“Buckle up, 2023 is right around the corner and labor industry experts are looking ahead at how the workplace landscape will continue to evolve now that the needs and wants of employers and employees have shifted over the past three years. Some experts predict things will be worse in 2023 than the 2008-2009 recession . . . by a long shot. Although 2022 was a double-edged sword, it brought leaders ample hardships, but also important lessons for the future. There’s no doubt 2023 will throw us curve balls, so it’s important for leaders to stay one step ahead of what’s to come to prepare for business challenges. What will transform the workplace in the New Year?

Managing Through Economic Uncertainty

Tim Harsch, CEO and co-founder of Owler, told me the biggest challenge for leaders in 2023 will be managing through economic uncertainty and increasing team productivity without burning teams out. “This is going to take clear, honest communication throughout the organization and the setting of quality Key Performance Indicators (KPIs) that everyone buys into within teams,” he said.

In response to the question of “What will be the alliterative terms of 2023 and why?” Joe Du Bey, co-founder and CEO of Eden, says that in 2023 role retention and cost cutting will replace 2022’s terms quiet quitting and productivity paranoia. “With a likely impending recession and layoffs increasing in number, I think the employee concern moves to keeping one’s job and company focus switches to reducing cost. So maybe ‘role retention’ and ‘cost cutting’.”

David Hassell, CEO and Co-Founder of 15Five, agrees that business leaders will have to rise to stand certain in the face of uncertainty in 2023. When business leaders rise to the occasion and lead through uncertainties, they ultimately create a positive workplace for their employees to thrive, Hassell told me, predicting that businesses will double down on leadership and management training and that the standardization of the 9-to-5 workplace is gone, adding, “Creating a stable workplace that anchors employee confidence and loyalty is vital. This is especially important in a remote or hybrid work setting. Employees who feel a sense of stability, support from leadership, a sense of purpose in their work, and connection to others—all of which leadership must drive—will be less likely to disengage or ‘quiet quit’ next year.”

Managing Onsite, Remote and Hybrid Work Situations

Du Bey shared the emerging issues he thought will have the greatest impact on the workplace in 2023 and how companies can prepare. “As companies and employees no longer are materially concerned about Covid, I think the office return conversation will boil down to preferences, both the employee’s and the company’s. As cost cutting intensifies, I suspect the narrative will change quite a bit in 2023. We will probably see employees want to come into the office more to build internal rapport and be more visible, while we see companies reduce their office footprint to cut costs. In general, I think we should expect to see the pendulum swing back to the employer in terms of determining the office attendance policy. That said, I do not see a reversion back to pre-Covid working styles—flexibility is here to stay.”

He also believes remote and hybrid work will remain the norm in 2023.”Flexibility is now the new norm and preference for 95% of employees, and those employees often include senior management team members,” he explains. “However, companies need the right internal processes and tools to ensure that their switch to hybrid is effective. From a process perspective, this includes establishing an asynchronous writing culture so that employees can stay up-to-speed regardless of their time zone or location. From a tools standpoint, companies also need to implement best-of-breed software for all core needs, from video conferencing to desk booking.”

Creating Psychological Wellness

According to Chad Severson, CEO of Ergotron, it is imperative in today’s job market that business leaders commit to the mental and physical well-being of employees. “As employees continue to take stock of their current careers amidst an unstable workforce and economy, business leaders need to place workplace wellness benefits at the top of their 2023 employee offerings.”

Jennie Yang, vice president of people & culture at 15Five, agrees. She says leaders need to consider the competencies they wish to see in their managers and employees, such as resilience, self-direction and adapting to ambiguity. “In order to survive a recession, psychological safety for employees is going to be critical next year, so leaders in particular will require skills for handling internal communications,” she said, adding that healing from trauma of toxic workplaces and honing soft skills to manage hard economic times is imperative. “Key skills to focus on include strong mental and emotional well-being and being able to relate to others.”

Industry Wide Predictions

Alex Zekoff, CEO and co-founder of Thoughtful, makes these predictions for 2023:

1. More industry shake ups. The most disrupting companies are being built or started in 2023 and will continue to make a big splash for years to come.
2. Goodbye “woke-ism.” Being “woke” is out in 2023. People want to address real problems as it pertains to war, food production climate, etc.
3. New hybrid standard. The days of being fully remote are coming to a close. The new standard will shift to a hybrid model of being in-office/in-person at least three days a week.
4. Continued layoffs. There are going to be continued layoffs and workforce reductions specifically in back office, non-revenue generating jobs.
5. Increased competition for promotions and salary increases. Having to increase profits means employers will be radically focused on productivity and value. With layoffs occurring, the best employees will remain, and there will be fewer slots for promotions and subsequent pay raises.
6. KPI and objective tracking by employee. With the hybrid work model and increasing expectations for profits also comes more monitoring and KPI ownership for employees. Companies that build software that can track productivity and measure KPIs precisely will win over companies that aren’t measuring performance at that granular of a level.

“Despite wider economic wobbles, the number of people in work is growing and fewer people are quitting,” according to James Neave, head of data science at Adzuna. “For employers, hiring qualified talent has been a challenge in 2022 following the Great Resignation and amid the ongoing worker shortage,” he continued. “However, with economic concerns plaguing business leaders as they plan for 2023, employees should be aware that demand for labor is cooling and companies will no longer be as desperate to fill staffing gaps next year. As major retailers, food delivery platforms and media companies are announcing layoffs, job seekers should be heartened that sectors like Healthcare and Nursing and Retail are still making significant hires.”

Neave added that despite shaky numbers and headlines about a recession, the job market has remained durable overall. “Employers that want to win and keep top talent next year should be considering being more transparent about pay as they continue with planning for 2023,” He concluded. “Today’s job candidates care about DEI and equitable workplaces, and employers that are sharing pay ranges during hiring are showing high quality candidates that they have nothing to hide.”