New year predictions: What skills will HR need in 2023?

As we near the end of another turbulent 12 months, People Management asks a range of experts to foretell the future of the people profession

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The HR industry has faced more unprecedented challenges over the past year, from navigating the consequences of the war in Ukraine to a post-pandemic cost of living crisis which is adversely impacting staff and organisations alike. With this, the sector has learnt that not all challenges can be predicted.

Noelle Murphy, senior HR practice editor at XpertHR, who shared her predictions about the future of HR last year, now recalls a bleak start to the year. “Just as it seemed the pandemic had finally lessened its hold on every point of daily life, [we faced] deep economic uncertainty from the war in Ukraine, global recovery from the pandemic, and then a destabilising mini-budget led to a severe cost-of-living crisis, raging inflation and troubling business challenges.”

And HR has been at the vanguard of these changes, which seemed to have a domino effect on the workplace. People professionals have had to keep their head on a swivel as they shifted their culture, working models, navigated the economic downturn and ward off a challenging labour market.

As the industry prepares to wind down for the winter holidays, People Management asks what skills HR will need to weather the storms of the new year.

HR leading the way with leadership and transformation

Despite the role of people professionals significantly evolving over the years, many were unsurprised that a poll of 666 senior HR professionals and 356 C-suite executives carried out as part of Sage’s report The changing face of HR in 2024 found that two-thirds (63 per cent) of business leaders still viewed HR’s role as administrative.

And, while the same survey found that the majority (86 per cent) of HR leaders felt the sector was adapting to become more speedy and agile, only two-fifths (39 per cent) believed employees actually know what the people profession does.

However, another piece of research conducted by BIE Executive, an executive recruitment and talent advisory firm, found that, encouragingly, for 61 per cent of the polled HR leaders, the HR function had developed at pace within organisations since the pandemic.

Moreover, most welcomed the pandemic-spurred changes and felt HR was now more credible and respected (62 per cent), more visible and recognised (67 per cent) and more influential (63 per cent). In addition, more than half (58 per cent) said that boards are now looking to the HR department to drive transformation, and that this skill will be most in-demand in the coming year. 

Expanding on the value of leadership coming from HR teams, BIE Executive’s managing director of HR, Emma-Claire Kavanagh, says: “The shifting priorities for HR towards transformation and leadership came through very clearly in our research, and this is backed up in our daily practice”.

“The businesses we’re speaking with are increasingly looking for people to come and sit at the table to challenge them, to help them grow and shape their business to focus on their people,” she adds.

Judging by the findings, it also seems like the complexity of the HR role in business is growing, as the survey indicated senior HR professionals are stepping outside of their traditional function and contributing to other areas, including ESG (49 per cent), operations (45 per cent) and commercial/sales (26 per cent).

“We are seeing less-experienced CEOs surrounding themselves with brilliant direct reports who can effectively coach them into making effective decisions,” Kavanagh adds.

With more on HR’s plate, resilience will be key

As organisations and the economy had to work harder to bounce back after last year’s challenges, the drive for HR to do more and be more has been evident to most.

And looking ahead to 2023, Gemma Dale, lecturer at Liverpool John Moores University, says this will only continue. “It is clear that the months to come will continue to be ones of uncertainty and turbulence. From the ongoing wave of industrial unrest to the cost of living crisis, HR teams will once again be called upon to be agile and responsive, guiding their business through challenging times to come”.

“For these reasons, I think the skill that HR will need is resilience,” Dale says.

Rebecca Peters, research adviser at the CIPD agrees, adding: “When we talk to leaders within HR, there’s a notion that the remit of generalists is ever increasing, particularly the growing skills demand and raised expectations of competency.”

Peters highlights the impact this emotional toll might have on people. “We know the wellbeing of people professionals has been hit under the pressure of recent years [as per the findings of the CIPD’s People Profession 2030 report], so we need to ensure the profession is supportive of their own health and wellbeing to avoid negative consequences like burnout.”

Echoing this, Dale adds that while “it is difficult to predict even the short term future, other than to say it will inevitably involve more change,” she urges HR professionals “to focus on their own wellbeing whilst delivering [on their goals], and ensuring they don’t burn out after nearly three years of ongoing challenges”. 

Similarly, Murphy adds that “the resilience HR have shown during that time is going to be needed, once again, over the coming year – in spades. There’s never been a more important time for HR to reach out to fellow professionals to support and lean on each other”.

Ability to retain talent and foster better culture

Gaby Joyner, employee experience expert at WTW, points to the organisation’s recent poll which uncovered that the majority (95 per cent) were concerned about retaining talent in 2023.

She says that HR and employers would benefit from finding out what people want on the ground. “Employee surveys and focus groups can help decipher what’s most important to your workforce, so you can prioritise where change needs to happen.”

However, a survey by WorkBuzz revealed this is an area businesses are lacking in, with only two fifths conducting annual surveys. It also found that their use dropped by more than half (53 per cent) in four years, with Gary Cookson, director of Epic HR, pointing out: “The only things that should be annual in an organisation are things like Christmas and birthdays.”

But a focus on improving company culture and upskilling staff has been prevalent, with many arguing a gold-standard company culture and the ability to progress and build knowledge is to become more valuable than pay as remuneration struggles to keep up with rising inflation.

Echoing this idea, Peters says that attracting, recruiting and retaining talent, and building organisational culture and values – both key areas to attract, motivate and retain staff in a tough labour market and increase employer brand perceptions will be the elements that make one an “an employer of choice”.

Dr Nick Kemsley, director of Henley Business School’s Centre for HR Development, also predicts that HR will need to “get on top of strategic workforce planning and be prepared to challenge some of the assumptions which sit underneath their talent management approaches, which are often based on outdated career assumptions.”

He adds: “HR needs to continue to be able to work with increasing levels of ambiguity and to make ‘best fit’ decisions which have no perfect answer.”