The majority (75%) of HR professionals stated that mental health and wellbeing would be the most important area in which to provide support to staff in 2023, according to research by WorkNest.
The research, conducted at the Chartered Institute of Personnel and Development (CIPD) annual conference in November, surveyed 105 respondents who cited the cost-of-living crisis (70%) and retention of staff (69%) as the biggest challenges for 2023.
Other key challenges included recruitment (55%), skills shortages (34%) and employee engagement (24%).
In addition to mental wellbeing, respondents said 2023 would see a need to focus on performance management (50%), diversity, equality and inclusion (48%), and hybrid or flexible working (48%).
The vast majority (92%) of respondents planned to use analytics to drive their people strategy over the next year.
Almost two-fifths (37%) said their budget for HR technology would remain the same in 2023, and 34% had no certainty over their budget, but 29% expected it to increase.
Despite cost-of-living concerns being front of mind, 49% said their organisations were not looking to make cost savings. Nevertheless, 18% said they would be looking to reduce headcount, and 10% were pausing recruitment.
Hannah Copeland, HR business partner at WorkNest, said: “HR teams across the UK have a challenging year ahead. The cost of living is at the top of everyone’s mind regarding how they manage and support their employees through this difficult time. Unfortunately, many businesses will be forced to make cuts and may encounter tremendous retention and recruitment issues as employees look to improve their salaries in the face of rising costs.
“Keeping employees engaged, having regular conversations with them to understand their worries and supporting them with mental health and financial wellbeing will be critical over the next 12 months…The next year requires HR to be smart by being more efficient and using people analytics to find the root cause of certain issues.”