Predictions 2023: Recession Fears And Talent Constraints Make EX Listening Imperative
As 2022 marches to a close, we reflect on a tumultuous year and look ahead to another that promises to be even more turbulent. At the beginning of 2022, the Future of Work team fielded hundreds of inquiries about talent attraction and retention, anywhere-work strategies, burnout, culture, and employee experience. The pace of inquiry has only become more urgent as the expansive rhetoric around employee experience confronts the belt-tightening mindset of economic uncertainty.
With so much at stake for organizations, we predict that in the coming year:
- Employers will suffer through a perplexing, talent-constrained recession. When the economy slows, talent frees up as organizations reduce staff or freeze hiring, just as J.P. Morgan, PepsiCo, Tesla, and others have done. However, the demographic changes that underpinned the “great resignation“ and the ongoing impact of COVID-19-related absenteeism will continue to constrain the talent market in a tight economy. The outcome is a bullwhip effect in the talent market: Actions that respond to a constraint create an overcorrection in the other direction, keeping the market out of balance.
- Recession-focused firms will slow EX investments and pay the price. The rise of employee power may seem to result from the pandemic, but it doesn’t: The high quit rates of early 2022 were the continuation of a decade-long trend. The use of the label of “quiet quitting” to dismiss workers who want a healthier work/life balance ignores long-term cultural and generational shifts. Some organizations and even entire industries are getting blowback from employees over these changing expectations: Over one-third of US private sector quits over the past year were in frontline industries like accommodation, food services, and retail.
- Four in 10 hybrid-working companies will try to undo anywhere work and half will fail. Our 2021 data shows that 66% of US firms have adopted hybrid or anywhere-first strategies, but 49% of leaders expect to alter their return-to-office approach. While our Future Of Work Survey, 2022, shows that 68% of employees who can work remotely say they hope to work from home more often than pre-pandemic, some leaders aren’t convinced. In 2023, we predict acute confrontations in the companies that don’t listen to and collaborate with employees in shaping hybrid-work policies. And half of those who try to tighten up their policies will fail.
To learn more about what we see coming up for leaders in the year ahead, read our Future of Work Predictions report (client access only) and explore our complimentary client webinar on December 8. My colleagues David Brodeur-Johnson, J.P. Gownder, Betsy Summers, and I will discuss these predictions and more.
Not a Forrester client? Explore our publicly available Predictions resources, and reach out to us for more personalized guidance.