2022 was busy for all involved in the HR space – and Harver was no exception. Entering our first full calendar year under the Harver brand, following the Outmatch acquisition and its subsequent rebranding to Harver in 2021, we waded further into M&A with the exciting August acquisition of pymetrics. The year’s progress was further accentuated by our inclusion on the 2022 Inc. 5000 sheet later that month.
We forged ahead in 2022, united as one Harver, providing ongoing updates to our suite of products for the talent acquisition, development, and mobility markets (together representing a $1+ trillion talent “mega market”). Our team of Harverians made stops at industry events such as July’s RecFest and October’s Gartner ReimagineHR Conference along the way, making note of top trends along the talent lifecycle such as employee agency, balancing speed and quality in hiring, and AI implementation.
Some, if not all, of the trends discussed at these events remain relevant as we turn the corner into 2023, a year in which the HR tech space is not expected to get any less busy. Success in the year ahead for HR tech providers requires proper planning, and proper planning is attributable to the ability to recognize these market trends and prepare for them accordingly.
With this in mind, we connected with five Harver executives, each industry experts in their own right, to pick their brains on what HR leaders should prepare for in the year ahead.
Here are their insights:
Scott Landers, CEO:
The Rise of the Customer-Centric Company
In 2023, the customer will reign supreme. To have a competitive advantage, organizations need to realize that CEOs and the c-suite do not have all the answers. The keys are with the customer base. Customers can help inform strategic direction as their needs have likely changed in comparison to a year ago. Customers can help organizations understand the biggest challenges and pain points caused by factors such as market changes and hiring freezes/layoffs. If companies do not communicate with customers to clearly identify their challenges, and work to address those in collaboration, they will fall behind their competitors.
Expect an M&A Boom
Momentum and consolidation will continue over the next 12 months and the level of mergers, acquisitions, and partnerships will be near pre-2021 levels. This activity in the market highlights higher demand for HR tech as companies consider how best to seamlessly organize, hire, and upskill teams.
dr. Frida Polli, Chief Data Science Officer:
A Focus on Compliance is Crucial
Gone are the days of building products without understanding regulatory standards. In 2023, organizations must not only consider but comply with new regulations being created across governmental jurisdictions. Across the country, governments are creating new HR regulations, mandating parameters that solution providers must adhere to. The federal government is working to develop the American Data Privacy and Protection Act, for example, while in New York City, the city council has passed a law requiring employers in the city to subject any automated employment decision tools to a bias audit. Any company that handles candidate data must remain educated on the regulations in their jurisdictions. From there, they must not only ensure that current offerings comply with these regulations, but also develop future products and product iterations with these regulations in mind, or else face potential consequences.
Laura Stanley, Chief People Officer:
Talent Retention and Employment Engagement Will Remain a Mainstay
Driving engagement and retaining employees consistently shows up as an organizational priority — and 2023 is no different. Research continues to prove that highly engaged workforces lead to positive bottom-line impacts and greater shareholder value. Companies that drive employee engagement with a renewed focus on building and maintaining a values-led culture, while also fostering individual connections, team connections, and an overall sense of community, will remain on top.
2023: The Year of Internal Mobility
2023 will highlight an increased focus on internal mobility. Curating talent from within proves to be imperative so that employees can grow, develop, and thrive within a given company. This talent imperative is only heightened by reports of increased turnover in industries like tech, paired with concerns of a global workforce talent shortage. As a parallel to technology planning and R&D strategies, organizations must also consider when to build vs. buy talent. Building talent necessitates an intentional and purposeful approach, resulting in career pathing, succession planning, and employee growth and development, all primary reasons employees join companies and choose to stay.
dr. Ben Porr, Global Vice President, People Science:
2023: The End of the Great Resignation, but the Rise of Candidate Agency
Massive layoffs in some industries, paired with economic downturn that may lead to recession, will slow down this Great Resignation. However, expect candidates to be very selective about the jobs they take. In this era of candidate agency, applicants will want to make sure they join a company on their terms with desired benefits including remote work, as well as alignment with their personal values. It will be critical for organizations to determine what they are willing to be flexible on and be clear on their values to ensure they attract and retain people. Companies will not want to mislead individuals, because these individuals will leave a position if they do not feel the organization met their expectations. In this era, receiving information in real-time is the new norm, transparency and consistency in communication from company leaders is vital.
Skills-Based Hiring (Unfortunately) Remains on the Back Burner
In the year ahead, hiring managers will continue to undervalue the importance of employee skills that are transferable across industries/experiences. Talent acquisition professionals are too busy with other processes to think beyond traditional, historically successful modes of hiring; as a result, they will still look at one’s resume to determine fit. It is optimistic to believe that hiring managers would look at transferrable skills out of necessity if they had limited applicants, but a major concern is that they would “blame” the sourcing pool for not giving them candidates with the right experience. To be successful in the new year, look to savvy hiring managers to recognize the shift, and take advantage of skills-based hiring to be ahead of the curve compared to their competitors.
Remote Work Will Often be a Requirement – But Could Have Consequences
In today’s workforce, company leaders cannot afford to rely on the “old ways” of working, where in-office attendance was an accepted mandate. Continuing to reimagine our work paradigm in the years ahead will be critical for enterprise success, and that starts with providing candidates with a remote working option. The newest workforce generation is now used to working remotely and taking breaks during the day for activities like playing video games or watching TV to decompress. These options are not very different than a given company having table tennis or foosball tables in the office to take a mental break but remain something that managers will have to understand and offer to employees. Be forewarned, however: while remote work is here to stay, this may cause the new generation of workforce to miss out on in-person office interaction and other intangible benefits like learning how others conduct themselves professionally.
Oliver Staehelin, Chief Strategy and Development Officer:
Employees Remain in the Driver’s Seat in 2023
The power dynamic will remain tilted towards the employee and will not shift back to employers anytime soon. Quitting is not a post-pandemic phenomenon, as quit rates have been steadily rising for over a decade. In addition, we saw the highest new union election win rates in over 20 years in 2022. Meanwhile, pressure to increase wages will continue to persist albeit at a slower rate. The aforementioned are all symptoms of the underlying workforce crisis, in which there simply aren’t as many working-age people in this generation as there were in previous generations. Companies (and even countries!) won’t have enough workers to fill the number of job roles required to keep growing at the rate they’ve been growing.
Increase in AI/ML Purchasing
In an effort to drive productivity up, while reducing costs, companies will need to do more with less. To achieve this, they will continue to increase their reliance on software and investments in automation and artificial intelligence where possible. In addition, companies will place a more concerted focus on finding better fitting talent for jobs that only humans can do and jobs that humans are better at doing, thereby upgrading their workforce.
Employers Will Look for Talent Internally
With hiring freezes, layoffs, a looming recession, and businesses striving to increase productivity while keeping costs down, companies will double down on looking for talent internally. Focusing on internal hires and career re-pathing will save costs in a difficult economic environment, enhance retention among top performers, and de-risk business as internal hires require less ramp up and are already culturally aligned. The focus here will be on upskilling and reskilling employees who have proven that they can handle additional or heightened responsibilities. Identifying agile, high potential employees who are open to reskilling, and developing them, will become a critical operational advantage.
Hiring for Capabilities > Hiring for Resumes
The rate of change within and across job functions is dramatically increasing. The skills required to perform well in a given role over the last 10 years are not the same as those required to perform well in that same role over the next 10 years. This means companies will have to place more emphasis on core capabilities when evaluating talent, over traditional job fit criteria. Employers will want to understand who can adapt and thrive in this environment and select for capabilities such as grit and learning agility, which are required in rapid strategic shifts, rather than hiring based on work experience and minimum education requirements. Expect companies to have a more open mind on “what it takes” to perform well in a job to expand their candidate pool, and increasingly evaluate candidates for needed entry competencies while making note of what can be developed over time.
The Return of Boomerang Employees
While the job market is likely to remain cyclically robust, it is not uncommon for the number of boomerang employees across industries to increase during periods of market uncertainty. Employees will look to re-join organizations that they trust and feel confident at, while employers are looking to re-welcome returning employees as they feel like they know what they are getting. Uncertainty in the job market has both parties looking for familiarity and comfort, which they can likely find in each other.
The HR Tech Stack Will Continue to Consolidate
We expect to see further consolidation of the HR tech stack in 2023, largely driven by corporate buying behavior and subsequent vendor consolidation in the market. Chief Human Resource Officers have been sitting on top of massive amounts of talent data that reside in different and disconnected systems; they are also being asked to drive greater efficiencies in software spend. Both factors will push them to seek out larger, more integrated solution providers and rely increasingly less on best of breed or point solutions. In turn, this will drive a new wave of vendor consolidation through M&A, with larger players with stronger balance sheets using 2023 as a unique buying window.
Does your talent lifecycle strategy adequately prepare and account for the 2023 industry trends our executives have identified? Visit our Solutions page to learn how Harver’s product suite can address your talent needs in the year ahead.