Top 10 employee engagement trends to watch out for in 2023

Another year of changing workplace dynamics has gone by. You have witnessed the unprecedented in the past three years. The employee engagement levels dwindled between 31% and 40% before reaching an average of 36%. Globally, this figure raised from 15% to 21% in 2022.

Employee engagement evolved rapidly in the post-pandemic era. It is no longer about keeping employees happy but ensuring they feel fulfilled in their jobs. They need a sense of purpose to be dedicated to the workplace.

A few employee engagement trends have emerged recently that apply to all levels of employees and surpass industrial boundaries. These trends will prevail in 2023.

Let’s take a look.

Top 10 employee engagement trends irrespective of the industry

1. People-first culture

The employee-centric or people-first culture has shifted organizations’ primary focus from customers. And more companies are embracing this philosophy every day.

Employees are the new brand ambassadors, or the new customers, and will influence decision-making in 2023. Here are a few practices creating ripples in the employee engagement realm right now.

1. Listening programs. Listening and supporting are essential to engage your employees well. You can rely on oral listening in a one-on-one to gather your employees’ thoughts or use inFeedo’s tools like pulse surveys to help you continuously listen, pinpoint improvement areas and boost employee engagement.
2. 360-degree feedback. This give-and-take feedback method has been around for many years and has stood the test of time. It helps employees at all levels understand their strengths and weaknesses.
3. Human-centered approach. This refers to a culture of belongingness, appreciation, and compassion at work.
4. Employee adaptation initiatives. Welcoming new employees at work and making them comfortable is as critical. Up to 20% of layoffs occur within the first two months of joining.
5. Building an emotional connect. One of the key learnings from the pandemic was how important it is to forge strong emotional bonds with employees to keep them engaged at the workplace. A work-from-home culture demands that you figure out ways to eliminate loneliness and keep employees’ mental health in check.

2. Better work-life balance

You have seen how working only from home can disrupt personal lives. But traveling to work every day doesn’t ensure productivity either.

Up to 72% of candidates consider work-life balance critical while choosing a job, and approximately 60% of employees experience higher productivity at home. That’s why many organizations have adopted a flexible work culture to suit their employees’ needs.

And in 2023, promoting work-life balance will become more critical. Around 62% of millennials are expected to switch to the freelancing gig economy in the next two years for a better work-life balance.

3. Cloud-based tech

Cloud-based HR tech sells like hotcakes. HR professionals worldwide prefer it as it can enhance productivity by up to 40%. Besides, many functions offered by cloud tech include digital forms and workflows for regulatory compliance.

Cloud-based HR software can be integrated with many aspects of human resource management, like performance management, feedback-gathering surveys, employee benefits, and recognition platforms.

Besides, there are many other advantages:

• Better functionality
• Enhanced scalability
• Centralized data repository
• In-depth analysis and insights
• Ready-to-use software
• Flexibility and faster speed
• A high degree of customization
• Hassle-free maintenance

4. AI and ML

AI-enabled tools like Amber have revolutionized how you connect with employees, gather their feedback, and make decisions. 80% of executives believe AI can drive tremendous value in any organizational activity. Every HR function has been touched and refined by AI and ML. It is bound to grow in 2023 for the various benefits like:

• Automating monotonous tasks
• Reducing bias from recruitment activities
• Enhancing employee experience
• Analyzing performance and devising benefits
• Analysis and decision making
• Identifying the workers at risk of quitting

5. Diversity and Inclusion

One-third of HR leaders count D&I among their top five priorities. And why not? The more diverse your workforce, the better the ideas and experience. People from different backgrounds, races, ethnicity, or nationalities bring more creativity and out-of-the-box insights.

Overall, D&I culture promotes belongingness, team spirit, and psychological safety. 83% of millennials are more engaged at work in inclusive companies, which means they are less likely to quit early.

6. Gender ratio

Women have managed to scale up the ladder in the past few years, but there still is a long way to go. McKinsey’s Women in the Workplace report 2022 states 26% of women made it to the C-Suite, and 28% are at the Senior Vice President level.

Women are switching jobs for better prospects at an unprecedented rate higher than men. They are not afraid to ask for their dues and fulfill their demands. They are looking for a more inclusive work culture and are not afraid to build it independently. And this trend is expected to scale up in 2023.

7. More benefits

Perks and promotions are no longer enough to keep the employees engaged. You need to think ahead and offer them privileges that make them feel valued. And then millennials and Gen Z form the largest section of your workforce today. Thus employers are likely to weigh their likes and dislikes while finalizing the perks.

Some incentives catching up fast are health and wellness packages, children’s play area or a pet care facility for working parents, flexible working schedules, napping rooms, and paid vacations. These trends will surely come up through employee feedback, if not from employers.

8. Career development initiatives

Employees consider career growth opportunities while joining a company. In fact, professional skill development opportunities can enhance employee engagement by 2.5 times. Employees are looking for skill upgrades too. Last year saw 41% of companies employ in-person training programs compared to 25% in 2021.

Employees are up to 10 times more likely to quit if they don’t like the career trajectory or how their skills are utilized. This has put more pressure on employers to offer a lucrative growth plan. And this employee engagement trend is bound to influence decision-making this year.

9. Recognition

You may recall the times when appreciating an employee at work was simpler. You just had to give a shout-out, verbally or via email, and combine it with a goodie. The pandemic not only made it more challenging to connect with employees but also changed their thought processes.

Today, 63% of employees receiving due recognition and rewards (R&R) are likelier to continue at a job. Plus, it enhances employee performance by 14%. That’s why over 91% of HR experts consider R&R a critical investment.

10. New modes of communication

One-third of employees want their managers to connect with them more frequently. Work often suffers due to miscommunication, mismatched expectations, or things left unsaid but influential enough to affect employee performance.

Communication becomes difficult when employees connect via a screen, but employers have found better ways to dig deeper. For instance, Amber, an AI-enabled chatbot, connects with each employee individually to gather feedback and genuine feelings about the work environment.

Then, some industries have witnessed interesting employee engagement dynamics over the years.

Here’s how employee engagement trends have evolved for them.

Employee engagement trends in BFSI

The Banking, Financial Services, and Insurance (BFSI) sector is known for its intense and high-pressure work environment. Such stress affects employees’ satisfaction and engagement levels. Probably that’s why this sector suffers from a poor employee engagement rate of just 33% and a voluntary turnover of 16.2%.

BFSI adopted digital interactions mostly during the pandemic. But the scenario forced the sector to push its boundaries of innovation and find new ways for business growth and employee engagement.

The industry has taken some measures:

• Corporate social responsibility (CSR) initiatives: 61% of millennials prefer working for employers whose CSR interests match their own. Some initiatives include contributing to social causes like child abuse, healthcare, green initiatives, and local NGOs.
• Employee health and wellbeing: With high stress levels, taking care of employees’ mental and physical health becomes non-negotiable. Companies appoint health and fitness guides and form corporate wellness plans for their workforce.
• Inclusive decision-making: Employers involve employees to evoke a sense of belonging and push them to take responsibility.
• Mentor allotment: BFSI is a highly competitive industry where ambitions overshadow employee camaraderie. Allocating a mentor helps the mentor and mentee engage well, grow in their careers, and make the work environment conducive to growth.
• Digitalization: It is more of a necessity now and a great employee engagement mechanism. Various surveys and AI-enabled bots help engage your employees on a deeper level.

Employee engagement trends in healthcare

Healthcare is among the biggest employment sectors that employs up to 13% of Americans. Stress levels run sky-high, which is why employees constantly need to be engaged and happy. But engagement becomes a challenge due to prolonged and erratic working hours.

Healthcare employees face extreme burnouts, which can impact the quality of care they provide. The industry, on average, has a employee turnover of up to 7%, of which 35.2% of employees leave due to work-life imbalance.

Healthcare was the most affected due to the pandemic. The retention programs run by hospital administrations were put to the test during this time, and most of them failed. While 70% of hospitals believed in the effectiveness of their employee retention programs, the physicians disagreed. Around 69% of the physicians felt highly disengaged.

A recent study by Harvard Business Review found that a 1% increase in engagement levels can reduce hospital-acquired complications by 3% and readmissions by 7%. Thus, the industry has woken up to begin new trends that will prevail in 2023.

Here are the top 7 trends for 2023.

1. Improved communication between the administration and healthcare personnel
2. Health and wellbeing of healthcare employees have become a top priority after the pandemic, and the trend has just begun.
3. Acting on employee feedback. 60% of employers feel working on employee feedback leads to overall business progress.
4. Tech in Healthcare, especially AI-enabled tools like inFeedo’s, can help prevent burnout for healthcare professionals and increase organizational profitability.
5. Analyzing resignations. Up to 62% of physicians blame their employers for burnout. The healthcare industry faced the largest decline in engagement levels due to the pandemic, which jolted employers to take action. This year is bound to be a milestone in understanding resignations and preventing them.
6. Rewards and recognition because appreciating your employees regularly goes a long way in keeping them engaged and retained.
7. Diversity and Inclusion. It is a top priority for HR leaders globally. Talented employees can be found in different races, ethnicities, and geographies, and healthcare employers want to leverage that.

Employee engagement trends in FMCG

Employee engagement is being revamped across the fast-moving consumer goods (FMCG) industry. Employers are now more aware and determined to evoke a sense of self-management in their employees down the line.

Some trends have caught up like wildfire.

• Mental health is a priority for 80% of organizations and is bound to drive their decision-making this year.
• Retention has become a priority for FMCG employers since this industry has among the world’s highest churn rates.
• Professional safety. Layoffs and resignations were rampant during the pandemic. 2023 will be a year of pushing job safety as 52% of your workforce feels it is more important than promotions and salary hikes.
• Employee experience through career development. Opportunities to grow through training and skill development are another significant trend this year. Employees feel more engaged when they witness career progression with a company.

One trend is gaining traction in every industry and making HR heads turn. It is the onset of tech-based tools in managing and engaging employees.

Why embrace technology for employee engagement?

Employers spend approximately $720 million in measuring employee engagement in a year, but the figure remains a dismal 36%. Around two-thirds of the workforce still remains disengaged or unhappy. That’s why employers are turning to AI and ML for employee engagement activities.

Technological dependence takes the load off employers and brings many benefits.

• Connect with every employee individually. For instance, Amber connects with every employee one-on-one to gather their true feelings about the company and management.
• In-depth analysis and insights. AI-enabled tools analyze the data and bring you key insights that can speed up decision-making.
• Real-time reporting. Why wait when you can get actionable information in real time? Amber gets the employee feedback collected through chatbots, pulse surveys and exit surveys, and eNPS whenever you need it.
• Language abilities. AI eliminates all language barriers that earlier disrupted communication. It provides multiple language support to connect with diverse employees.
• Save time and money. Time is money for leaders, and Amber shares your load, thus saving it.

Our clients have witnessed hikes in employee engagement and saved the cost of doing multiple activities to engage their employees. The biggest support your employees need is someone who would listen to them and get it acted upon.