What´s in store for us in 2023?
What are the issues that leaders and HR must focus their attention on in the new year? I will give a brief overview of the conversations I had with top managers, HR executives and also entrepreneurs in the last weeks of December.
Happy New Year to all our customers, partners and friends! Dramatic 2022 is finally over, and as one IT entrepreneur said: considering where we come, the 2023 will be a far better year 😊 If the previous one brought us Ukraine war, rising prices, rising Euribor and fears of a new recession, what are the issues that leaders and HR must focus their attention on in the new year? I will give a brief overview of the conversations I had with top managers, HR executives and also entrepreneurs in the last weeks of December.
Coping and (mental) health of employees
The coronavirus crisis that began in 2020 brought about major changes in the way people live. Companies were more likely to make short-term plans and were ready to react quickly if the situation required it. The war in Ukraine that began in 2022, difficulties with supply chains, rising input prices and changes in the monetary policy of central banks are already threatening us with a new crisis. It is felt that people need peace, less worry and less uncertainty about their future and their jobs. This is especially challenging in organizations that are themselves in a whirlwind of change. How to manage all this effectively? In situations of uncertainty, the desire of workers to be informed is growing.
Wages
How much can we increase wages in the new year? How expensive is life in Estonia? What will happen in the economy and how will all this affect our business? To quote one HR manager: wages need to be raised because people do a good job and because their remuneration should be either at or above the market level (depending on the position), due to the increase in the cost of living. It is very difficult to put together a budget in such circumstances. Especially if you do not know how long the instability will last. Communicating salary increases is always a precision job, and now that the changed cost of living raises people’s expectations to a very high level, it is even more difficult to communicate about wages.
It is probably difficult for some organizations to keep up with inflation when raising wages (but this has also been the point of raising ECB interest rates – limiting consumption and, through this, curbing inflation). The decrease in orders in certain sectors brings concerns to sales organizations, in whose employee pay schemes the result component has played a very large role. How to maintain the competitiveness of the company in the labor market and keep its best salespeople when the market is (temporarily) frozen?
Employee retention
There are sectors where high employee turnover (e.g. customer service) is still being combated, and its continuation is also predicted by 2023. year. Several executives admitted that in the second half of last year, employees became more cautious about changing jobs. There has been a growing concern about keeping one’s job. An ongoing theme is the development of leadership skills among middle and first-level managers, which is seen as one of the important influences on employee commitment and productivity. It is believed that there will also be headhunting of talents from their organisations in the new year. A repeat of 2009 is unlikely to be considered – people in Estonia have developed savings and companies have capital buffers.
Investor relations
Uncertainty about the future and rising prices for money have increased the caution of financiers about new investments. This concerns not only start-ups, whose activities depended on donors for many years, but also companies with a positive cash flow and a long history of operation. It is necessary to take into account: there will be competition for money, new business plans need to be introduced in more detail, raising money may take more time.
A crisis always offers opportunities
I recently had a conversation with a top manager who, with his team, was so successful in 2009. as well as in the crises of 2020, invested heavily in business lines that had fallen off in the market (in the first case, investment services, and in the second, horeca business line). Emerging from the crisis, they were several steps ahead of their competitors. However, you can invest if the company has money. It is worth having a long-term plan and using market downturns to buy/develop new assets/businesses more cheaply into the portfolio. The big question on the table of (business) strategists today: what opportunities will the year 2023 offer us? Don’t we miss anything?
Restoring a sense of teamwork after the corona crisis
There are companies that are still focused on restoring a sense of teamwork, which was torn apart by the coronavirus crisis. The themes of 2023 are the recognition of the employee and his noticing, which has been quite difficult to do in the home office format. While in the darkest moments of the corona crisis, it was said that the home office has come to stay, today there is an increasing emphasis on flexibility in this matter: the employer offers a home office to me as an option.
