2023 – Another Year of Change

While we await the Department of Labor’s final decisions on the Independent Contractor Rule and changes to the Fair Labor Standards Act, a review of some selected topics looking forward to 2023 by HR thought leaders might be in order.

Transparency

Many of the HR thought leaders point to the growing statutory trend requiring pay transparency. Several states including Colorado, California, New York, Connecticut, Rhode Island, Maryland, Nevada, and Washington, as well as several local municipalities, have enacted laws requiring the inclusion of pay rates and/or salary ranges in job postings. These thought leaders believe that this transparency should lend itself to employment-related matters beyond pay and include information to candidates (and employees) related to corporate stability, major business initiatives, and career advancement opportunities. They advise that employers be proactive and start these initiatives now.

Attracting and Retaining Employees

Attracting and retaining employees will continue to be a challenge in 2023. Benefits and opportunities for development will remain differentiating factors impacting candidate choices in making their selections for accepting a position. We will see a continued focus on benefits such as additional paid time off/PTO benefits, paid family leaves, student loan repayment programs, and even some inquiries around including crypto as part of investments. Many companies are expanding their “menu” of benefit offerings to include critical illness coverages (think cancer, transplant, etc.), family planning services (adoption, IVF, surrogacy benefits plans), and childcare assistance/reimbursement. Additionally, opportunities for both career and personal growth are at the forefront for companies leading the way in benefits.

Flexibility, balance, and well-being continue to be a growing concern among workers. Organizations that are able to focus on getting the work done, rather than when and where it is being done will have an easier time attracting and retaining employees.

Unemployment

The Conference Board projects that unemployment will increase a percentage point from the reported 3.5 percent in September 2022 to close to 4.5 percent in the first half of 2023. This equates to job loss of approximately 900,000. And, while it is a significant number, it is a relatively low number when compared to the 14.3 percent during the COVID recession. There may be some easing of labor shortages as the demand for workers decreases, but recruitment and retention challenges will not abate as companies prepare for economic growth following the anticipated recession.

4-Day Workweek

Finally, California congressman, Mark Takano, wants to see a major change: a legislated four-day workweek. Takano introduced the 32-Hour Workweek Act in July, which would not force employers to shift to a four-day workweek model, but rather, to begin paying their employees overtime after 32 hours.

This legislation follows a six-month, four-day workweek trial conducted in the United Kingdom. Findings from 4 Day Week Global show that for many it is a fairly smooth transition. Overall, the trial found no productivity loss associated with a four-day workweek pilot program with some companies reporting significant improvements, corroborating earlier findings. The U.K. study found that the four-day week freed up employees’ personal time, boosted their well-being, and made them more productive during working hours.

The concept of a 4-day workweek has been toyed with before–it was introduced in the 1970s but never gained traction. It remains to be seen whether Congressman Takano’s bill will fare any better.

As we have experienced over the last years, change is inevitable, and so it will be with 2023. As it always is, it will be interesting to see how it all plays out.

Cheers!