HR in 2023! A busy year ahead

Craig Mason • Jan 13, 2023

Predictions at the start of the year are always fraught affairs. Realistically, the talking heads have no idea what unemployment, GDP or inflation will be by the end of the year. Apart from expecting volatility, the economic conditions are hard to pin down. What’s certain, is that the economy will impact the HR job market. Read on to discover Craig Mason's predictions for what will be keeping HR professionals busy in 2023.

HR in 2023... expect a busy year ahead.

Notwithstanding the many unpredictable economic and global factors that will come to bare in 2023, and putting the big picture aside (if that can be done), there are some reasons to think that the HR profession and HR talent markets will have another busy year in 2023. In no particular order, these reasons include the following;

Executive Reward under the spotlight

ASX companies continue to be scrutinised on their reward practices. Twenty top ASX 300 companies received a strike vote in 2022 on their reward practices including Downer, Blackmores, ASX, Star, Goodman Group, Cleanaway and Santos. Executive reward practices are always under pressure to get the balance right and momentum is growing for a stronger alignment to company performance. In 2022, Australia’s top 50 highest paid CEO’s pay rose a collective 16% at a time when wages have stagnated for the vast majority of workers. Executive reward will be front and centre and skilled experts will continue to be in demand.

A changing IR landscape

Irrespective of your views on Tony Burke and the IR legislation that passed parliament in late 2022, it won’t just be the waterside workers and the train drivers having a barny this year. The legislation will have some widespread ramifications. Relatively small businesses that have travelled under the radar will be caught up in industry-wide pattern negotiations, along with larger organisations. Much IR capability has been lost over the last 10-15 years in corporate Australia. Companies that don’t want the black and white solutions offered by their lawyers may struggle to find the right talent.

Continued talent shortages

Even in a potentially softening economy, there are still talent shortages – the unemployment rate still has a 3 in front of it! Some shortages are well publicised, but others are not. For instance, just before the break, Richard Marles, the Defence Minister said that the ADF was 3000 servicemen and women below requirements and the department was 1000 public servants below its budgeted amount. Who knew? He said that we have a “defence personnel crisis”. The range of sectors that are equally impacted are many and varied. Whilst some heat is coming out of the employment markets, TA professionals will still be in be in significant demand.

Cost cutting & change

Due to the softening economy, there will be some sectors where cost outs and redundancies will need to be managed. Technology companies including FinTechs are at the front of the queue and most likely to be slimming down in 2023, (hopefully they won’t be as high profile and messy as Twitter’s much publicised meltdowns). Having said that, you’d imagine the extra demand and expenditure in the cyber security world will mop-up a lot of excess technology capability. Either way, change and restructuring will take up a lot of HR professionals time in a whole range of sectors this year.

Fixing inequality

Just one example is the law. Law firms have led the way with gender parity but last year, the number of females who made partner in Australia slumped to its lowest level in 3 years. There is a 60/40 spilt female to male graduates in the law but only 16% of the top 50 firms have female leaders. It’s not just the liberal party that has a gender diversity problem. Boards and senior executive teams are still struggling for something that approaches gender balance and it’s a continuing conversation for HR.

Executive behaviour

There were some high-profile sudden departures of CEO’s and senior executives in 2022. Mostly they go without explanation and are paid out to keep things quiet. McDonalds has been charged by the US regulator for a lack of disclosure about their former CEO’s involvement in a scandal. As reported by the media in Jan 2023, even a conservative adoption of similar standards by Australian regulators would require companies to fully disclose if an executive is removed for inappropriate conduct. Pressure will be placed on Australian companies who in the past have hidden executive misconduct for a fear of reputational damage. For instance, ASX-listed shopping centre group, Vicinity Centres is the one of the latest to lose their CEO after a harassment complaint. Two investigations found a high degree of dysfunction stemming from the CEO, Grant Kelly’s behaviour and multiple examples of his harassment of a former senior executive. The Board didn’t terminate him ….. just accelerated his departure ! Seriously? You can’t make this stuff up. The AFR called his exit “a shocker”. One would think that the riot act will need to be read to executive teams that still have an issue with behaviour and HR will lead the continuing education process in 2023.

The rise of AI & use of analytics

ChatGPT could very well dominate the conversation by the end of the year on work outsourcing. The text generating AI bot is being looked at by a range of professions to replace work from Software Engineers to digital marketers. It reached a million users in its first 5 days after its release. This is way faster than any previously released technology including Instagram which took 2.5 months to reach the same number of users. HR could and should be at the front of these discussions along with the continued focus on data to inform people strategies.

Managing psychosocial risk in the workplace

With a greater emphasis on organisational obligations to manage mental health, HR have to collaborate with Health, Safety and Environment professionals to respond to changes in legislation. As testimony to the interest and focus in this area, our organisation hosted a webinar in late 2022 that over 1300 people attended. This is not just a key area of risk to manage but also a true proactive opportunity for HR to support a positive culture around mental health. Learn more about this hot topic here.

Some HR job market hotspots

In the last HR Job Index for 2022 we saw that there are some clear hotspots that will continue to drive overall demand for HR in 2023. These are;

A rise in the range of interim/contract opportunities. In a softening economy, work and projects will still need resources but organisations are looking at shorter term solutions. A good many HR professionals have also indicated that they are favouring the interim assignments as a portfolio approach.
Construction/Mining and Utilities along with Health Services are areas of strong HR activity. Demand in Financial Services has dropped off significantly.
Queensland and Western Australia are both strong markets with Victoria and New South Wales maintaining their overall demand.

Anecdotally, there will also be turnover in the executive levels of HR. CPO’s/HRD’s have been at the forefront since the pandemic started in March 2020. Many are now looking at their next challenge as they navigated their organisations through the past extremely demanding years. A change at the top of the function inevitably brings changes in structure and team make up so could be a busy time HR functions recalibrate.

How can we help?

So with just a small sample of areas of potential demand, 2023 is looking like another busy year in HR and the HR talent market.

If you are looking to hire human resources professionals or are searching for a new HR role please reach out to Craig, your Next Step consultant or contact us to speak to a team member in your region for a further discussion.

Craig Mason is the Founder and Director of The Next Step. Craig is one of Australia's most experienced HR practitioners and talent resourcers, having specialised in the HR field since 1992.