HR function women working with colleagues

The role of an HR department has never been more important as businesses shift to accommodate the growing requests from their employees and stand out from their competitors. In the past, HR was seen as a back-office function, such as payroll and benefits administration, but today it is rapidly evolving into a strategic role that sets the course for how a company runs.

Driving recruitment and staff retention efforts, enabling new initiatives to deliver sustained value, and helping hire talent that will foster effective collaboration in an ever-changing business world are just a few of the roles your HR department will be responsible for. In order to navigate through these shifting trends and conditions, businesses need to be proactive by investing in and working with their HR function.

In this blog post, our experts will share why mastering the HR function is so critical for any modern business operating in 2023 and how focusing on certain strategic areas can set you up for success.

HR trends in 2023 to focus on

The pandemic dramatically set in motion a change in the way people want to work. Employees are requesting more flexible and remote working to enjoy a better work-life balance and they are not afraid to leave a company high and dry if they feel they are being ill-treated. Due to these factors, companies are having to build and rely on their HR department to ensure they are doing everything in their power to keep their employees happy, recruit top talent and ensure that their business is run effectively across all teams to maintain growth and generate profit.

We have highlighted some of the key HR trends your business needs to focus on to maximise productivity in 2023.

Employee experience & retention

The world of business has changed rapidly and so has HR, it’s no longer about what employers want out of their workers, but rather how to engage them in a way that makes them happy and satisfied employees. Companies need to be sure they are looking out for their employees’ well-being and invest in their skills and knowledge to increase retention.

One way to do that is to work with your HR department to implement employee training and development opportunities. In 2022, companies that were committed to and invested in employee development saw a 58% increase in employee retention and a 24% increase in productivity. By developing your existing employee’s skills, you are recognising them as valued members of the team and making them believe they have more potential to grow within the business and boosting employee morale. In fact, one study found that 45% of employees would stay longer in their job if the company invested in their learning and established development opportunities and this is prevalent more in younger workers.

According to LinkedIn’s research millennials and Gen Z say that learning is one of the biggest factors that make them engaged and happy at work with 74% stating they will leave their job within the next year if they are not offered the opportunity to learn and grow. And since these generations will be making up the majority of our workforce by 2025, it is wise to start investing in employee development now to motivate employees and see the benefits from a more highly motivated and engaged workforce leading to improved productivity and overall company performance.

HR function women talking on laptop

Wellbeing in the workplace

The World Health Organisation estimates that mental health disorders cost the global economy $1 trillion each year in lost productivity. Therefore, more and more companies are recognising the value of investing in employee health. In 2023 we can see a greater emphasis on holistic wellness programs that address mental and physical health. Well-being initiatives can include:

  • workplace meditation rooms
  • discounts on gym memberships
  • access to mental health resources which the company subsidise

Companies can take this further by utilising their HR team to incorporate wellness into their overall corporate culture with a focus on promoting healthy behaviours and lifestyles among their employees in and out of the office.

The importance of employee well-being not only increases staff productivity by reducing the number of absent days required due to poor well-being but it can also enable companies to stand out from their competitors. A report in the Surgeon General on Mental Health and Well-Being, states 81% of workers say they will look for workplaces that supports mental health when job hunting.

As we can see investing in employee health needs to be more emphasised because it is one of the factors applicants prioritise when looking for a job and is also one of the reasons an employee may think about leaving their current job.

Hiring the right staff

There has been a dramatic shift in the hiring process for most businesses over the past few years, including shifting the focus from degrees to skills. In fact, new research by global HR and payroll experts, Remote, found that skill-based hiring is up by 63% in the past year, as more employees are extending their workforce to more people who harbour the desired skills and behaviour over academic achievements. Segal’s head of organisational effectiveness argues that hiring based on behaviour enables you to focus on choosing employees that will keep company morale high, in addition, it’s easier to train people for skills than to change negative behaviours.

Additionally, hiring the right staff in the first instance will save your company time and money on lengthy recruitment processes. Your HR function is key to understanding what your company needs and they can find the right staff to excel and deliver your company to success.

The world of work is becoming even more hybrid & remote

Since the pandemic employees across the globe have shifted to their preferred model of working and companies who has not been flexible with the requests have lost great employees to a competitor business that listens and encourages a more manageable work-life balance. And this is not set to change in 2023, as requests for remote and flexible working will continue to rise. By offering remote working options your company can attract and retain top talent that might otherwise be unwilling to relocate or commit to a rigid office schedule. Yet offering remote and flexible working comes with its challenges for your HR department including working out the logistics of making it work for everybody, establishing and maintaining trust, preparation and improving visibility across your organisation.

It is important that you collaborate with your HR department and agree on guidelines and policies, creating the workplaces where work will happen, the technology and tools needed, core collaboration hours and rituals for success before offering remote and flexible working to your current and future employees. Your HR function will be the key to changing your working models by collaborating with all of your employees and head of boards as well as investigating the best technological tools available to ensure remote working benefits and doesn’t hinder the development of your business.

Attracting talent

Attracting the right talent seems to be getting harder for companies as the job market is saturated with competitive companies that may be offering potential employees better benefits. Your HR function will oversee building strong interviewing and screening processes, develop successful employee evaluation tools and implement compensation programmes to maximise your chances of standing out from the competition and enticing job seekers to apply to work with you.

Here we will outline the challenges companies face when attracting top talent and how they can overcome these hurdles.

Employer branding & reputation

We shouldn’t have to tell you that reputation is everything, which is why one of the most significant recruitment trends in 2023 that every company should pay attention to is their employer branding. Job applicants will not only investigate a company’s employee benefits but also their reputation via company review sites like Glass Door where current and former employees are able to share their honest feedback on what it’s like working for their company.

To stand out from the competition you need to develop and promote a strong brand that highlights your company’s ethics, supportive company culture, employee growth and training and stable finances. It’s not just potential clients that will examine your company’s reputation and brand before reaching out to work with you, but your future applicants will be doing the same. If you are unsure where to start ask your HR department to send a survey to see how employees feel, what they think is working well and what could be changed, from here you can start developing your new, inclusive, and strong brand reputation.

Read our guide on how to grow and protect your employer brand.

Establish remote and flexible working

The world is changing to a life of remote and flexible working, which benefits how businesses operate; they can now find employees with the skill set they are looking for anywhere in the world, and not be limited to their geographical location. Yet, this is also the case for jobseekers, meaning some companies struggle to attract and retain top talent within the competitive market.

Using your employer branding to your strengths, you can work with your HR department to ensure that your company delivers remote and flexible working throughout the recruitment stages all the way through to employee onboarding and beyond. Your HR department will be instrumental in implementing virtual recruitment processes and ensuring your company is delivering on the perks and benefits promised to attract top candidates, ensuring more talented applicants apply and your company benefits from higher employee retention.

Woman working from home in her kitchen smiling at her laptop

Entice referrals

Hiring new employees is not a cheap task, with some recruitment processes taking up to 52 days to fill a position. Some companies are now taking it upon themselves to entice referrals from their employees to save time and money.  Although this is a great way to cut back on costs, referrals are not always fool proof which is a factor that needs to be considered when deciding which recruitment route works best for you.

Your HR department will take on the majority of your company’s recruitment process, including setting up job adverts, screening and sourcing candidates, assessing and interviewing candidates, ensuring background checks are completed and playing a central role in all employee onboarding and training.

The value of an HR function

Your company’s HR function can be overlooked yet is incredibly valuable to:

  • your employee’s well-being
  • employee retention
  • developing and implementing organisational change
  • hiring and training all new employees
  • performance management
  • establishing mentoring programs
  • delivering corporate strategies and objectives
  • maintaining positive overall company morale

Above all HR function is the lifeline between unhappy employees and their decision to stay within your company.

Without an HR function companies can find themselves at risk of high employee turnover, workplace injuries, fines, non-compliance with policies, employee confusion, and higher risk of cases of harassment and bullying which puts your business at risk of developing a negative brand reputation. However, by ensuring you have built and maintained an effective HR function your business has the best chance of staying ahead of your competitors in recruitment, employee retention, business goals and profits.

Conclusively, the HR function is paramount to the success of your business.

Let us help you with your recruitment challenges

Recruitment is just one part of a successful HR function but finding the right people for your organisation who can build and maintain it can be a headache.

Let The Recruitment Consultancy make it easier for you to find the HR talent you need to build your brand reputation, re-engage your employees, and implement new and engaging policies and resources to keep your business running smoothly. With access to the best talent across Surrey and Sussex since 1997, we have built a powerful reputation for being honest, and personal, and bringing businesses the HR function they need to be successful.

Get in touch with us today to speak to our friendly team members who will advise you on the next steps to take to help your business flourish.