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Top 2023 HR and HR Technology Trends

4 key HR Tech and PeopleOps trends to take into 2023, and 2 we should leave behind.

Hallie Bregman, PhD, CEO of The Bregman Group
Global Talent Strategy and Analytics leader with 8 years of People Data experience
November 8, 2022
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It can be hard to keep up with all the changes in human resources these days. From technology to culture to experience to regulation, there are major changes on a near-daily basis. HR professionals and HR leaders have a lot to think about as we wrap up 2022. The great return to in-office work post-pandemic and the resistance this receives has made us rethink the employee experience a lot.

While it’s hard to analyze every new buzzword and development, there are some HR, PeopleOps, and HR technology trends that deserve real consideration as we head into 2023.

In This Article

The Current HR Tech Landscape

After 12 billion dollars of investment in 2021, it’s not surprising that there has been such a boom in HR Technology. Nearly every day, a new player enters the market. Most of the HR tools are small and niche — optimized for a very specific use case. The incumbent players in HR software are working hard to innovate and acquire new features in order to keep up with the Joneses.

This landscape results in more HR tools and workplace systems than any organization can handle. First, leaders don’t even know what is out there, so are unable to make an informed decision, simply defaulting to what is easily visible to them. Once HR tools are selected, the next task is to fit them into a crowded ecosystem, with an HR Tech stack so full that employees are asked to have touchpoints with upwards of ten systems.

Employees express frustration that they don’t know where to go for what, resulting in a poor employee experience. Even the HR team is confused by the plethora of tools. Ironically, the intent of most of these tools is to simplify and streamline operations through automation, or to improve the employee experience.

HR Software revenue growth 2014-2025

HR Tech Trends for 2023

Consolidated HR Tech and HCM Solutions

Considering the above, the most obvious expected trend for HR technology in 2023 is consolidation. There is no way that HR Tech can keep growing the way it has; it is time for optimization.

In 2022, there have been some early acquisitions among HR platforms that are paving the way for more to come. Workday bought Peakon, Visier bought Yva.ai, and Perceptyx bought Calibrate. There are more acquisitions, no doubt, but this mergers and acquisitions trend is just getting started.

Listening to Employees Through Data Aggregation

If you are familiar with the acquisitions listed above, you’ll also notice a secondary trend: employee listening.

Both active and passive listening tools for HR analytics continue to pick up steam, and 2023 is geared up to double down on passive listening. Passive listening takes existing data within HR software platforms and observes aggregate behavioral and communication patterns. It answers key questions about the work environment, HCM, and workflow functionality. Questions like “How often do employees use this software?” and “ How often do managers meet with their teams?”.

While often confused with employee monitoring (which it is not!), HR technology with passive listening has the potential to unlock tremendous insights regarding productivity, feedback delivery, onboarding efficiency, employee engagement, and more. With the acquired products maturing within their new organizations, there is little doubt that passive listening tools will be more widely available. Not to mention, many companies that are just beginning their journey — Worklytics, Humu, and Swoop Analytics, for example.

People analytics data on Workday

People Ops Trends for 2023

Shifting the Focus to Employee Experience

Broadly, HR continues to be in a period of transformation. Digital transformation, workplace transformation, HR technology trends, performance management, and cultural transformation all sit at the intersection of the employee experience. More than ever, nothing stays the same.

For this very reason, scaling transformations that benefit employee experience should be top of mind for HR leaders. Shifting a single process, portfolio, or policy is relatively easy. Scaling an organizational transformation for advancements in employee experience is much harder. There should be a strategy and purpose behind all the decision-making in this transformation — to keep things going when the going gets tough.

Trends in HR Tech

There’s a tremendous mix of organizations still focused exclusively on support and compliance, while other organizations are industry-leading innovators in employee experience — a key driver of employee engagement and retention. As a whole, we must scale the improvements made to this field universally, because there will soon be more changes to come.

Consideration of the Individual Over the Workforce

Personalization is also likely to be a focus area for human resources and HR technology choices in 2023. In the last 2 years (post-pandemic), employers have decided whether to be a remote, hybrid work, in-person, or flexible workforce. Flexible organizations (that offer both in-office and remote work) are enticing simply because they give employees options. Options, choice, agency, and personalization are all things employees want because they make them feel respected. This is essential in fostering employee engagement.

Being forced to fit in a box is no longer the expectation of employees. They also want seamless experiences — they don’t want to have to go to Slack for one communication and text for another and email for another. All this noise hinders employee productivity, especially in a remote workforce. Instead, workers want the employer to communicate in their communication platform of choice. Personalization makes employees feel valued without creating friction.

Outdated Practices to Leave Behind

HR management of today has evolved significantly over the last decade, and sometimes the past should be left in the past. Often, it can feel like HR teams are being asked to do all the things they used to do (e.g., employee relations, compliance, support) while also taking on more strategic capabilities, like workforce planning, people analytics, and skills management. Some things must carry into the future, while others should be left behind.

Outdated HR practices to get rid of

Stepping Out of HR’s Paper-Pushing Comfort Zone

HR was historically a risk-aversive function, workflows concentrated on dotting our i’s and crossing our t’s. Yet, with new disclosure regulations coming into effect, transparency is coming. Realistically, that means taking on some risk.

Before, you could ignore what was behind the curtain if you didn’t look. Now, you are being mandated to look. So, gone are the days when we didn’t take chances. Just take Diversity, Equity, and Inclusion (DEI), for instance, or employee mental health. For a long time, we didn’t know what we didn’t know about employee wellbeing, because we chose (or were asked) not to find out. Today, both HR professionals and HR leaders must confront risk head-on and do better.

Breaking Down the HCM and HR Silo

Over the last two years, if there is one phrase that is overdone it is that “HR should have a seat at the table.” Let me be clear — it should. Moreso, HR represents that silos should not exist within an organization.

With the strategic HRM shift and so many HR leaders finally having a voice that is heard on the executive team, the next step is to eliminate the verbiage of “the HR department and the business.” HR is part of the business. So often, HR leaders talk about how they support “the business” which clearly defines and separates the HR function from the rest of the organization. With this relatively new “seat at the table,” HR teams and HR functions can be more clearly integrated into all parts of the business. Let’s leave the silos behind.

Summary

Things change too fast to make guarantees. It’s possible that some of the human resources and HR Tech trends captured above will be old news by this time next year. Yet, all signs point to an upcoming year full of change in HR, talent management, and the work environment. Change in HR technology, change in choice, change in strategy, and change in perception.

HR professionals can count on one thing: the future of work will be exciting!

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Hallie Bregman, PhD, CEO of The Bregman Group

Hallie is the Founder and CEO of The Bregman Group, LLC, where she helps companies use data, analytics, and technology to develop people strategies that improve employee outcomes. Experienced in high growth technology companies, including Wayfair, Toast, and PTC, she is focused on building inclusive practices and designing novel, data-driven talent strategies.

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