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2023 Workplace Strategy: 4 Trends Changing the Future of Work


Lightbulb in an office
Image: Artur Marciniec - Alamy Stock Vector
The last three years of workplace strategy have been marked by historic disruption with pandemic lockdowns, the technical and managerial adjustments to a geographically-distributed remote workforce, and the subsequent hybrid work practices different verticals have embraced. It wouldn't be unreasonable to expect another year of big workplace changes for 2023. But I expect the workplace story of 2023 to closely mirror 2022, as workplace change slows for a number of reasons, and many leaders figure out the finer points of their hybrid work strategy.
Workplace leaders are trying to tweak their workplace strategies to meet the challenges of hybrid work while maintaining a robust employee experience in the face of troubling economic times and persistent recruiting challenges. Below, I explore several of these workplace trends.
1. The small office is the new big office: Pre-pandemic, nothing showed prospective employees that a company was a great place to work like a large headquarters filled with all the amenities imaginable (24/7 gyms, coffee bars, dry cleaning, etc.). Flashforward to today: many employees now see these offices not as a space to productively spend their working hours but as a time-wasting space or worse, a managerial threat to their employment.
Although the push and pull between employees and employer will likely continue, many organizations are looking at low occupancy rates for their offices, the sentiment around full-time office occupancy, and the cost of real estate — and seriously considering how much real estate is too much. For a look at recent occupancy numbers, property management company Kastle Systems reported that occupancy rates for 10 of the largest metropolitan cities in the U.S. is 48.2%, with the average hovering just around 50% for the better part of the year.
The office culture varies across the U.S. Certain cities are seeing higher occupancy rates (like Austin, Houston, and Dallas), many other cities are dealing with a surplus of unused office space. San Francisco – famous for its elaborate headquarter offices — has 27.1 million square feet of empty office space, according to a CNBC video report. Given the amount of open space in San Francisco, local government and real estate companies have come together to find ways of repurposing the unused space, which include converting commercial spaces to life science labs spaces and residential housing, CNBC added.
Despite some companies like Snap getting tough on return-to-office in the new year, others are projecting that many workplaces will hit a ceiling when it comes to occupancy rates. At the CoreNet Global Summit in November 2022, many commercial real estate professionals and thought leaders in the space seemed to be admitting that they’ll be operating with smaller real estate portfolios going forward. They seemed less focused on bringing more employees back to the office than they were on empowering the people who do come into the office. This brings me to the second trend ...
2. Physical offices will need to address disconnectedness, loneliness, burnout: The need for finding time to meet and connect with colleagues in person is going to be absolutely essential in 2023. But the goal isn’t to get people into the office just so they can sit on Zoom calls all day, the goal instead is to build workplace culture through shared experiences like celebrating achievements, to reinforce and foster work relationships, and to provide educational and upskilling opportunities for employees. (This was another insight that came from the professionals at the 2022 CoreNet Global event.)
The need for getting together in person is also important because of two crises: burnout and loneliness. Despite all the attention and focus on well-being in the workplace, workplaces have a long way to go before employee sentiment matches the goals of the new apps and services on the market. In a Work Trend Index survey of over 20,000 people in 11 countries, Microsoft found that 48% of global employees and 53% of global managers were feeling burnt out. Often employees also don’t feel like management is hearing their concerns, with less than half (43%) of employees saying their employer solicits feedback at least once a month.
Beyond the burnout, we are experiencing an epidemic of loneliness in the U.S. In a 2022 survey conducted by Morning Consult and commissioned by Cigna, they found that 58% of adults are considered lonely, with young people, those earning less than $50,000, and individuals from underrepresented racial groups all reporting a higher level of loneliness.
A simple way to combat loneliness is to have a close friend with who you can confide, and this friendship premium pays in the workplace. A 2022 Gallup poll found that employees who had a best friend at work are more likely to be satisfied with their current workplace (33% of employees with a best friend said they feel satisfied with their place of work, as opposed to 15% without a best friend) and less likely to find a new job (37% of people who had a work best friend were looking for a new job, as opposed to 49% who didn’t). The report added that these workplace dynamics became more distinct since the start of the pandemic.
However, the old tricks of getting employees back into the office — free pizza Fridays, beer on tap, and ping-pong tables — will not get people back into the office. As the Microsoft Work Trend Index survey pointed out, 73% of employees report that "they need a better reason to go into the office than just company expectations." Compelling reasons could be upskilling, mentoring, and career development — the types of training are typically easier/more seamless in person. To that point, Microsoft shared that workers who don't learn new skills often leave organizations, with 64% of Gen Zers and Millennials, 66% of those in upper/mid-level, and 69% of executives and senior staff saying the best way for them to develop a skill is by changing companies.
These factors, along with many others — the need for ad hoc collaboration, proximity to diverse opinions in a physical workspace, and even the benefit a change of scenery can have on creativity — will be reasons enough for workplace leaders to support a robust in-office experience. The challenge for workplace leaders will be one of messaging and ensuring that employees see the in-office experience as less a threat and more as a chance to reconnect with colleagues and an opportunity to advance their skill set. Yes, work relationships can be built online, they are also formed in office hallways, breakrooms, and onsite teambuilding events that are hard to recreate in a virtual setting.
3. IT and HR get (even) closer together: We saw HR and IT departments working in closer proximity well before the pandemic, and this trend will continue in 2023. This is especially true as workplaces address recruiting challenges in a tight job market and technology becomes an increasingly important part of workplace communication and collaboration.
Recently, AI programs like ChatGPT and DALL-E have been making the rounds in the media, exposing many people to the potential of AI technology. However, those involved in workplace-decision making have heard the steady market drumbeat of AI for years. In 2023, AI will become a broader topic in the workplace, and leaders across the organization, including HR, will look to it as a tool to help inform how they make strategic decisions.
One possible HR use case for AI will be in tracking employee sentiment and predicting when employees might be burnt out or about to leave the company, as shared in this SHRM article. AI-based systems can take employee surveys and structure the raw data into insight and also identify words or phrases within emails, group chats, and public employee forums that might indicate burnout or employee frustration. While not discussed in the article, this technology should also hold promise for recruiting, and identifying untapped pools of talent.
Though HR will be responsible for leveraging these AI-based sentiment analysis tools, IT leadership will need to be involved with their implementation and support and will need to ensure the data being fed into them is useful and not innately biased toward specific outcomes. IT can also find ways to integrate these various HR tools into an existing platform, including communications and collaboration platforms like Microsoft Teams or Zoom.
Beyond working together to better use AI technology, IT and HR will need to work together to fine-tune workplace strategies to make them more flexible and hybrid-friendly. While IT leadership has made hybrid work and remote work a reality, many employees are still frustrated with their current technology setup, which is often reflected in the overspending on IT services through shadow IT. For instance, take a 2022 survey by digital experience platform provider Lakeside Software of over 600 executives, IT leaders, and employees on the state of workplace technology, that found 36% of employees would consider leaving a company because of a poor digital experience — and 14% of those employees actually left a previous employee because of that very reason.
By working closely together, HR can pick up on employee concerns and technology frustration and relay them back to IT, which can influence user adoption strategies and training moving forward. On the other hand, IT professionals can ensure that HR departments are made aware of any updates to employee experience platforms like Microsoft Viva or new capabilities that can go to improve the employee experience.
4. Macroeconomics are going to be hard to avoid: As I wrote in an article last week, the macroeconomics are going to be hard for many workplaces to ignore in 2023, even if a recession doesn’t technically materialize in the U.S. Large tech companies are rightsizing, and many start-ups are shifting to a profit-over-growth mentality. The shift in workforce numbers is great for cutting office space and also for postponing technology upgrades and investments in any workplace amenity without a concrete return on investment. In the short term, workplace leaders will need to focus on prioritizing those projects that have a greater chance of receiving budget approval.
Though we have some clarity where the future of work is heading — it's flexible and hybrid — and the rate of workplace change might slow a bit, it doesn’t mean that 2023 is going to be a year to kick back. Hybrid work not only came with a great opportunity to reinvent the workplace, but it came with a set of workplace challenges and obstacles — all of which will keep workplace decision-makers busy until 2024.