UKG, a leading provider of HR, payroll, and workforce management solutions for all people, today announced its 2023 HR Megatrends that will emerge in the year ahead.

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2023 HR Megatrends from UKG (Graphic: Business Wire)

Annually, an international team of UKG HR evangelists, thought leaders, and social scientists partner to reflect on the previous year’s developments in the world of work, evaluate the implications for organizations and HR teams, and aim to predict how these forces will shape the industry in the year ahead. UKG has identified three HR Megatrends set to impact organizations on a global scale in 2023: navigating the human energy crisis, optimizing organizational plasticity, and the Gen X leadership effect.

Below is a preview of the 2023 Megatrends. The full report — complete with additional research, detail, and suggestions for how leaders and organizations can manage the trends — can be found here.

Navigating the Human Energy Crisis

Mental health and wellness are now centerstage, due in part to the effects of the global pandemic, as well as social and economic instability around the world. Many people are feeling overwhelmed. Negative news cycles headlining economic uncertainty, climate change, violence, and political unrest have contributed to a spike in mental health issues. Employee wellbeing research from Great Place to Work^® shows that only 30% of employees globally say they are “very optimistic” about their future. Organizations must watch this emerging human energy crisis because it can affect workplace culture, retention, performance, and innovation. While many of these stressors are outside of an employer’s control, leaders and people managers can make meaningful impact within the employee experience and life-work journey by:

• Providing basic employee needs such as a livable wage, affordable healthcare, and retirement and pensions support.
• Addressing burnout with flexible work schedules, urging to take paid time-off, and focusing on work that really matters to the business to create reasonable workloads and deadlines.
• Recognizing and celebrating employee success and empowering them with decision-making autonomy.
• Supporting purposeful work by connecting employees to the ‘why’ behind their role and providing career growth with training and enrichment programs.
• Investing in life-work technology that supports employees on their personal life-work journeys.

“This human energy crisis will require more than virtual happy hours and free yoga classes,” said Dr. Jarik Conrad, vice president of human insights and HCM advisory at UKG. “Many workers today realize that there are more important things in life than work, and leaders must recognize an employee’s continuum of needs and meet them where they are in thoughtful and meaningful ways. Employers have an opportunity to meet the expectations of the modern workforce with personal and technological improvements.”

Optimizing Organizational Plasticity

The global pandemic has shown that the most successful organizations not only survive during unexpected challenges, but thrive and emerge stronger by focusing on their people. Challenging times can be incredible opportunities for both people and organizations to adapt by adopting a growth mindset to move forward rather than reflexively falling back into pre-pandemic patterns and behaviors. In the year ahead, organizations must practice plasticity — a combination of flexibility and adaptability to make internal processes and networks malleable and open to change. This will allow businesses to approach unpredictable events with resilience and responsiveness by:

• Strengthening people and culture networks with further investment even in times of economic uncertainty — because companies that invest in their people during a recession outperform others by as much as 400%.
• Doubling down on diversity, equity, inclusion, and belonging (DEI&B) to bolster talent acquisition and foster innovation in all areas of the organization. During the 2007-2009 recession, companies with the most inclusive cultures grew by 14.4%, as others declined, and saw a 28% reduction in employee turnover.
• Practicing strategic workforce management by adapting scenario planning to prepare for any situation, building a skills inventory to best leverage and empower employees, and creating employment programs to source a wide range of talent across full-time, part-time, gig, and seasonal workers.

The Gen X Leadership Effect

Gen Xers are leading companies differently than Baby Boomers, whether it’s because the world is different, their values are different, or both. Many were raised by working mothers, came of age during the climate crisis, and are currently parenting Gen Zers. As Gen X takes over the C-suite and gains footing on corporate and philanthropic boards, they are prioritizing environmental, social, and governance (ESG) and DEI&B investments as business imperatives. The impact of Gen Xers has become more pronounced and will continue to support the future of work by:

• Building more diverse boards with respect to age, gender, and race, and enhancing value by championing opportunity for underrepresented groups to be “culture adds” vs. “culture fits”—i.e., adding diversity to your teams in the form of different personalities, backgrounds, abilities, and skills.
• Prioritizing ESG efforts to build customer and employee trust, reduce risk, and create value over the long-term in ways that benefit shareholders, employees, customers and communities alike.
• Conducting leadership and succession planning through the lens of holistic talent management, including traditional attributes like technical and industry experience as well as considering an individual's reputation in the community and their influence via mentoring and coaching.

Dr. Conrad concluded, “Organizations have an incredible opportunity in 2023 to learn from world events and continue the positive momentum of both basic and sophisticated employee offerings to improve work for all people, regardless of level or job type. In the year ahead, leaders and HR teams alike must care for their people to navigate the human energy crisis, create and maintain organizational plasticity to thrive during ever-present change, and advance efforts toward a more diverse and equitable world of work for all.”

Supporting Resources

• Learn more about UKG and why our purpose is people.
• Join UKG in making pay equity a priority. Read more about the UKG Close the Gap Initiative.
• View the UKG Environmental, Social, Governance (ESG) Report to learn more about how UKG is making a difference for its employees, customers, community, and environment.
• Follow UKG on Facebook, Instagram, LinkedIn, Twitter, and YouTube.

About UKG

At UKG, our purpose is people. As strong believers in the power of culture and belonging as the secret to success, we champion great workplaces and build lifelong partnerships with our customers to show what’s possible when businesses invest in their people. Born from a historic merger that created one of the world’s leading HCM cloud companies, our Life-work Technology approach to HR, payroll, and workforce management solutions for all people helps more than 70,000 organizations around the globe and across every industry anticipate and adapt to their employees’ needs beyond just work. To learn more, visit ukg.com.

Copyright 2022 UKG Inc. All rights reserved. For a full list of UKG trademarks, please visit ukg.com/trademarks. All other trademarks, if any, are property of their respective owners. All specifications are subject to change.

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