Research Says Recession Fears, Talent Crisis Foretell a Turbulent 2023

Businesses are sure to face a tumultuous year ahead due to a conflict between economic uncertainty and employee demands. Recession fears prompt belt-tightening, and employers may reduce staff, freeze hiring or slow investments that were promised to improve the wellbeing of their employees, according to 2023 predictions from business research and consulting firm Forrester.

In 2022, Forrester’s Future of Work team answered hundreds of questions about recruitment and retention, remote work, burnout, culture and employee experience. The number and urgency of the inquiries has increased as the economy becomes more uncertain.

With so much at stake, Forrester recently predicted:

  • Employers will face a confusing recession amid a labor shortage – J.P. Morgan, PepsiCo, Tesla and others have already frozen hiring or laid off employees. However, Forrester research shows demographic changes, and the ongoing impact of COVID-19 will keep the labor shortage going during a tight economy. “The outcome is a bullwhip effect in the talent market: Actions that respond to a constraint create an overcorrection in the other direction, keeping the market out of balance.”
  • Employers may slow investments in employee experience ­– Employees are expecting more from their employers. Forrester says the high number of resignations in 2022 were the continuation of a decade-long trend of cultural and generational change that should not be ignored. “Some organizations and even entire industries are getting blowback from employees over these changing expectations: Over one-third of U.S. private sector resignations in the past year were in frontline industries like accommodation, food services and retail.”
  • Employers that try to reverse remote work may face ‘acute confrontations’ – Forrester research shows that 66% of U.S. firms have adopted hybrid strategies, but 49% expect to alter their approach. “In 2023, we predict acute confrontations in the companies that don’t listen to and collaborate with employees in shaping hybrid-work policies. And half of those who try to tighten up their policies will fail.”

 

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