Workforce trends 2023

01 February, 2023

UK businesses must innovate to survive; talent retention and remaining competitive will be key

London, UK – 01 February 2023 – Global HR and payroll leader ADP, today advised UK businesses to morph their retention initiatives and recruitment processes in order to avoid being left behind due to the rapidly changing face of the workforce.

As the cost-of-living crisis continues to bite in the UK, employees are demanding more transparency around wages, more frequent pay processes, and better working conditions.

  • Cost-of-living shifting pay expectations

“Historically, the job market has vacillated over who holds the ‘power’ position out of employers and employees. Whilst it has firmly been with employees for a number of years, it is now swinging the other way due to the cost-of-living crisis and continued geopolitical tensions,” comments Sirsha Haldar, Managing Director, ADP UK, Ireland & South Africa. Because of this, businesses will have to work extra hard to keep hold of talent in 2023.

Many businesses are looking at implementing more frequent payment cycles to ease the cashflow burden on staff. Another is to ensure pay parity, as pay discrepancy remains one of the leading causes of staff resigning. However, it can be difficult to achieve across multiple geographies with different inflation levels. It's imperative businesses in 2023 maintain competitive wages that are aligned with shifting living standards, accurate payroll is key.

Whilst salary level will remain a priority as the cost-of-living crisis continues to bite, employers need to navigate new expectations of flexibility, job roles, and purpose. Workers this year will increasingly want to work for companies that align how they see the world. Passion will also be a driver.

  • Global Mobility & Hybrid Working

Part of the issue for businesses looking to retain staff is that global mobility continues to rise. There are an estimated 35 million digital nomads worldwide [1], with countries such as Croatia, Portugal, and Indonesia actively encouraging non-citizens to live and work under digital nomad visas.

ADP® Research Institute’s People at Work 2022 data showed that nearly two thirds (63%) of 18–24-year old's and six in ten (61%) of 25–34-year would consider looking for another job if their employer insisted on a full-time return to the workplace. Overall, 59% of the UK workforce have already, or would consider, looking for another job if their employer stipulated that they must come in to work on the premises every day. These statistics are expected to increase in 2023.

“Rather than fighting the trend, savvy organisations are seeking to remove borders to open the talent pool. They are also looking to offer flexible working conditions with both location and the number of days staff must work,” explains Halder. “Today, a quarter of workers say the ability to work from any location is the number one remote work benefit [2] . Allowing staff to work remotely, coupled with the increasingly popular four-day-working-week, allows businesses to provide an attractive package for workers without the need to increase wages.”

Having honed the ability to adapt over the past few years, employees expect new approaches from employers on how work gets done and how they can advance in their career journeys. To help prevent employees quitting this year, it is important that UK businesses provide an environment that is aligned to their staff’s changing priorities.

  • DE&I at the core of every business

It is important that businesses go beyond simply providing lip service. To truly show support, the focus on DE&I must be integrated into the very fabric of an organisation from the boardroom to the shop floor. That said, there's no time like the present to get started. “It is imperative that business leaders accelerate efforts to identify and close representation gaps through diversity, equity, and inclusion (DE&I) initiatives,” adds Halder. “In addition, businesses must get better at prioritising the mental, physical, and emotional health of staff. By emphasising a commitment to employee wellbeing and taking action to back up these promises, a business can establish the workplace as a safe space and foster loyalty.”

To best serve their staff, businesses must first understand them. In 2023, it will be important for businesses to invest in the requisite payroll and HR tools so that they can focus on their people while ensuring compliance, security, and service continuity. These tools need to be intuitive for the employee too so that they can enrich their experience to drive deeper talent engagement.




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