Three HCM Trends You Can’t Afford to Ignore in 2023
Businesses are experiencing a perfect storm. Strengthening economic headwinds, geo-political unrest, the cost-of-living crisis, the skills shortage and sustainability are just some of the factors forcing organisations to pivot fast to pre-empt threats.
HCM (human capital management) is in the crosshairs of this change. Your workforce, how and where your people work, and the skills you need to thrive are shifting at an accelerated pace.
The emphasis is tilting toward smarter decisions and employee engagement. Now more than ever, HR must work harder to streamline processes, empower workers, collaborate across the organisation and align teams with strategic business initiatives.
It’s easy for HR professionals to sit on their hands and forget about the future. After all, everyday core HR tasks take precedence and there’s precious little time for strategic ‘over the horizon’ thinking.
A new world demands new rules. In this article, we explore three key HCM trends likely to shape the future of work. From the growing adoption of artificial intelligence (AI) to the increasing importance of skills development and retention, these trends will have a major impact on HR strategy and practice in the coming years.
Trend 1: Predicting tomorrow’s skills with AI
If you’ve curated music playlists or clicked on ‘you might like this’ online shopping recommendations, you’ll know that AI breaks down vast volumes of big data into personalised insights. It also starting to make its mark in HR. In 2023, we foresee a significant increase in the use of AI to predict the next wave of skills needed to drive the business forward.
AI can be used to analyse a variety of data sources, including job postings, training materials and employee skills profiles, to identify the skills that are in demand and likely to be important in the future.
- AI can help the automotive industry match needed skills in battery technology to people, learning content and job roles.
- It can help petrochemical organisations surface the skills that exist in-house to develop new sustainable energy solutions and identify which skills need to be acquired externally.
- And it can help HR professionals in financial services find the skills suited to sustainable finance, cryptocurrency and similar emerging business opportunities.
The HR thought leader Josh Bersin of The Josh Bersin Company agrees by saying “Companies need AI-powered, skills-based systems that help with recruiting, internal mobility, mentoring, job assignments, and eventually rewards, recognition, and pay. Organisations doing this well can outperform their competitors simply through their intelligence and agility."
Trend 2: Tighter Alignment Between HR Strategy and Reality on the Ground
As the market undergoes transformative trends, such as disruptive innovation and the cost-of-living crisis, HR and business leaders need to work collaboratively to ensure a coordinated response. However, Skills Confidence Gap research by Cornerstone reveals a widening chasm between employers delivering skills to employees and employees’ confidence in their company’s ability to develop their skills.
During 2023, we therefore anticipate tighter alignment between HR strategy and peoples’ experience on the ground. To build a future ready workforce, HR leaders will increasingly take a skills-forward approach to learning and talent — identifying what skill gaps exist, which skills you need and a relevant, engaging path for your people to build those skills effectively.
Trend 3: Retention Programs Better Matched to Expectations
Free pizza on a Friday no longer cuts it. Today’s employees, especially millennials, are hungry for more from their employers. Much more. They want empowered career development, real-time performance feedback, and continuous lifelong learning.
The EMEA trend in 2023 will be for an even greater emphasis on employee retention. 2022 research by Fosway Group reveals that employee experience is now the top lever for HR’s future success (96% cite as important), closely followed by employer brand and values (95%). Only 17% describe their employee experience as ‘irresistible.’
The Skills Confidence Gap research by Cornerstone underscores these recommendations. High Performing Organisations (scoring high on employee development, diversity, inclusion and other factors) have the greatest success with employee retention.
Next steps: Empower employees with the right skills
As HR professionals, it’s important to stay in front of the latest people and workplace trends. By understanding more about the growing adoption of AI, the increasing importance of skills development and retention and the changing expectations of employees, HR leaders can position themselves and their organisations for success in the future of work.
Now is the time for action: consider implementing a training and development program that focuses on empowering your employees with the skills they need to thrive in the future.
All of this is covered in depth in the new Cornerstone EMEA Trends Report for 2023. Offering rigorous, in-depth insight into the people and workplace trends shaping the future, the report is an indispensable way for forward-thinking organisations to prepare for what’s over the horizon.
You can read the full Cornerstone EMEA Trends Report 2023 “People and workplace trends for the year ahead” here.
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