How businesses can plan effectively for 2023

As the new year approaches, it is business planning season. Many business leaders find fun in navigating unexpected challenges.

However, in the past few years, it seems a new "unprecedented" challenge lies around every corner. Today, these challenges include a possible recession coexisting with a labor shortage.

Proactive strategies can insulate businesses from the impact of these challenges and others that may arise in 2023. Rather than being caught off guard, leaders can prepare a strategy to keep corporate culture alive in a remote or hybrid work environment, attract the right people to navigate through an economic downturn and retain workers in a tight labor market.

Invest in culture

Culture can easily become an afterthought to planning if management does not recognize its importance to growth. LinkedIn's 2022 Global Talent Trends Report found 63% of jobseekers identified work-life balance as a top priority when choosing a new role, while 40% considered colleagues and culture a top priority.

When asked about the top areas for employers to invest in culture, over half of employees named professional development opportunities. Top areas also included valued flexible work support, mental health and wellness, training for managers to lead hybrid or remote teams and diversity and inclusion.

Though some businesses may choose to expand their budget for culture in 2023, effective HR teams can build a strong culture without a large budget. In fact, employees may grow cynical of companies who divert funds to bonding activities but fail to offer competitive compensation or engage in the daily work of culture building.

For instance, subsidized tuition or training program benefits mean little if employees are rarely promoted or considered for job openings. Ask employees directly about which low-cost changes could improve their experience and emphasize core values.

To further demonstrate culture is a priority, consider designating a member of the management team to oversee culture in 2023. This leader should meet with front-line managers often, lead professional development opportunities and watch for signs of burnout among employees.

Attract the right talent

Unlike years past, the labor market continues to find employers struggling to find candidates, who may not feel as beholden to traditional jobs as they once did. In fact, some candidates are even leaving their current jobs without another position at all. In March 2022, McKinsey found 44% of employees who voluntarily resigned from a job without another offer reported having little to no interest in securing a traditional job in the next six months.

Despite the Federal Reserve Bank's attempts to increase the labor participation rate by raising interest rates, employment numbers have shifted little this year. The labor market remains tight. To build the right team, employers need to show these candidates the value of a traditional job.

Of course, to attract the right talent, businesses need recruiters with knowledge, experience and connections. Evaluate time-to-hire numbers over the past year and ask recruitment teams if they need help to fill open positions. If the answer is yes, consider outsourcing recruitment to a recruiting agency or even a professional employer organization, which provides the full suite of HR services.

While some businesses with recruitment challenges are reluctant to spend on these services, those that do employ assistance save money down the line by finding the right candidates quickly.

Focus on employee retention

The last piece of the 2023 planning puzzle is worker retention. Culture plays a significant role in convincing workers to remain in their jobs, but even the best cultures may see lower retention if they fail to offer competitive compensation. When employees do leave, HR should leverage exit interviews for a candid perspective on their experience and the reasons behind their resignation.

According to Pew in July 2022, 60% of workers who changed jobs saw higher earnings as a result. Annual raises may not compete.

If a valued team member reveals an offer with a higher salary, employers should compare the cost of matching that offer with the cost of making a new hire. In some cases, matching the offer may be cheaper, pose less risk and boost morale as the team continues working with a colleague.

While no one can predict what lies ahead for business in 2023, leaders can position themselves to face challenges by building the right team and fostering a culture that maximizes productivity.

• Bob McIntyre is a director of service operations with Insperity, a leading provider of human resources offering the most comprehensive suite of scalable HR solutions available in the marketplace. For more information about Insperity, call (800) 465-3800 or visit www.insperity.com.