5 Challenges CHROs Will Face in 2023

2022 was a difficult year for HR teams. Between the ongoing pandemic, remote work, workplace inequities, the Great Resignation, talent scarcity, inflation, and an upcoming raise cycle, you’ve had a lot on your plate.

And despite all of the new demands placed on your team, you may not have been granted the resources you need to adequately manage them.

2023 is shaping up to be another challenging year, but there are many ways to overcome those challenges — and even make opportunities out of them.

1. Adapting to remote, hybrid, and flex work

Flexible work options — like remote work and the four-day work week — are here to stay. And for all the benefits they afford, they also bring some challenges. For example, how to manage remote pay, identify and address proximity bias on hybrid teams, and measure the impact of these arrangements.

HR leaders can overcome these challenges by clearly communicating company policies around these flexible work arrangements. A multi-channel communication strategy can help. Have an open meeting to share your company policies and answer questions. Follow up with an email including commonly asked questions and answers. Then provide an internal reference — such as a wiki or chatbot — with these answers.

You may also want to track performance ratings and promotion rates by flexible work cohorts to identify patterns and address issues. For example, track whether remote team members are promoted at the same rate as their office-based colleagues. Or if you offer a four-day work week to some employees and not others, measure performance ratings for each group to understand how the program is performing. 

2. Developing effective leadership and managers 

It’s not enough for your managers to be functionally effective. Modern, effective management is personal and personalized. 

According to Gartner, great leaders share three key qualities:

• Authenticity. Act with purpose and enable true self-expression for themselves and their teams.
• Empathy. Show genuine care, respect, and concern for employee well-being.
• Adaptivity. Enable flexibility and support that fit the unique needs of team members.

You need to develop human-centric leaders who will connect with their team members and learn to balance responsibility with personal relationships. And then you need to communicate about those leadership development opportunities and priorities with your team members.

Again, a multi-channel communication strategy can help you get the most out of a leadership development program. Hold an open meeting for your managers and manager candidates to talk about your company’s leadership training opportunities and help them understand how they can get more support. Follow up with an email that includes more information about the programs and the different ways your company offers support. Then add that information to your internal communications tool so team members can access it as needed.

3. Hiring and retaining team members

Hiring and retention have been some of the biggest challenges in 2022 and they’re not likely to be going away any time soon. Many HR leaders now have the added challenge of dealing with layoffs and hiring freezes, as well as the collective employee stress that so often accompanies economic uncertainty. This can lead to additional churn and exasperate recruiting challenges.

Companies are starting to understand that retention is more important than recruiting. It’s economically better for the organization and it’s better for continuity. 

Employee experience is your path to greater retention. A great employee experience makes it more likely that your employees will stay in your organization, helping your company grow and be successful.

4. Improving the employee experience

Between longer work hours, global catastrophe fatigue, and looming economic uncertainty, it’s no surprise that 52% of workers are feeling burned out. This can make your team ineffective, lead to turnover, and negatively impact the employee experience.

You can overcome some of these challenges by Investing in some key areas:

• Career growth. One of the top reasons people leave an organization is that they don't see a path for career growth. Build career ladders and share them with team members so they understand their opportunities for advancement at your company.
• Benefits. Your benefits are a big part of the employee experience, so it’s important that they’re equitable. Different life stages and lifestyles can warrant different benefits. Build a competitive benefits package that offers value to different kinds of people at your organization.
• Flexibility. Work flexibility can help your team members integrate their personal and work lives. This is more than how and when team members work — it can also encompass the way you structure job roles or manage internal mobility.
• Connections. Companies are made up of people who want to help each other, support one another, and celebrate successes together. Make it a point to facilitate and support feelings of connectedness between team members and to the organization. 
• Transparency. A little transparency can go a long way. Make sure that every employee has a clear sense of how policies that affect them are made. This might include why policies are created, who’s creating them, and how often they’re reviewed. 

This all comes down to trust. Your team members spend a lot of their time working for your company and they want to feel that your organization is the right place for them. 

5. Addressing pay and compliance legislation

There have been a lot of recent changes in pay equity and pay transparency legislation, creating new challenges — and opportunities — for HR leaders.

For example: 

• Salary history bans are becoming more common. Salary history bans currently exist in 21 states and another 21 localities. Using salary ranges to set employee compensation is a great way to improve pay equity within your organization.
• More jurisdictions are requiring pay ranges in job postings. New York City recently enacted a pay range requirement for job postings, and California’s pay transparency legislation will go into effect January 1, 2023. When done correctly, sharing pay ranges can help you attract talent and build trust with your team members.
• Reporting on representation. Some legislation requires employers to share employee demographic data. For example, California employers must report on the number of employees by race, ethnicity, and sex in specified job categories and how they fall within pay bands, as well as the average pay for each demographic group. Employers should measure and track representation and mobility to ensure internal equity around pay and opportunities.

Final thoughts on challenges CHROs will face in 2023

The world of work has seen significant changes in the past few years and will, no doubt, see more in the coming years. These lead to new challenges for HR leaders — as well as for many of your team members. 

The single best thing you can do is communicate with your team members to learn how you can best support them and share internal changes that will affect them. An effective communication strategy can ease workplace transitions for everyone and help you become a more strategic people leader.