Top Challenges for HR Decision Makers in 2023

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Atlas Team

Atlas is a global tech company that spans over 160 countries, offering expertise and software built for the future of work.

Published: 18 Aug 2023

While the main agenda for many businesses is reducing costs, HR decision-makers are facing more unique challenges. Here’s what you need to know. 

The current economic landscape is unlike any we’ve experienced in recent history. A host of complex and multifaceted issues have combined on an international level to create a challenging environment for businesses to thrive in.  

Since the start of 2023, companies of all sizes have significantly reduced their total number of people employed as the heady days of the pandemic fade into memory.  

According to, the running total for job redundancies in the tech industry alone for 2023 is more than 212,000 at the time of writing, with the likes of Microsoft, Amazon, and Meta all laying off thousands of workers in recent months. 

Chris Cavanagh, General Partner at Guidepost Growth Equity, adds that “the era of ‘growth at all costs’ has ended.” We have now entered a new phase where the biggest concerns for companies are profitability while containing costs and, above all else, survival.

While the main agenda for many businesses at the moment is reducing costs, HR decision-makers are facing more unique challenges. Here’s how this new market environment is creating challenges for HR professionals.

1. Talent Shortages

Despite the media frenzy over global layoffs, almost all industries face real talent shortages. The 2023 WEF Future of Jobs Report found that more than half of the employers indicated difficulty in solving their skills gaps locally, and this inability to attract talent is one of the primary barriers to transforming their businesses to remain competitive.  

As if that wasn’t enough, retaining top talent appears to be even more difficult. The recent media hubbub about the “quiet quitting” crisis is not without basis — a recent Gallup survey indicates that at least half of the U.S. workforce is performing at the bare minimum expected of them in their roles.  

This does not infer a lazy or disinterested workforce. Instead, it highlights the unique challenges presented by the modern workplace — where remote or combined work has become the norm, job uncertainty is at an all-time high, and expectations from management are becoming less obvious.  

2. Lack of Employee Engagement

Is employee engagement really on the decline? According to Gallup, the quiet quitting phenomenon can’t be denied. 

“The overall decline [in engagement] was especially related to the clarity of expectations, opportunities to learn and grow, feeling cared about, and a connection to the organization’s mission or purpose — signaling a growing disconnect between employees and their employers.” 

— Gallup, ‘Is Quiet Quitting Real?’ 

The new world of remote working plays a major role in this. The ability to work from anywhere — one of the few benefits of the COVID-19 pandemic for many workers — now appears to be under attack in certain industries like technology and financial services.  

Indeed, while some predicted the end of the traditional office, mid-2023 saw a large-scale return. As reported in the Wall Street Journal, office occupancy rates in some parts of Asia ranged from 80% to 110% by February, meaning more people were in the office than before the pandemic. EMEA and North America are now also looking at 80% office occupancy.  

However, workers remain resistant. According to Gallup research, six out of 10 U.S.-based employees with remote capable jobs want a combined work relationship. Of those surveyed, one-third prefer fully remote work, and fewer than 10% want to work on-site.  

In addition, 50% of major global companies expect to cut office space by 10% to 20% because it remains empty. The global landscape has changed since the start of the pandemic, and the growing pains are real. The future of work is here. 

3. Reduced Budgets

The shift towards cost management and containment in the new market environment has resulted in slashed sales and marketing budgets across industries — however, HR budgets are under heavy scrutiny as well. 

According to Fortune, 25% of HR budgets decreased in 2023, compared to 12% in 2022. The uncertainty that runs through almost all international and domestic markets has meant that companies are tightening their belts and remaining cautious about the budget they're allocating to recruiting and new hires. 

Yet despite the lurking shadow of a possible recession, organizations need highly skilled talent to remain competitive and capture future growth. Here’s how an Employer of Record (EOR) is helping employers stay lean and prepare for future growth opportunities. 

The Future of Work and the Employer of Record

In 2023, businesses are faced with many competing priorities from the top down.  

On the one hand, cost containment and a focus on profitability instead of growth is the driving force behind most business decisions in 2023. On the other hand, the inability to access and retain top-quality talent in the rapidly shifting global labor market threatens an organization’s ability to rebound and make its mark on the next decade of innovation.  

“Modern organizations currently face a headwind of continued economic, geopolitical, environmental, and technological disruption. Conversely, the same technological disruption is expected to provide a tailwind of potential unlike anything humanity has experienced.” 

— Pete Tiliakos, GxT Advisors 

However, in the midst of every crisis comes great opportunity.  

In the 2023 climate of economic uncertainty, business leaders — including their senior human resource officers (SHROs) and other HR professionals — who adopt new ways of working and attract the greatest talent will be the ones to prosper in the coming decade.  

In particular, the nascent Employer of Record (EOR) industry and its increasing integration into wider HR functions offer great opportunities for maximizing business potential. 

Find out more about how Employer of Record services are transforming the future of work by downloading Atlas' Global Employer of Record Report: 2023. 

In this, you'll learn about: 

  • The Changing Dynamics of the Global Talent Landscape: Understand the forces driving change and how businesses can adapt. 

  • The Rise of Remote and Hybrid Work Models: Discover the benefits and challenges of these models and how to manage them effectively. 

  • The Role of Employer of Record (EOR) Services: Learn how EOR services can streamline your business operations and ensure compliance. 

  • What’s Coming Next: Forecasting the major trends and technologies that will define the next 12 months. 

Download the report, for free, by filling out the form below.