For the human resources (HR) industry, another year has quietly passed. If time seems to fly, it may be because HR professionals are constantly busy—dealing with the tail end of the "Great Resignation," managing budget tightening that emerged in late 2022, and facing discussions about a potential economic recession. Additionally, the evolving nature of the COVID-19 pandemic continues to profoundly impact HR priorities, as the pandemic has largely defined HR's core tasks over the past two years. HR leaders are still sorting out the pandemic's long-term effects on work practices, especially how organizations approach flexibility, remote work, and the role of hybrid arrangements.

The topics that dominated HR in 2022 closely overlapped with the concerns of CEOs, CFOs, and other C-suite executives. The pandemic may have demonstrated the critical role that people issues play in core business processes and goals. Now that HR has gained the attention of leadership, the industry must further demonstrate its value in addressing the challenges of 2023.

Here are five trends that may dominate the HR field this year.

Trend 1: Positioning HR as a strategic partner to leadership

Rebecca Kehoe, an associate professor of HR studies at Cornell University's School of Industrial and Labor Relations, points out that HR's core task is to collaborate with leaders to maintain influence over the organization's direction. "It's a two-way street," Kehoe says, but this does not exempt HR from stepping out of its comfort zone and understanding business needs. In teaching within Cornell's ILR master's program, Kehoe has found that such conversations have become a focal point: "We increasingly emphasize training students to understand business needs and ensure those needs are central to policies and decisions."

The same applies to senior HR executives. Reggie Willis, Chief Diversity Officer at Ally Financial, told HR Dive that engagement with management and leadership has been a core part of his work over the past few years. "For many HR leaders, the question is 'How do we provide this guidance?'" Willis says. "That's the million-dollar question."

This part of the work also includes communicating organizational priorities to employees. This has always been important, but it is especially critical after a year in which employees across multiple industries raised their voices. In 2022, public discussions on topics such as pay raises, leave benefits, and flexibility surged, and Kehoe expects these trends to continue. "At some point, every organization must determine how to respond to these trends," she adds. "From an HR perspective, it is particularly urgent to clarify HR's stance and role within the organization on various issues."

Trend 2: Flexibility—an opportunity for HR to prove its value

Transparency became a central theme in late 2022, demanded by both employees and regulators. Internal pressure is also building. A report from The Conference Board in October 2022 showed that investors expect company boards to develop clear human capital management strategies and link them to business and financial results.

Flexible work is just one opportunity for HR to engage with leadership and demonstrate transparency in 2023. Early in the discussions about reopening offices, Kehoe was surprised to find that many organizations delegated return-to-office decisions to managers, letting them determine the best arrangements for their teams. Some organizations may still take this approach, but "HR has found in many cases that managers themselves feel uncomfortable coordinating flexibility within their teams and are reluctant to bear the burden of such decisions," Kehoe says.

HR can instead play a supportive role, providing policy information, guidance, and support to managers who may not know how to handle flexibility. Willis says that Ally's HR department has partially achieved this by educating leaders on authentic, purpose-driven leadership strategies. "The key is adaptability," Willis says. "For some, returning to the office is an outlet—a necessary opportunity for collaboration and focused work." But he notes that the organization's core values must extend to wherever employees work.

Whether an organization decides to allow employees to work remotely permanently, partially, or not at all, it must take a clear stance—and HR can play a key role in shaping that stance, says Mike Lamm, Vice President of People at Monday.com U.S. According to Lamm, collaboration has been a focus for Monday.com's HR team over the past few years. The company shifted to fully remote work and has only recently begun opening physical hubs to support North American operations. In doing so, Monday.com has had to balance the in-person collaboration and community aspects it views as core to its culture while maintaining flexibility for employees. "Regarding office expectations, the overall strategy is that you have to take a clear stance," Lamm says. "What has worked for us and other companies is that transparency is exactly what employees want to hear."

The work goes beyond setting policies. Willis points out that HR needs to support leaders in managing changes brought about by flexibility and other trends. He mentions that Ally is committed to helping leaders think about what authenticity means, how to act with purpose, and how to express themselves. HR departments can discuss how to build trust with employees, ensure work gets done, and set up check-in mechanisms. "You have to understand how your team is engaging in this environment, how to provide channels for dialogue, and ensure the quality of work doesn't decline."

Trend 3: Driving through economic downturn with a sense of purpose

The U.S. economic outlook has been gloomy for months, and corporate layoff announcements have been frequent in early 2023. A recent Mercer survey of CEOs and CFOs shows that despite ongoing demand for skilled talent, many organizations are cutting recruitment budgets. In this environment, HR may need to refocus on purpose and its place in the modern organization. Willis says that as Ally reduces external hiring, purpose has been an important focus for the company. "What can we do for employees and people leaders to continuously instill thoughtfulness? What does it mean to be a human-centered leader? What does empathy mean?"

These questions may not be easy to answer, but staying focused on them is crucial as social and economic issues permeate the workplace, Willis says. To that end, he adds, employers should consider how to unite employees around a sense of purpose and community. Kehoe says purpose will become an important factor in attracting talent, whether it involves an organization's stance on external issues or its overall corporate purpose. Specifically, if employers clearly communicate how employees create value through their work, it helps employees feel a sense of meaning in their roles. "This gives employees something to hold onto and value in their daily work," Kehoe adds.

Other aspects of the employee experience also help foster a sense of purpose. Willis mentions that Ally's annual stock grant program is an example of aligning employee success with organizational success. "It creates a universal mindset that we all have a stake," he says. "We can all influence the stock price through our actions and our care for one another."

Trend 4: Talent operations shift inward

Kehoe notes that if organizations cannot expand hiring in the new year, many will need to reassess how to leverage their internal talent pools to meet future needs. This may prompt employers to recommit to employees' individual career development trajectories, a trend that could pose challenges for the industry. "If HR gets involved in this area, it is often limited to succession planning for senior positions," Kehoe says.

HR professionals don't need to build internal mobility programs alone. Instead, they can partner with frontline leaders to identify short- and long-term needs and assess whether those needs align with employees' career goals and skills. Additionally, HR can consider whether employees in one part of the organization could, through non-linear development, take on completely different roles or areas. Kehoe suggests a "lateral" approach to talent mobility, where employees not yet ready for promotion can develop new skills and qualifications to contribute in new ways. Other methods, such as job shadowing, may also be applicable.

However, managers may lack the energy to facilitate such growth, Kehoe says, and HR teams can step in to provide training, resource guides, and real-time support. Beyond internal talent pipelines, employers can also explore how to leverage alumni networks and customer organizations (such as suppliers) to find potential talent. "Hiring from trusted partners means you know the quality of the talent you're getting," Kehoe says. "It also strengthens trust with external partners."

Trend 5: Staying committed amid change

Despite the progress HR has made in raising the visibility of its work over the past three years, concerns about slowing momentum persist. Diversity, equity, and inclusion (DEI) programs have drawn particular attention; a 2022 Glassdoor survey showed that employee access to DEI programs in the third quarter of last year was 41%, down from 43% in 2021. Willis says he has witnessed these concerns firsthand. Commitment from senior leaders can help, and HR practitioners themselves may also need to reassess their approaches. "Be very clear about why you are doing this work," Willis says. "Challenge your organization to examine whether the current state will lead us to success; if not, how do we change course?"

Ultimately, founders, CEOs, and other leaders make business decisions and bear the consequences, Lamm says, and HR's role has the power to shape those decisions. "We finally have a seat at the table," he says. "But that seat is evolving. The emphasis on HR leaders in the early days of the pandemic made people realize the importance of this role."

Willis points out that HR departments need to hold themselves and the organization accountable to ensure they achieve previously set goals, especially in areas like DEI. Qualitative outcomes, such as the amount employers donate to charitable causes or the number of connections built with external community partners, are one way to measure progress. "Stay the course," Willis says. "Document progress and make sure you are measuring what you committed to."