People working in an office on separate couches wearing headphones and on their laptops.
VR technology has several uses in the HR sector, including as a tool for employee learning and a way to interact with emerging metaverse applications. — Getty Images/ Luis Alvarez

The future of human resources involves continuous technological advancements and digital transformation. Businesses and HR departments must understand how the sector is changing to retain employees.

Going forward, HR professionals can expect to see innovative trends from hybrid/remote work models and digital workplaces to data-driven DEI strategies and metaverse investments. Here are eight HR technology trends business owners can leverage in 2023.

Reskilling and upskilling

Rather than hiring new employees, many companies are reskilling and upskilling their current workforce. Reskilling involves teaching employees new skills so they can shift into a completely new role in the same workplace, while upskilling involves teaching employees skills that can help them grow and thrive in their current area of expertise. Both processes allow businesses to improve their employees’ skills and knowledge for internal mobility while also helping them advance in their individual careers.

Data-driven compensation strategies

The record-high inflation rates and rising living costs are causing financial stress for many American workers, and more employers are increasing their salary budgets to attract and retain employees. HR departments are now relying on broad data sets, from both within and outside their organizations, to inform a data-driven compensation plan that ensures employees are receiving salaries that are on par with similar positions in the industry. Workplace data like revenue growth and sales contracts can even be used to inform bonus and commission strategies for members of certain departments.

[Read more: Does Your Small Business Need an HR Department?]

Increased hybrid and remote work

Since the COVID-19 pandemic, many businesses have stuck with hybrid and remote work models. This flexible approach allows employees to better balance their work and personal lives by accounting for things like doctor appointments, child care, commuting time, and more. Many employees perform better when given the option to work from home at least a few times a week, and offering this perk can increase overall employee satisfaction and retention.

Utilizing the right tech and software can help all employees remain connected while working hybrid or remote schedules.

Rather than hiring new employees, many companies are reskilling and upskilling their current workforce.

Digitizing the workplace

Through the use of artificial intelligence and machine learning, HR departments are focusing on digitizing the workplace — especially since the COVID-19 pandemic. This will help employees feel more engaged and productive. Streamlining different workplace processes offers a more personalized experience for employees, which improves efficiency and retention. If your HR department is not keeping up with the digital age, it will show — and it will impact employees.

[Read more: 5 Steps to Developing Human Resources Policies for Your Startup]

Tech-enabled employee self-service

Tech-enabled self-service allows employees to access HR information and tasks on their own time. For instance, if they want to schedule time off, view pay stubs, or sign up for benefits, they should be able to do so in one central location. Self-service portals have already taken over many HR departments, but especially in 2023 and forward, employees will likely expect the convenience of technology.

Investing in the metaverse

By 2026, 25% of people will spend at least one hour a day in the metaverse. The metaverse provides immersive virtual experiences for employees, such as virtual meetings, onboarding, employee engagement, and learning and development. This alternate reality can change the way employees view the role of their HR departments. By investing in the metaverse, companies will ensure they’re keeping up with the latest technology and trends, which will trickle down to employees.

Implementing data-driven DEI initiatives

Diversity, equity, and inclusion (DEI) initiatives have remained a priority for businesses and HR departments over the past few years, and they will only become even more important in 2023. Because DEI efforts are now measurable (meaning there is enough data from previous years to finally track and analyze the information), companies will utilize DEI data to create new and improved policies and procedures.

Digital learning and development

Because of the pandemic hindering the progress of learning and development initiatives, many HR departments are now doubling down on their efforts in 2023. By intertwining gamification and virtual reality in the learning and development process, employers will likely see more engagement and better outcomes from their staff.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

Applications are open for the CO—100! Now is your chance to join an exclusive group of outstanding small businesses. Share your story with us — apply today.

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.

Apply for the CO—100!

The CO—100 is an exclusive list of the 100 best and brightest small and mid-sized businesses in America. Enter today to share your story and get recognized.