This year, companies are playing tug-of-war with employees over return-to-office policies while also battling the competition for the best tech talent. In particular, employers are finding creative ways to adjust their hiring strategies in order to attract and retain talent in a pool that has shrunk over the last two years. As economic uncertainties loom large over 2023, ZDNET examines how these trends might shape the workplace over the next 12 months.

Retention through upskilling

In 2023, workers can expect their employers to invest more in training and upskilling programs to equip them with the skills they require. Jamie Kohn, research director at Gartner HR, says companies will need to look into internal upskilling to compensate for the growing talent shortage. “Companies are focusing a lot more on their internal labor market and thinking about how they can take high-performing employees and move them into positions where they need them more, so thinking about upskilling programs as part of an internal mobility strategy is really important,” Kohn tells ZDNET. According to Kohn, employees want to learn skills that benefit them in their current jobs and their careers more broadly. Opportunities for career development and growth are an integral part of retaining employees, she says. “People want to grow beyond just their role. They’re thinking about growth across their entire career. If you can’t offer those expanded growth opportunities, then you’re definitely going to struggle and lose people.” The same study found that 74% of employees are willing to leave their current job due to a lack of skill-building and career-mobility options.  Also: When it comes to tackling the skills shortage, employers are obsessing over the wrong thing “In today’s employee-driven job market, employees feel empowered to seek out an employer that truly supports their long-term career goals and ambitions,” commented Dan Schawbel, managing partner at Workplace Intelligence. “Companies that recognize this and provide a high level of support – from more time for skills development during the workday to better learning benefits and programs – are going to stay one step ahead in the ongoing war for talent.”

Hybrid and remote working aren’t going anywhere

Despite many companies encouraging employees to return to the office, employees aren’t letting go of hybrid and remote work. And with a recession threatening to further increase the cost of living, workers don’t want to spend extra money on gas, lunch, and their morning macchiatos.  Paul Silverglate, vice chairman of Deloitte’s US technology sector, says companies that haven’t fully embraced remote and hybrid work will cite an economic downturn to justify return-to-office policies next year. Companies that have embraced new ways of working, meanwhile, will find solutions to continue hybrid and remote working policies and make them better. Conversely, Simon Roderick, managing director of financial services at Fram Search, argues that not every industry will be hit hard by an oncoming recession, and suggests it would be a mistake to revoke remote or hybrid-working options. “Hybrid has worked brilliantly for most service-based firms and, given there is still a skills shortage, is a must for most firms’ retention strategy,” Roderick tells ZDNET.  “Not all sectors will suffer a hard recession and so it’s advisable not to alienate teams by taking away flexibility, but some will, and we all know the economy will generally slow in 2023.” Roderick believes an overarching theme for the workplace in 2023 will be adjusting how employees work remotely. He says there could be an uptick in surveillance for remote workers that will allow managers to observe productivity, and executives could enforce return-to-office mandates as a reaction to a slowdown in business. “If the three ‘R’s of 2021 and 2022 were retirement, resignation, and relocation, the three ‘R’s of 2023 could be returning to the office, recession, and readjustment,” he says. “The world of work has been through huge changes since the pandemic, and it would be good not to see the positives of this change undone by a recession.” Silverglate believes that technology, office redesign, and sustainability will all propel hybrid and remote working in 2023. Video conferencing became a staple in work-from-home practices, but VR is emerging to make the experience more immersive and productive. “When many are in person and a team member needs to be virtual, VR technology can truly reduce the perceived gap between the two, which is one of the largest complaints I’ve heard about the challenges of traditional video-conferencing technology as it relates to hybrid teams,” he says. James Ross, managing director of Hype Partners, agrees that VR will become more integrated into hybrid work to accommodate workers feeling disconnected from their peers. “As more of us opt for the flexibility of working from home, virtual experiences will be vital to improving workplace cohesion and helping employees feel more connected to each other,” he tells ZDNET.  “A virtual tour of the office on your first day? A quick game of mixed reality fencing on your lunch break? A team outing in Roblox? We all feel the need to have fun with our colleagues and I’m curious to see how that develops virtually.” Also: Bored of office life? Here’s how the metaverse could transform your future job Ross believes that, as the metaverse becomes more tangible, Big Tech will find ways to get in on the action. With companies such as Microsoft, Google, and Samsung all investing heavily in the VR/MR/XR market, Ross expects a big boom in VR for hybrid work. “Microsoft has similarly been making strides in the space, integrating virtual avatars into its remote work tool Teams,” he says. “The competition among these big hitters and Google is likely to come to a head in 2023, so I expect a massive shift in this area.” Many offices are also ditching cubicles and other traditional layouts now that people can complete their work at home. Silverglate suggests that office redesigns in the coming years will foster collaborative work and more thoroughly reinvent the office experience.  “We are already seeing and hearing design firms start to address how to redesign and repurpose all types of corporate space that can flex to where the industry is at any given point in time. Particularly, we are seeing office space be more focused on teaming and collaboration and less on independent work which can be done remotely.” Full remote-work options have slightly declined over the past year, but remote work can’t be totally ruled out in a post-pandemic work environment. More companies are pledging to decrease their carbon emissions, and Silverglate thinks these pledges will encourage companies to uphold their remote-working options in the future. “I think remote work will never go back fully to where we were in the past,” he says. “We should not underestimate the sustainability factor here. As more and more companies commit to being carbon neutral by 2040 or 2050, reducing the carbon footprint of commuting and business travel is an important lever.”

Work-life balance is as crucial as ever

Hybrid and remote work offered something employees hadn’t received much before the pandemic: more balance between work and their personal lives. It’s usually the first benefit employees cite when asked why they enjoy working from home.  Working from home allowed employees to designate certain hours for uninterrupted work, while still being able to tend to their personal obligations. And as returning to the office becomes more mainstream, Kohn believes employees don’t mind where they work, but it’s essential to dictate when and how they work. In 2023, Kohn thinks employees will pay more attention to how much flexibility their job offers, and that flexibility will be a condition people work under. Companies that don’t have flexible work schedules risk losing out on top talent. “It’s not so much that people want to work from home, but having the flexibility to shape their work around their lives is so essential to people,” she says. “If you want to retain people long-term, you have to think about how you’re going to offer that flexibility.” Also: Want flexible working or better benefits? Here’s how to negotiate with your boss And as the buzz continues around four-day workweeks, some companies are recognizing that shorter workweeks are a sure-fire way to offer employees a better work-life balance. Four-day workweeks don’t threaten worker productivity to the extent naysayers claim, plus they allow workers more time to rest and spend time with their families. Charlotte Lockhart, founder and managing director of the 4 Day Week Global Foundation, predicts that four-day workweeks will become more common in 2023. She explains that even if some companies can’t commit to cutting out one whole day of the week, shorter working hours will be just as popular next year.  Lockhart points out that four-day workweeks were previously reserved for private companies looking for a change. But now, local governments are getting involved and experimenting with shorter workweeks too. US congresspeople proposed a shorter workweek, solidifying the sentiment that decreased working hours are highly popular. “The response we’ve had up until now has been from private companies doing it. But we’re now starting to see local governments and some civil service organizations doing it around the world,” Lockhart tells ZDNET. “In my opinion, we’ve reached the tipping point where the prevalence for 2023 will be quite significant. It’ll become a lot more normal, and it will become a sort of thing we do as a new way of working across a number of economies.”

Tech in 2023: We’ve analysed the data, and here’s what’s really going to matter Cybersecurity: These are the new things to worry about in 2023Cybersecurity, cloud and coding: Why these three skills will lead demand in 2023 Technology spending will rise next year. And this old favourite is still a top priority Employers want tech skills, but you don’t have to be a developer to get a better jobThree tech trends on the verge of a breakthrough in 2023Tech in 2023: 6 new priorities for your shortlist