November 30, 2022
A new poll from employment law and HR consultancy firm, WorkNest, claims that 70 percent of HR professionals believe that the cost of living will be their most significant challenge for 2023. This was closely followed by retention (69 percent) and recruitment (55 percent). A third of those questioned also see skills shortages (34 percent) as a significant HR challenge next year, and employee engagement (24 percent).
Echoing this, half (50 percent) of HR professionals believe retention will be the stage of the employee lifecycle in which they will face the most challenges in 2023, followed by recruitment (44 percent).
Only 6 percent of HR professionals think the most significant challenges will come from in-life employee management (onboarding and offboarding).
With the cost of living crisis and the repercussions this will have throughout 2023, three-quarters (75 percent) of HR professionals revealed that mental health and wellbeing would be the most crucial area for HR to support employees over the next 12 months.
This was followed by performance management (50 percent), diversity, equality and inclusion (48 percent) and hybrid and flexible working (48 percent). Other areas also mentioned by HR professionals included financial wellbeing and cost of living.
Almost half (49 percent) of HR professionals admitted they’re not looking at cost savings in their organisation, despite the majority stating that the cost-of-living crisis will be their biggest challenge next year. However, almost two in 10 (18 percent) HR professionals divulged that their organisations would reduce headcount to drive cost savings, and 10 percent were pausing recruitment.
Hannah Copeland, HR Business Partner at WorkNest, commented on the results, “HR teams across the UK have a challenging year ahead. The cost of living is at the top of everyone’s mind regarding how they manage and support their employees through this difficult time. Unfortunately, many businesses will be forced to make cuts and may encounter tremendous retention and recruitment issues as employees look to improve their salaries in the face of rising costs.
“Keeping employees engaged, having regular conversations with them to understand their worries and supporting them with mental health and financial wellbeing will be critical over the next 12 months. Organisations will need to be working through robust and fair redundancy consultation and selection exercises and make sure that employees are treated with empathy and respect if they are impacted; remembering that no redundancies can be made on discriminatory grounds otherwise, they could face various legal challenges.”