2023 Top Workplace Trends

After almost three years of pandemic and economic upheaval, employees have had a couple of years of balancing personal and professional demands allowing them to reflect on their own personal needs and reconsider work-life balance and career paths. Many people have reevaluated their priorities: where to work and for whom, where to live, whether to return to the office full or part-time or continue working remotely and how to accommodate the needs of their children and elderly parents, etc. For this year’s Best Workplaces, 2023 will continue to be a time to recommit to employee well-being, adjust to flexible work, and have a renewed focus on employee engagement and retention. 

As leaders, it’s important to consider these trends as we develop and update our recruitment and retention strategies for the year. It’s a new world of work.

• Demand for labor will remain high. With the tight labor market impacting most industries, employees will continue to feel empowered to ask for higher wages, better benefits, career advancement and more flexibility.  And if they don’t get it from their current employer, they feel comfortable to switch jobs in pursuit of higher pay or better working conditions. Studies show 40% of workers are actively looking for a new job.

• Flexibility. Employees clearly want the flexibility to help with work/life balance. Flexibility is no longer just a benefit–it’s the new operating model. Flexibility isn’t only remote work (only about 37% of jobs can be done from home). But, what we can offer is more flexible scheduling and schedule certainty.  For some, it’s being able to leave work early to take an elderly parent to their doctor’s appointment, or it may be taking a midday yoga class to recharge. Companies need to be open to trying out new work models (i.e. hybrid, compressed work week, self-scheduling) while determining the best strategy that works for the organization and aligning employees and accountability to that decision. If you don’t adapt, and others do, you will risk losing top talent.

• Raising pay to attract and keep talent.  Employers have increased their salary and benefit budgets to maintain the workforces they need by adding sign-on bonuses, retention bonuses, promotions, and PTO. For 2023, companies are budgeting an average increase of 4.1% (was 4% in 2022) for both hourly and exempt salaried staff.  These are the largest increases since 2008 but still are significantly lower than the inflation rate, which is currently running at about 8.5% year over year. In this volatile market, employers are reviewing their pay structures and comparing pay to the market more frequently—at least every year and more often for hard-to-fill positions. Companies are also looking at internal equity and making upward pay adjustments when making higher offers to new employees. 

• Pay Transparency.  Pushed along by new state and local laws, more companies are increasing their transparency about pay with the intent to reduce gender and racial pay gaps. Washington State Department of L&I updated guidance on pay transparency rules state each job posting must include the salary range and a general description of all the benefits and other compensation for the available position. People want to know the salary.  It’s ranked as the most important piece of the job description.

• Improving benefits.  As workplace stress continues to rise, some employers are increasing benefits that promote self-care, well-being and work/life balance.  More than two-thirds of employers are looking to enhance their benefit offerings next year to attract and retain talent by offering better healthcare access, more affordable healthcare, expanded mental health coverage and increased family-friendly benefits. 

• Company culture will be key. Now more important than before, employees have cited company culture and focus on employee well-being and creating healthy work/life balance as the top driver of happiness and engagement.  Employees today are expecting:
  • to be treated fairly and with respect
  • flexibility to help with work/life balance
  • to feel valued, and appreciated, and have meaningful work
  • clear mission and values that are aligned with their own
  • a positive and caring workplace
  • A great manager.  How they are treated, and their relationship with their manager is key to employee satisfaction and well-being.

Companies that listen to their teams, provide competitive compensation, offer flexibility and invest in employee well-being will out perform their peers in both retention and hiring.