How Leaders Are Preparing to Address Their Workforces in 2023

Throughout recent years, there has been a revolving door of new challenges, more barriers, and greater disruptions in our workplaces. As we enter 2023, it appears there are many hurdles still to come, with a new buzzword coming out of the discussions at the 2023 World Economic Forum (no, it is not the emergence of “Chat GPT” and continuous progress toward automation). Globally, we are entering a polycrisis.

A polycrisis is the simultaneous occurrence of multiple crises – such as economic, political, and environmental – that have a compounding effect, exacerbating each other and making it more difficult to address each problem individually. Relating this to our workforce has direct parallels. With companies strategizing how to juggle hybrid work demands, the Great Resignation, climbing inflation costs, and a slowing economy, we must reflect on the question: how are leaders preparing to address their workforces in 2023?

Why Work Matters

Leaders will have to recognize the value of employees understanding why their work matters. There has been a lot of progress made within workplaces as a result of the questions “what can we do for you?” and “how can we best support you?” However, there is more to be addressed regarding why a person’s work is meaningful. In fact, research has shown that “70% of workers want to know that their work matters and, pre-pandemic, workers who found their work meaningful stayed at their current job[s] an average of 7.4 months longer than those who did not.”

To create a workplace that matters, organizations need to focus on creating cultures of inclusivity and belonging, where all employees feel valued and respected. This can be achieved through effective communication and transparency, opportunities for employee input and participation, and a clear alignment between individual goals and organizational mission and values.

70% of workers want to know that their work matters

Growth on the Horizon

Leaders will soon be reminded of the importance of investing in talent. Despite concerns surrounding the economy and rising inflation, 85% of the chief executive officers recently surveyed by Deloitte believe that over the next 12 months, modest to very strong growth will occur within their companies.

Work Environment Shift

Many remote and hybrid work environments, which once ruled the candidate market, are slowly expected to transition back to the office. McDermott + Bull President Brandon Bieganzahn composed an article on our firm’s 2022 executive search year-in-review where he provided key takeaways for leaders as they continue to navigate the current market. His findings presented below showcase that a majority of our completed searches were either remote or hybrid last year. Yet, he mentions that this virtual job flexibility is expected to change some as we see the return-to-work movement take off in the coming months.

Remote and hybrid working arrangements comprised more than half of the executive-level searches we executed in 2022.

The takeaway here is that remote and hybrid working arrangements are a massive currency for candidates. Data shows that searches conducted for remote roles were completed 14% faster, placing candidates into roles more than two and a half weeks sooner. We are seeing a groundswell of momentum in the return-to-work movement, and we anticipate seeing completely remote roles on the decline and companies mandating a minimum of three days a week in the office.

Compensation On the Rise

Cross-referencing McDermott + Bull’s 2022 data with that of McKinsey and Thrive, we can triangulate that:

30% COMPENSATION INCREASE

Nearly one-third of job changers at the executive level are seeing a compensation increase of 30%, with an average increase of 24%.

13% PREMIUM ON IN-MARKET CANDIDATES VERSUS OUT-OF-STATE

In-state hires have become more expensive, experiencing a 13% premium over remote candidates. This further represents the cost-savings that accompany remote candidates.

22% PREMIUM ON “LARGE COMPANY” CANDIDATES

Candidates hired from “large” companies (with 1,000+ employees) come with a 22% premium over candidates from smaller businesses. Larger companies have combated wage inflation, not with increased base salaries – as those have remained relatively static – but with larger variable components. Thus, candidates coming from larger companies have inflated compensation expectations.

What Leaders Can Do

Align compensation offers with the market standard.
Find avenues to accommodate flexible working arrangements.
Ensure high-potential employees have career maps and see opportunities for advancement.

Given that businesses now operate in an ever-changing market, there will undoubtedly be unexpected changes in the coming year to which leaders will have to quickly adapt. Emphasizing to employees why their work is impactful, preparing for expansion, transitioning toward in-person work, and anticipating a rise in compensation are just a few of the predicted changes facing leaders. Leaders can better prepare to address their workforces using the data and suggestions provided in this article. Feel free to reach out if you have any questions or would like to connect; I’d be happy to chat with you.

About the Author

Colin Dolson
Principal
cdolson@mbexec.ca

As Principal at McDermott + Bull’s Vancouver office, Colin brings nearly a decade of experience in the recruitment industry. He has a strong track record of success partnering with client organizations to deliver game-changing, diverse talent in a multitude of industries, including nonprofits, professional services, crown corporations, tourism, and mining.