2023 HR forecast: top 6 challenges for employers

First published: January 5th 2023
Last updated: January 5th 2023

Increased labour costs

The cost of doing business remains a key concern for employers as we enter 2023. A new survey conducted by Peninsula found that 72.3% of business owners listed rising costs as their number one concern going into the new year. 

The Government’s Temporary Business Energy Support Scheme is now in place and will go some way to alleviating these concerns.

Energy costs continue to impact the cost of living and this is having a knock-on effect on the cost of employing staff.

With a skills shortage also persisting, staff continue to seek pay rises and take their skills elsewhere if their demands are not met.

This challenge looks set to be an ongoing issue for employers in 2023 as the war in Ukraine persists.

Return to the workplace tension

As 2022 drew to a close and COVID-19 restrictions became a more distant memory, more employers asked their staff to return to the workplace. Not all workers were happy to do so and demanded permanent flexibility on where they work.

This conflict looks set to persist into 2023.

Hybrid working arrangements have been the answer for many employers and their staff. Whether a hybrid model will continue to be a long-term policy for employers remains to be seen.

Recruitment and retention

An economy rebounding from COVID-19 lockdowns and labour shortages conspired to give employees increased bargaining power in the labour market last year.

This trend saw leadership teams spending more time on recruitment and retention initiatives. If Ireland slips into recession this year, employers might regain the upper hand.

Another factor for employers to consider in the labour market is an apparent decrease in the importance of salaries. Recent surveys have revealed that employees (younger workers in particular), are prioritising workplace flexibility, work-life balance and wellbeing initiatives over higher salaries.

This may be an important HR consideration for employers to factor into their recruitment strategies as they seek to turn new hires into long-term employees.

Right to request remote work

In December 2022, the Government confirmed that the Right to Request Remote Working Bill was being shelved.

The new right to request remote work will now be contained in the Work Life Balance and Miscellaneous Provisions Bill which is progressing through the legislative process.

The following conditions will attach to the right to request remote work according to the latest draft legislation:

·      Employees must complete 6 months' continuous service to avail of the right to request remote work.

·      Employers will have 4 weeks (with option to extend to up to 8 weeks) to consider a request before approving or denying it.

·      Employers must consider both parties' needs when considering a request and provide staff with the grounds for a refusal.

·      The Workplace Relations Commission is expected to produce a Code of Practice to assist both employers and employees with handling requests.  

It is expected that the Bill will be passed into law in early 2023.

Employers will need to familiarise themselves with the new law and be prepared to handle employee requests. Ignoring requests may lead to WRC claims from disgruntled employees.

Statutory Sick Pay

The new statutory sick pay scheme came into effect on 1st January 2023. Employers should ensure that they are prepared to comply with their obligations under this new scheme.

The primary action points for employers are:

·      Review your payroll processes to ensure the new sick leave payments will be adequately reflected in payslips (failure to keep proper records is an offence and attracts a maximum fine of €2,500).

·      Review your employment contracts and policies to see if your existing sick leave policy needs to be updated (no action may be necessary if the terms of your existing policy are more generous than the statutory payments outlined above).

·      Notify your team in writing about any changes in employment terms that are required under the statutory sick pay legislation.

New public holiday in February

Finally, a tenth public holiday becomes a permanent date in the calendar this year. St Brigid’s Day falls on Monday February 6th in 2023.

Employers should ensure payroll is up to date and staff receive the appropriate paid leave or relevant alternative entitlement for this new public holiday.

Need HR help for the year ahead?

2023 looks set to be full of business challenges and maybe some opportunities.

With the help of our HR experts, we can ensure your business is ready to meet these challenges head on and to take advantage of any opportunities.

For instant HR advice and answers to any employment law questions you have, speak to one of our experts now on 1800 719 216.