Blog & News

HR Trends for 2023: What To Have On Your Radar

Share this post:

When it comes to HR trends for 2023, quiet quitting and talent shortage aren’t going away. Employee experience, technology and the impact of the AI bill of rights on hiring will join them centerstage. What part do the state of the tech market and the role of the CHRO play in this scenario? Read on to find out.

Trend 1: Recruiting in the Face of Talent Shortage

Eighty-one percent of recruiting teams reported that hiring is more challenging than a year ago. And according to a recent Gartner study, 36 percent of HR leaders define their sourcing strategies for finding the skills they need as “insufficient.”

Contingent workforce hiring and internal mobility strategies are helping some organizations meet their needs by filling short-term positions or reallocating talent to where it is most needed. Still, for many, these strategies alone won’t completely solve the skills gap in the long run.

As if this wasn’t enough, a bad hire can cost a company at least $4,700, which adds extra pressure to recruiters’ tasks. A compounding factor? The Great Retirement. With seventy-five million Baby Boomers expected to retire by 2030, the need to bring even more qualified workers into the organization is a challenge that many talent acquisition teams will face.

In this context, analysis has led many organizations to conclude that they can’t rely on their current technology to secure talent now and in the future. As such, despite a potential recession on the horizon, 63 percent of HR decision-makers reported plans to increase spending on recruiting technology.

Within this category, 48 percent of respondents want to invest in improving career sites, a critical first touchpoint for many candidates.


Forty-five percent of leaders are also looking to increase spending on CRM in order to better pipeline and nurture talent ahead of business demand. With the goal of improving the experience for applicants, the intended investment in ATS follows closely, with 42 percent.

Apart from the interest in individual solutions, a growing number of organizations are looking to implement CRM, ATS and onboarding on a single platform with the objective of improving the experience for candidates, new hires and internal stakeholders.

But the key business benefit will be the level of clarity the organization will get from a consolidated data model. As sourcing and hiring challenges evolve, they’ll turn to real-time insights to make informed decisions.

Trend 2: New AI Regulations

In 2023, New York City plans to legally restrict the use of AI tools in the hiring process. Although the state of Illinois regulated the use of AI analysis of video interviews in 2020, NYC is the first to expand its reach to the whole recruitment process.

Since many organizations are using machine learning algorithms for recruiting and talent management purposes, increased attention will be paid to keeping up with the upcoming changes in regulations and understanding exactly how AI is working to enhance processes. More than ever, companies will be looking to decide and control when and where it is appropriate and beneficial to use AI.

Trend 3: The State of the HR Tech Market

According to industry specialist Josh Bersin, workplace technology investment, which hit new highs in 2021, fell in the first half of 2022. He said it would get more challenging for vendors to raise money and buyers should expect more consolidation in the market.

Why is this important? In such an active M&A market, a change of management at your vendor could result in a drastic change in direction from both a leadership and product development perspective.

If founders with experience in the HR space are replaced with investors with limited HR vision, the partnership you counted on might fall by the wayside. Similarly, the product roadmap and investment in innovation might take an unfavorable turn in direction.

In such an uncertain context, there is an increased appetite for the stability of privately owned, debt-free vendors that provide customers with the assurance that their focus remains on meeting their needs rather than turning a quick profit.

Trend 4: Employee Experience in the Face of Quiet Quitting

Many organizations are struggling with a disengaged workforce. The challenges posed by quiet quitting and the Great Resignation have catapulted employee experience to the top of many HR teams’ lists of priorities.

The good news? By focusing on key moments throughout the employee journey, starting when a new hire accepts an offer, we’re seeing several organizations turn this trend on its head, with many other companies following suit. With the right technology to capture employee information, organizations will look to engage workers in a meaningful way.

Trend 5: Skills and Learning

A skills-based approach is broadly accepted as one of the most effective strategies for organizations to detect the right person for the job.

But to adopt this approach at scale, organizations need the technology that can do the heavy lifting, which is why there is increased interest in solutions powered by an extensive skills ontology and effective and transparent machine learning algorithms.

The “Great Reskilling”

However, when it comes to upskilling, there is a significant mismatch that many companies are facing. Nine out of ten workers say they learned a new skill recently, but 98 percent of companies still report significant skill gaps, according to a recent Mercer report.

There are two issues at play that organizations will have to address to upskill their workforce effectively. On one hand, reporting: how to capture what skills an employee has and those they need to develop. On the other, the misalignment between the skills they are learning and those you require as a business.

In this context, efforts are underway in many companies to gain a holistic view that connects that perceived idea of upskilling to actual business needs while personalizing the learning experience for each employee. Much progress is expected to be seen in this regard: 78 percent of companies consider L&D a top C-Suite priority, but four out of five organizations are lagging in every L&D area.

To address the issue, there will be more interest in social learning solutions, which have the added benefit of creating community and promoting employee engagement. The collaborative approach to learning will complement traditional resources and capitalize on other skills and knowledge available within an organization.

Trend 6: The Growing Role of the CHRO

“Over the next three to four years, everything’s going to change when it comes to recruiting and engaging new generations coming in,” anticipates Avature’s CEO, Dimitri Boylan. Changes include those mentioned before, but also the new dynamics of the stay-at-home workforce and the multiple interpretations of what the hybrid work model is. In such a fast-changing context, the role of the CHRO will grow in importance and continue impacting the workplace.

Making the Case for HR Technology

In a recent conversation with HR Leaders, Boylan said that organizations are getting on board with the digital transformation they need to undergo, but HR technology should be addressed separately. As he said, it’s more than “moving to the cloud.” CHROs will look to ensure that their needs are met through investment in technologies that will truly drive the change they want regarding how HR is administered.

To Conclude

Though technology has always been an important strategic enabler, in today’s market, it’s more critical than ever. Since investment in talent solutions is likely to increase, CHROs will continue playing an active role in defining how that budget is allocated.

To make this decision, two aspects will be crucial: the fact that the vendor can provide the technology to address present and future challenges and that they act as a partner that can share their expertise based on their experience with similar customers. Organizations that choose this type of vendor are better equipped to adapt to the new scenarios 2023 may present.

Share this post:

More related content