the future of work. Moving into 2023, however, workers are laser-focused on remedying this situation: 89% said they’re motivated to improve their skills this year and 88% are already putting a significant amount of time and effort toward this.
But people need more support from their employers — around 2 out of 3 workers said it’s likely they’ll leave their company this year because there aren’t enough opportunities for skills development or career advancement, or because there’s no way for them to transition to a different job or a new career path. For 2023, this presents a compelling opportunity for businesses to retain their current workforce and attract new talent by offering better learning & development programs.
Trend #3: Employers will enhance their benefits to give workers a financial boost
Given the ongoing labor shortage, it’s no surprise 70% of large employers are planning benefit enhancements for 2023. One thing we’re sure to see is an increased expectation for employers to help people with their financial situation. This includes offering more affordable benefits as well as providing tools and programs designed to bolster employees’ financial well-being.
For example, 75% of companies offer (or plan to offer) tuition reimbursement. Companies like Amazon are leading the charge by covering tuition even for workers who have been at the company for only three months. Improving healthcare affordability will also be a key focus area — 41% of businesses have a low- or no-deductible health plan in place (and 11% are considering it), while others are offering virtual care solutions as a way to improve access and cut costs.
In 2023, employers will also do more to directly support their employees’ financial well-being, in part because workers’ financial stress is affecting their productivity. In fact, research from my company and SoFi found that on average, people are spending over 9 hours a week at work dealing with their financial issues. But while workers expect their companies to improve traditional benefits (e.g., retirement matching), they’re also looking for new offerings like an emergency savings fund, homeownership assistance, or even being paid in cryptocurrency.
Trend #4: Companies will continue to ramp up their mental health support
While employers have significantly improved their mental well-being support over the past few years, it’s clear there’s still a long way to go. According to the APA, 59% of employees have experienced negative impacts of work-related stress in the past month, and 81% say that employers’ support for mental health will be an important consideration when they look for work in the future.
The situation is so critical that just last month, the U.S. Surgeon General released a new Framework for Mental Health & Well-Being in the Workplace, citing reports of “quiet quitting,” the Great Resignation, and the changing the nature of work. The framework is a call to action for employers, and it’s also part of President Biden’s strategy to transform mental health services for all Americans.
Fortunately, in 2023 most employers will continue to strive for a more supportive work environment (e.g., by offering greater flexibility), and many plan to expand their mental health coverage. Leaders are stepping up their support in part because they’ve realized that they’re not immune to mental health struggles either. In fact, research from my company and Deloitte discovered that nearly 70% of executives are seriously considering quitting for a job that better supports their well-being.
Trend #5: Businesses will focus on optimizing hybrid and remote work models
Several years after the COVID-19 pandemic ushered in a new era of remote work, many companies (and their employees) have now settled into hybrid or fully remote work arrangements. Among all full-time workers, it’s estimated that around 15% are fully remote, 30% are in a hybrid arrangement, and the remaining 55% are fully on-site. Notably, among workers who are able to work remotely, the hybrid model dominates.
Although the shift to remote work has largely been beneficial, dispersed team members have faced new challenges. Research from my company and Airspeed found that at least 1 out of 3 remote workers feels lonely, disconnected, or isolated, and most people don’t feel that their co-workers care about them. The situation is so dire that 2 out of 3 executives believe their employees may quit for a job at another company where they’d feel more connected.
Going into 2023, It's critical that employers address this issue, since a lack a connection has also been shown to affect motivation, productivity, and creativity. We’re likely to see many companies take advantage of the abundance of technologies that have entered the market specifically to support remote and hybrid workforces — from virtual office tools and solutions designed to optimize hybrid offices, to platforms designed to help employees socialize and develop stronger relationships.
Trend #6: Workers will persist in their fight for greater flexibility
Going hand-in-hand with the previous trend, in 2023 we’ll also see workers continue to demand greater flexibility, especially the ability to work remotely. LinkedIn’s 2022 Global Talent Trends reports that flexibility remains a top priority for workers, even as employers are by and large reducing their remote job postings. In fact, in September of this year, remote-job posts fell to 14% of all posts, but still got 52% of all U.S. applications.
We’ve also seen that some companies, most notably those in the financial services sector, are moving full speed ahead with their return-to-office plans, citing their in-person culture and the need for young workers to interact with their colleagues. However, a recent survey found that two-thirds of workers said they would quit if required to return to the office full time. A remarkable 40% said they’d consider quitting even if they were asked to come into the office only one day per week.
With an impending recession, it may be tempting to demand that workers return to the office in 2023 as a way to boost their productivity. However, employers should recognize that multiple studies have confirmed that employees are just as effective working remotely as they are in-person. And given how likely people are to quit if their remote work benefits are taken away from them, I believe companies should reconsider their remote work strategies if they want to stay ahead in the war for talent next year.
Trend #7: The ongoing talent shortage will dominate business decision-making
Speaking of the war for talent, the most recent data shows that there are 10.7 million job openings in the U.S and 1.7 jobs available for every unemployed worker. And this isn’t just a concern in the U.S. — right now there are over 6 million job openings in Europe, 470,900 vacancies in Australia, and over 1 million openings in Canada. Countries in Asia are also grappling with the labor shortage, with millions of employees quitting in search of more meaningful work and better pay.
This high ratio of job openings to applicants means that despite a potential recession, some companies may choose to hold on to their current workforce rather than laying people off, a practice known as labor hoarding. For many workers, it’s a sign that they still have the upper hand in the job market, and they may not need to worry about layoffs as much as they thought they would. Some job applicants are even choosing to “ghost” potential employers because they have so many job options available to them.
Faced with this challenging dynamic, employers will need to reconsider their workforce retention strategies or they could find themselves facing an even worse talent shortage. That’s partly because today’s employees are much more willing to change jobs if they’re dissatisfied; for example, my company’s study with Airspeed found that 62% would take another job for only a $1,000 sign-on bonus. Businesses should focus not only improving compensation, but also on creating more meaningful work experiences and driving holistic employee well-being.
Trend #8: Automation and AI will enter the workplace in new ways
According to the Association for Advancing Automation, robot sales hit a record high in North America for the third straight quarter in 2022. This trend is all but certain to continue next year as companies face a tight labor market, high compensation costs, and an impending recession. In fact, 77% of businesses say they’ll increase their automation budgets for 2023, and one-quarter will increase their budgets by at least 25%.
But while most robot sales in 2022 came from the automotive or food & consumer goods industries, in 2023 we’ll see companies investing in these technologies for new areas of the business — including their white-collar offices. An article from Bloomberg highlights how many of the latest technologies can now perform traditionally “human” tasks like speech recognition, as well as information-gathering, organizational, and calculation tasks.
This could be bad news for some occupations, but in most cases these technologies are designed to support workers and eliminate some of their repetitive tasks — not replace their jobs entirely. For example, in call centers an AI chatbot could be used to gather basic customer information before passing on the call to a human agent. And replacing some agents with AI chatbots could save the call center industry $80 billion in labor costs each year.
Trend #9: Web 3.0 technologies will transform all aspects of people’s lives
In 2023, we’ll see a growing number of companies invest in Web 3.0 technologies to enhance and modernize their workplaces. While Web 2.0 revolutionized how we interact with each other online, Web 3.0 is a paradigm shift from a centralized Internet to a decentralized virtual world underpinned by blockchain technology. Innovative technologies from NFTs (digital assets) to blockchain (digital verification) to metaverses (virtual worlds) are already changing how we work and live, and it’s only the beginning.
Earlier this year, I spoke with four executives from IBM, Meta, WebEx, and PwC to hear their perspectives around this timely topic. Central to my discussion with them was the idea that Web 3.0 technologies, for example virtual reality (AR) and augmented reality (AR), will increasingly be used to create a more inclusive environment for workers, regardless of their physical location. These technologies will also provide a more personalized, enriched, and productive workplace.
Employees will benefit from Web 3.0 technologies in other ways as well. In my company’s study with SoFi, we found that 42% of employees would like the option to receive performance rewards in the form of NFTs, and 36% are interested in being paid in cryptocurrency. There are so many applications of Work 3.0 that haven’t been conceived yet, but leaders I’ve connected with are already experimenting and piloting their solutions as we speak.
Trend #10: Pay transparency will become the new normal
For years, employees have lamented the lack of transparency around their salaries. Whether a worker wants to know how they stack up within their own company or if they’re looking for a job somewhere else, it can be nearly impossible to determine the pay rate for a role. Furthermore, all of the secrecy around salaries has only allowed longstanding gender and racial pay gaps to continue to widen.
But the ball is already rolling for this to change, and in 2023 we’ll see it gather even more momentum. Many states in the U.S. have pay transparency requirements, and New York recently joined this list at the beginning of November. And the U.S. isn’t the only place where progress is happening — for example, the EU Pay Transparency Directive will come into force in 2024, although some EU countries already have their own laws around this.
The transition to greater pay transparency certainly won’t be easy for employers. Some may need to adjust the salaries of their current staff so that everyone feels they’re being paid fairly. But the end goal of this shift — more equitable pay — will certainly be worth the effort. Employers should also remember that being transparent about pay can help boost retention and it can even increase worker productivity by around 10%.
Thanks for reading — be sure to join the conversation on LinkedIn and let me know your thoughts on the 2023 trends!