The Biggest HR Issues of 2023
From AI to hybrid work to legislative reform, 2023 was a big year in the world of HR. Merilyn Speiser from Catalina Consultants looks back at the six trends that 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.
With most employees now preferring to work remotely at least sometimes, many organisations have moved to a hybrid model of working. This model allows employees to split their work between home and the office.
Businesses adopted three main approaches to hybrid working: the fixed model involved employees working from home 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 implements should depend on the type of work you do, your employees, and the workplace culture you want to build. See our article on hybrid work models for more.
2. The rise and rise of AI
Perhaps nothing commanded more headlines in the media throughout 2023 than artificial intelligence (AI), following the launch of ChatGPT in late 2022. 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 continue through 2024 and beyond, with AI becoming more accessible and rolling into more core HR practices, such as recruitment, performance management and more.
How this shapes the role of HR practitioners will be a major issue in our sector over the next few years.
3. Reining in costs
With interest rates rising and cost of living pressures beginning to bite, many businesses have had to rein in spending around HR. We noticed this tended to take two main forms.
A lot of employers who faced labour shortages in 2021 found that they had to pay unprecedented salaries to attract new staff. With clients and customers spending less in 2023, some employers 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.
Additionally, more businesses chose to streamline their HR processes, looking to adopt new software (including HR applications) or outsource some of their HR functions. Over the next year, we believe more businesses will analyse their HR operations, work out what they do best, and outsource the remaining tasks.
4. Closing the Loophole
One of the most significant and discussed recent reforms was the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023. The Bill was introduced by the Albanese government in September, and promised 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.
Part one of the “closing loopholes” legislation passed on 14 December 2023, covering areas such as wage theft, “same job, same pay” regulated labour hire arrangements and union delegates rights. Part two is currently under discussion. See Tom Earl’s update for more detail.
5. Fair Work Act Changes
The Closing Loopholes Bill wasn’t the only legislative talking point over 2023. At the end of 2022 the Federal 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 (contract terms that prohibit employees from discussing their remuneration), enshrining domestic violence leave, preventing sexual harassment and strengthening discrimination provisions.
They generally introduced new employee protections into the law, coming into effect in four stages between December 2022 and December 2023. See Tom Earl’s update for more detail.
6.The Four-Day Work Week
During the height of the pandemic, a lot of employers and employees agreed to reduce working hours. Many workers found this gave them a new balance between work and life outside work. So, the four-day work week began to take off.
Over 2023, a global campaign to institute a four-day work week 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 four-day work week over 2024.