The Year 2023

The end of 2023 is in sight. Lights in Christmas trees and out-of-office notifications are turned on. Work attires and equipment have been swapped for ugly sweaters and festive ornaments. Ten days from now, the world will celebrate the conclusion of a tumultuous year and toast to a good, happy, and healthy 2024. It's the perfect time to reflect on what happened in 2023 and how it shapes the future workforce.

First up is one of the most prominent changes this year: the return to offices. It was hard to miss the headlines about organizations forcing their remote policies through the shredders and adopting stricter hybrid policies. Zoom, known to enable work from home for everyone, ditched its pandemic plans and mandated their workers to show up in its offices. Balance and consensus built throughout the pandemic made a place for debate and extremes. On one side, there are companies like Google, Meta, and Amazon where fully remote jobs are becoming remnants of the past. On the other side, some companies have gone all in on distributed work including Deel, Atlassian, and Github. Where these companies do find each other is that five-day office weeks are not an option. That doesn't go for all organizations. 59% of the workforce is still working in the office (WFHResearch, 2023). In comparison, 28% of employees work in a hybrid setting and just 13% of full-time employees work from home. Employees firmly hold on to their demand for flexibility. 98% of workers want to work remotely at least some of the time (Buffer, 2023). This data in combination with lasting labor shortages suggests workplace flexibility will grow in the coming years.

Second is a topic dominating speech stages this year: Artificial Intelligence (AI). If it wasn't about the technology itself, the people behind it managed to draw significant attention. For days, the board of OpenAI and Sam Altman kept the world in limbo after the latter got fired by the former only to be rehired days later after employees threatened to quit. One CEO after another took the stage to lay out how AI is redefining our (working) lives. In 2023, AI quickly transformed from a visionary idea and early-stage features to mass-adopted technology and thousands of AI-powered applications. Nearly all workplace applications have been equipped with AI features and companions making day-to-day work that much more efficient. GitHub (2023) shows that developers using AI are coding 56% faster. With the potential to replace 85 million jobs and create 97 million new jobs by 2025 (World Economic Forum, 2020), AI is the most influential invention of this decade. The fear of job loss combined with growing opportunities at high-paid tech jobs has sparked a learning and development revolution in which workers are future-proofing themselves with AI skills. Developments in AI this year are digital transformation on steroids.

Third and finally, 2023 is a year shaped by unique circumstances in the labor market. Massive talent shortages met economic uncertainty. Whereas past years of recessions were followed by big layoffs across industries, this year was different. Yes, some organizations overhired last year based on inflated growth forecasts and laid off workers. Spotify, which recently announced its decision to lay off 17% of its workforce, is an example of that. Nonetheless, the labor market remained extremely tight. Unemployment has been and continues to be low and there are more jobs than unemployed people. Even companies that restructured are facing growing talent and skills shortages. While leaders were burdened with improving productivity and operational efficiency they saw demographics shift rapidly and their opportunity to fill in-demand roles slink. Workers continue to hold leverage in recruitment conversations and are increasingly taking on different gigs. The Gig Economy is real and booming. By 2025, the contingent workforce is expected to make up 30%-40% of the global workforce (Gartner, 2023). The talent industry underwent a big change, shifting leadership perspectives on talent teams from nice to have to absolutely crucial. Talent acquisition, management, and development have risen high on executive agendas and will continue to stay there in the years to come.

The turbulence of this year has organizations and employees craving for stability and confidence in 2024. As talent teams acclimate to their strengthened roles in the strategic success of their organizations, they'll be better positioned to demonstrate their impact on business outcomes. There will be a much stronger relationship between talent teams and the C-suite. Performance will dictate the agendas of talent leaders and much focus will be on skills. There's a realization that past decisions to not prioritize human capital have led to uncontrolled voluntary turnover, employee disengagement, and skills shortages. Yet, there's also a growing ambition from leaders to do better and use technologies to accelerate positive change. In 2024, it's likely to see a transition to more meaningful productivity actions and bigger investments in items such as flexibility and career development that boost job satisfaction and continuous learning.