Key trends in Workday HR strategy for 2023 [Part One]

Pulling together an article to align the top HR Technology and Strategy trends leaders need to know as we launch into 2023, I have discovered, is no easy task.

Of course, the challenge lies, in part, because of all the economic and social changes we’re still to be facing heading into our third straight year of massive transformation. This January’s news cycles, with layoff announcements at Salesforce, Amazon, Goldman, and others, seem to underscore concerns of an uncertain economy – at a time when our teams (and ourselves) still feel the impact of post-pandemic heaviness.

Which is perhaps why I am also seeing a host of memes and messages cajoling 2023 to “behave, sit quietly, and not make any sudden moves.” Being a leader in today’s environment is exhausting. And trying to predict what’s coming next – outside of locusts – can feel a bit like reading tea leaves at the moment.

However, amid all the change fatigue, I also sincerely believe there is also a lot of reason to hope right now. Unlike many recent entrants into the workforce, a lot of us have seen and weathered these storms before. Economies are cyclic, and ours is no exception.

Transformation, while occasionally exhausting, can also be amazing and inspiring and recharging. Leveraging new technology, we can unlock more and more insights about, and connectivity into our teams. the opportunity to reimagine business models and modalities and our ability to affect change is unmatched in memory. And it is that energy, rather than a pandemic mindset, that will help us maintain momentum, engage and inspire our organizations.

But what about those tea leaves? How can we begin to see what’s coming next? I’m a sailor, and one thing I’ve learned in my travels is that the best navigators rely on internal pattern recognition. They might not have seen this exact condition before, but they are looking for telltales inside and outside the boat to chart the best possible course.

With that in mind, I went to our leadership and advisory team to ask what they see as key trends that will drive HR strategy throughout 2023, and beyond. Here are the six key trends Skillcentrix sees coming in the next twelve months — and what to do about them.

1. 1. HR Leaders Must Develop Recession-Proof Talent Strategies
   2. The CHRO Assumes (even more) New Mandates
   3. Talent and Skills Strategies Emerge As Crucial Competitive Advantages
   4. Technology Helps Break Barriers In HR Strategy
   5. The Agile Mindset Comes to Help Manage Workforce Ecosystems

Over the next month, we’re going to go into each of these trends in detail, offering suggestions on how to align your HR and Talent strategy with an underlying vision for your HR tech stack, to ensure you are supporting your teams in the best possible way through all the changes they’re weathering, as well as ensuring your organization is ready for whatever the next economic tide brings in.

First up: dealing with the economic reality facing organizations early in the year, and preparing to recession-proof your HR strategy.

1. HR Leaders Must Develop Recession-Proof Talent Strategies

Over the past ~six months, we’ve seen a new business cycle emerge for many. From inside the tech sector and expanding into consumer markets (and other verticals), have come announcements of earning misses, extended sales cycles, hiring freezes, or layoffs.

For leadership, this trepidation for what’s coming next can get overwhelming, especially as this might be the first time some of the employment market has ever seen this cycle. (And, as this new cycle comes on the heels of the Great Reset, which followed the Great Resignation, which followed the Pandemic Pivots, which followed the Digital Transformation imperative, and on, you’d be forgiven for calling uncle.)

But the state of our current economic health (in the US and across the globe)is a bit more nuanced than a list of layoff announcements might suggest. In fact, current employment levels in the US market are strong with high job growth and significant scarcity, particularly for in-demand roles in strategy and tech.

The lesson, then, for leaders working to ensure business resiliency is that your Talent Strategy must be ready to support a host of priorities. Here are some recommendations to make sure you’re ready for whatever 2023 has in store:

• Focus on proactive, strategic recruiting and sourcing:

While this point might appear a little self-evident, TA teams can often lose focus and energy in down cycles. However, constant outreach for high-value jobs is always important.

As we mentioned above, so many organizations remain in the midst of ongoing, programmatic, Digital Transformation or modernization initiatives. That evolution of your business model inevitably requires people on the ground willing and able to help you transform, a scarce skillset regardless of macro trends.

Shifting from a reactive to proactive recruiting mindset will ensure organizations can, to borrow a Gartner term, accelerate out of the current market curve. Add in an aging workforce and new demands for a finite set of talent who can both spell and execute AI or RPA programs, and proactivity becomes even more important.

Along these lines, periods of job rationalization can also result in companies turning to a few key individuals to drive major pieces of their team (often with decreasing support, more pressure, etc.) That eventuality, of course, causes challenges from a business resilience standpoint.

If you are facing downsizing pressures, a quick reminder that many organizations often miss: your current employees are also your most valuable sourcing pool. Before you go through a mass layoff and then need to re-hire the same individuals again, use skill adjacency to identify potential candidates for existing requisitions. You get to be broader and more inclusive in your sourcing, while also maintaining a measure of goodwill among potentially at-risk talent pools (and not losing them to competitors if you let them go!)

This is absolutely the right time to invest attention in fundamental talent programs such as succession planning, mentoring, and reskilling. Always important elements, but never more so than when you are asking critical team members to do more, with less. From a strategy perspective, in a “retrenching” time, companies who focus on opportunities to reskill and upskill employees will be ready to prepare for when customer/order/service volumes get back to pre-recession levels.

• Don’t lose sight of employee experience:

The unprecedented change in the nature of work in the past years has been increasingly absorbed by the teams who work with us, who have also been asked to change, and change, and pivot, and change again.

While we may be a little overwhelmed by the news cycles of layoffs and supply chain shortages, a drumbeat of bad news is also seeping into our employee consciousness – making it hard to focus on their professional duties. Beyond that, if your company is cutting back on budgets (including development) and doing layoffs, your teams are automatically going to become less engaged and therefore less productive. Given the continued tight labor market for in-demand talent and overall profitability pressures, that is exactly what we don’t want right now.

Skillcentrix leaders like to define employee experience as how well employees feel (and actually are) supported in doing their best work. Practically, this becomes the set of values and culture in an organization that supports employees in being their best selves.

Like customer experiences, employee experiences are considered optimized when there is minimal friction, personalization, connection, and meaning in how they work with others and how their work is supported by others.

Data supports getting these experiences right. We know from last year’s Great Resignation that employees understand the transferability of their skills. According to HBR (and others), those who stay with their organizations believe in the company’s mission and are looking to their leadership to focus on wellness, stewardship, and diversity.

All of this adds up to a burning need for leaders to re-evaluate your employee experience and employee value proposition (EVP) at every level. While customer demands perhaps cool and budgets for new tech might cool, now is the best time to focus on this on your experiences. Even better, most of this optimization can be done with existing technology, such as Workday, which you likely already own.

Review your regular communication touch points, ensure you have a process to collect and interpret critical KPIs such as productivity, ESAT, and retention – and make decisions to increase engagement and outreach if you see those metrics faltering.

Leadership teams can shine in challenging times by reminding your team of the company mission, and how you are investing in them. Further, enterprise-level programs like a skills revolution can show employees that their development continually matters – while also supporting business resilience and diversity initiatives inside your organization.

• Align job taxonomies to business outcomes:

Getting the big picture of employee experience and employee reskilling right requires getting the details right as well. To that end, aligning your job taxonomies to support your business outcomes ensures that you’re recruiting, mobilizing, and retaining your workforce in the right direction.

There’s no one perfect way to approach this classification. (In fact, our leadership team went back and forth about our recommendations, debating whether to recommend a single unified model, or to distill out “X” taxonomies that are most critical in a down-turning economy, and how to pivot to them.)

Ultimately, we aligned on a single model as the most effective to drive quick productivity, resilience, and results in an unstable environment. By that, we suggest firms develop one taxonomy that crosses all business units, geographies, and workgroups. This structure increases flexibility within your org and allows you to more easily shift key players cross-functionally.

Within that single taxonomy, however, our leaders recommend calling out different skill categories, including:

• Functional skills: Generally related to employees’ title or business area, this is what they went to college for.)
• On-the-job skills: The specific company tools, methods, and processes required for the role
• Professional, Soft, or leadership skills: The key skills for success within any taxonomy, as well as the hardest and longest to build.

Inside that group, our team would begin by aligning your soft skills across the company for fungibility, and then look for those volatile areas where there are skill gaps and blow those out.

For example, traits like “Agile” or “Operating in Ambiguity” are ones capable of thriving in the current market conditions. These key strengths can also serve as examples to others in the organization, particularly if layoffs impact emotional attention spans, or require teams to do more or different types of work to pick up new gaps. (Because we know, no companies who undergo a layoff cycle actually then ask those remaining to do less work.)

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And that’s our first trend – complete with suggestions on how to survive and shepherd your team through the current market conditions with the right fundamentals, the right empathy, and the right organizational alignment.

Moving to an operating model grounded in Skills will help you align your talent strategy across the organization, and ensure resiliency in an unstable economy – and whatever comes after that. (Spoiler alert: Stay tuned for our Predictions Part Two blog where we dive more deeply into Skills Strategies!.)

Of course, capitalizing on new skill paradigms and aligning that with yours might mean flexing some new tactical muscles or rethinking problems, but the opportunity for return on that new thinking is massive – for both ourselves, our organizations, our clients, and most importantly, the teams looking to us to steer the ship through the chop.