As 2023 draws to a close, we look at the six trends that have defined the year from an HR perspective.
1. The Big Return
If the period between 2020 and 2022 was all about remote working, 2023 was all about the return to the office. As lockdowns and restrictions became a thing of the past, more organisations decided that it was time for their employees to come back to the workplace.
But, with most employees now favouring remote work – at least some of the time – many, if not most, organisations favoured moving to a hybrid model whereby employees worked from home some of the time and were in the workplace for some of the time, too.
As we wrote earlier this year, generally speaking, there were three approaches businesses took: the fixed model involved employees working from home only on set days; the flexible model allowed them to work from home when it suited; and the ‘office first’ model required employees to be in the office most of the time.
Which model your business takes should depend on the type of work you do, the employees you have, and the kind of workplace culture you want to build.
2. The rise and rise of AI
With ChatGPT launching late last year, perhaps nothing has commanded more headlines in the media throughout 2023 than artificial intelligence (AI). AI is beginning to make a big mark on HR, with applications such as Jemini taking care of payroll processing and even long-term staples such as Xero incorporating AI.
We expect that the rise of AI will be a trend that continues through 2024 and beyond, with AI becoming more accessible and rolling into more core HR practices, potentially including recruitment, performance management and more.
How this shapes the role of HR practitioners will be one of the big issues in our sector over the next few years.
3. Reining in costs
With interest rates rising and cost of living pressures beginning to bite, 2023 was a year where many businesses also decided it was time to rein in their spending around HR. We noticed this tended to take two main forms.
First, a lot of employers who faced labour shortages in 2021 found that they had to pay unprecedented salaries to attract new staff. This year, with clients and customers spending less, some were left wondering how to reduce their wages bill. Some put a freeze on new hires; others were left wondering whether they could even cut pay.
Second, more businesses chose to streamline their HR processes, often looking to adopt new software (including HR applications) or outsource some of their HR functions. Over the next year, we believe more businesses will be analysing their HR operations, working out what they do best, and outsourcing the remaining tasks.
4. Closing the Loophole
One of the most significant and most talked about reforms of 2023 was the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023. Introduced by the Albanese government in September, the Closing Loopholes legislation aims to change any technicalities in the federal law that currently could allow employees to undermine pay and working conditions.
While the Bill hasn’t yet passed through the Senate (it will debated in the Upper House in February), it’s likely to make some genuine changes to Australia’s employment laws. These include defining the contractor/principal vs employee/employer relationship, as well as changing the law around casual employees.
5. Fair Work Act Changes
The Closing Loopholes legislation wasn’t the only legislative talking point over 2023. At the end of last year, parliament passed the Fair Work Legislation Amendment (Secure Jobs Better Pay) Act 2022, which also introduced some important changes to our employment laws.
These included provisions prohibiting pay secrecy (these are contract terms that prohibit employees from discussing their remuneration), enshrining domestic violence leave, preventing sexual harassment and strengthening discrimination provisions.
Coming into effect in four stages between December 2022 and December 2023, they generally introduced new employee protections into the law.
6.The Four-Day Work Week
During Covid, a lot of employers and employees agreed to reduce working hours. A lot of workers found this gave them a new balance between work and life outside work. And so, the four-day work week began to take off.
Over 2023, a global campaign to institute a four-day work week really began to gather momentum, with several major companies announcing they were trialling it – and for good reason. Studies show that a four-day work week could make employees more productive. And, in an age of reining in expenses, it could also be a more cost-effective way to attract and retain great staff.
With that in mind, this is yet another trend we see that is not going away any time soon. We expect many more organisations will move to a day work week over 2024.
If you’d like to know more about the HR trends impacting Australian workplaces right now, get in touch.