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A new report from Forrester suggests that companies looking forward to getting back to the good old days may have a long, futile wait ahead of them.

The "Future of Work" report, part of a larger series of predictions for the next year, finds that the current upheaval in the labor market is likely to continue through 2023, and a slowing economy will only make these disruptions worse. The report warns against over-reacting to the latest trends, and instead investing in policies that are supportive of employees. The employee relations findings support the larger points of the Forrester research: that employee and consumer trust will become more important in the coming year.

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"The demographic changes that underpinned the Great Resignation and the ongoing impact of COVID-19-related absenteeism will continue to constrain the talent market in a tight economy," the Forrester analysts writes. "The outcome is a 'bullwhip effect' in the talent market: actions that respond to a constraint create an overcorrection in the other direction, keeping the market out of balance."

The companies that will do best in the upcoming months, the report says, are those who are truly committed to listening to employees and trying to understand their experiences and needs.

Avoid reactive moves and invest in EX

The report puts a heavy emphasis on investment in the employee experience (EX), which can be defined as the total experience that an employee has with an employer, from first considering the job until they leave. The Forrester report predicts that many employers, worried about a recession, will pay less attention to listening to employees and investing in EX. This would be a mistake, the authors of the report say.

"The rise of employee power may seem to result from the pandemic, but it doesn't: the high quit rates of early 2022 were the continuation of a decade-long trend," they write. "The use of the label of 'quiet quitting' to dismiss workers who want a healthier work/life balance ignores long-term cultural and generational shifts."

The report also warns against employers being spooked by reports of economic downturns. Even if there is a significant recession, companies will still need to attract and retain talent. The Forrester analysists suggest that companies will weather economic storms better by paying attention to employee expectations.

Hybrid work is here to stay

The Forrester report, like many others, say that hybrid work will continue to be one of those employee expectations — the researchers note surveys that have found that 68% of employees who worked remotely during the height of the pandemic hoped to continue to work from home more often than before COVID-19 disrupted the workplace.

Yet at the same time, many employers are putting back-to-the office policies in place. "In 2023, we predict acute confrontations in the companies that don't listen to and collaborate with employees in shaping hybrid-work policies," the report says. "Adherence to in-office policies is already sketchy at best, and the threat of attrition looms large."

The researchers did note some promising developments in the area of talent mobility, predicting that internal talent mobility would increase to 25% of hires by large employers. With a tight job market externally, companies will overhaul their workplace planning to promote more internal hires.

"Unable to recruit for key roles externally, talent acquisition teams will fill open jobs with current employees, forcing a broader conversation about workforce agility, automation, and reskilling," the report says. "This can't be done without investing in learning and development among a wider array of roles than before."

Companies will also overhaul their interactions with workers, the Forrester report predicts. The analysts say that the most successful companies will move from survey and monitoring of employees to more open communication and discussion of employee needs. "Studies show that monitoring is counterproductive; instead, listening pays off with higher engagement, better productivity, and better customer experience," the researchers write.

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