14 Important Payroll and HR Trends for 2023

Dec 12, 2022 1:37:11 PM

2022 threw many of us through a loop with the great resignation, painful inflation, a tight labor market, and many other challenges. With 2023 right around the corner, here are our 14 most important payroll and HR trends to help professionals like you prepare for the new year. 

In this article:


ACA Compliance Rules

Beginning January 1, 2023, the lowest-cost health plan employers offer must cost no more than 9.12% of an employee’s household income or face penalties for failing to offer affordable employer-sponsored self-only coverage. Employers may use three safe harbors to judge whether coverage is affordable: 

  1. Employee reported W-2 wages
  2. Employee rate of pay at start of coverage period
  3. The federal poverty line for a single individual

Healthcare Inflation 

Employers are expected to see average healthcare costs increase by 6.5% (more than $13,800 per employee) in 2023, meaning workers will likely pay more for insurance. Here are a few ways employers are making efforts to keep things affordable in 2023: 

  • Adding more funds to health care plans without taking away from employee pay or other benefits
  • Shielding workers who earn less by charging them lower premiums than other employees
  • Expanding access to telehealth and primary care
  • Challenging hospital charges 
  • Identifying higher-quality providers

Tax Brackets Increase

As part of the 2023 annual inflation adjustments, federal income tax brackets will increase in 2023, along with increased standard deductions and exclusions. However, income tax rates are NOT changing. 

For specifics on changes and amounts, visit this page on the IRS website.  

Social Security Wage Base

The Social Security Wage Base (SSWB) will increase to an all-time high in 2023. The SSWB is the “upper threshold on which a wage earner’s Social Security tax may be imposed.” The wage base for computing Social Security tax will increase to $160,200 in 2023 (up from $147,000 in 2022). 

For more information, visit the Social Security Administration website

Employee Benefit Plan Limits

In 2023, the contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan will increase to $22,500 from $20,500. In addition, the IRA limit rises to $6,500 from $6,000 in 2023. 

The IRS has released new guidance on cost of living adjustments (COLAs) affecting dollar limitations for pension plans and other retirement-related items for 2023.

Check out this article from the IRS news section for more information. 

Minimum Wage Increases 

Many states have already increased minimum wages since the beginning of this year, and according to recent updates from December 2022, more than 20 states will see an increase starting in the new year. 

Four states will increase their minimum wages to be at or above $15 an hour, with the highest minimum wage being paid in Washington at $15.74 per hour. In addition, municipalities such as Seattle plan to set minimum wages even higher. Seattle’s minimum wage will be $18.69 per hour for businesses with more than 500 employees. 

Twenty states still adhere to the federal minimum wage of $7.25 per hour, which hasn’t changed since 2009. 

Salary Increase Projections

Due to blistering inflation rates and a tight labor market, employers are likely to increase salaries an average of 4.6% in 2023, a slight increase from the 4.2% bump we saw this year. According to Fortune Magazine, one-quarter of employers plan to give increases of up to 7%, which is more than double the average rate increase percentage from 2009 to 2021. 

Payroll Software in 2023

Payroll software in 2023 will see innovations and tools that help tailor these solutions to the needs of businesses of any size and their workers. What will this look like? 

Moving to the Cloud

More payroll software companies will avoid trips to the bank and move to online payroll services that operate in the cloud. So what exactly is cloud-based payroll? It means that a business can operate and manage payroll anywhere you have a computer or smart device, including updating essential employee data, recruiting, and onboarding. In addition, cloud-based payroll processing provides businesses with a lot of flexibility for growth and peace of mind when it comes to compliance concerns. 

Check out Proliant’s online payroll and tax services

Adapting to the Gig Economy

Around 9% of the workforce in the U.S.A. does some kind of gig work, which includes freelance and contract workers. Also, the gig economy is valued at around $350 billion, so it’s safe to say that many companies will be employing non-salaried workers in one form or another in 2023. 

Providing on-demand access to earned wages is a great recruitment tool for businesses looking to attract more contractors and freelance workers. Allowing gig workers and part-time employees early access to wages is becoming increasingly popular, with many benefits to both employers and employees.

Read more about EWA in the Proliant blog

People Analytics and Data Literacy

In the wake of the pandemic and great resignation, many businesses have been gathering and assessing data on employee motivation and engagement to find ways to meet employee expectations and increase recruitment and retention. According to HR Executive, the people analytic trend that was really popular in 2022 will continue into 2023 as businesses continue to struggle with attracting talent. 

Applicant tracking and recruitment tools integrated into payroll and HR systems are a great way to start gathering data on what potential employees are looking for. Additionally, integrated HR and payroll solutions allow businesses to gather, analyze and report on employee data. 

Of course, this means data literacy is increasingly becoming a necessary skill set for HR professionals as people analytics can provide valuable information for everything from improving recruitment to enhancing the overall employee experience. 

Preparing Employees for Change 

Training and development saw a rise in popularity in 2022 as companies provided various tools and programs to help reskill and upskill employees during the great resignation. In 2023, continued training and development programs will be key to boosting recruitment and retention efforts. 

Improving Soft Skills: 89% of recruiters say that employees that don’t live up to expectations in their first year typically lack the soft skills necessary to adapt and prosper. In a world where automation and AI are becoming the norm, soft skills are more vital than ever to prepare employees as their roles evolve and change. Providing training and development opportunities to help build these skills will definitely help with retention in 2023 and could even be used to promote an organization as a place for growing in one’s career. 

Upskilling and Reskilling: Opportunities for upskilling and reskilling are also valuable features to job seekers. According to a Gallup Report, 65% of job seekers believe employer-provided upskilling is very important. Check out the Proliant Upskilling Checklist for helpful tools and tips on providing upskilling opportunities for employees. 

Training for Leaders and Management

In 2023, leader and manager effectiveness will be a priority. As a result, training and development for people in leadership roles will focus mainly on building emotional strengths and leadership skills that focus on empathy. Here are two areas of focus that many training programs will provide in the new year. 

Emotional Intelligence: Emotional intelligence training courses focus on understanding and managing emotions positively for effective communication and conflict resolution. These courses will help leaders build a culture where all employees feel valued. 

Developing Trust: Trust is essential for HR to function well within a company. It’s also vital for leaders and managers to build trust with their employees. Our blog about developing trust in HR has many tools that can also be applied to people in leadership roles. 

Diversity, Equity, and Inclusion

Diversity, Equity, and Inclusion efforts have waned a bit as businesses struggle with inflation, recruitment, and other woes at the end of 2022. However, DEI programs are still going to be essential for building an inclusive work culture that will attract valuable talent. Studies have shown that workplaces fostering an atmosphere of acceptance, empathy, and understanding are more productive and have higher retention rates. Here are a couple of areas where organizations can focus their DEI efforts in 2023. 

Providing Safe Spaces 

As many companies have employees return to the office, many groups will need safe spaces to make them more comfortable in the workplace. This includes breastfeeding rooms for mothers, mediation/universal prayer rooms, and booths for people with auditory sensitivities. 

Continuous Guidance

A recent article in Forbes suggests that employers should have a cohesive DEI strategy that focuses less on one-off training and more on guidance and teaching that helps employees work together effectively with people who have different backgrounds and identities. This can take the form of dialogue sessions and coaching on various topics like microaggressions and intersectionality. 

Employee Wellness

In the past few years, burnout, mental health, and employee wellness issues have come to the forefront in conversations and articles published across just about every medium. In 2023, these issues will still pose difficulties for HR professionals and employers as they adjust to a new workforce valuing employee wellbeing. Here are a few ways to tackle this ongoing challenge in the new year. 

Wellness Programs: The programs should be unique to an organization to offer support for healthy lifestyles. These programs also help identify employees at risk for mental health and other concerns and connect them with the help they need. 

Mental Health: In 2023, it will continue to be vital for employers to make efforts to destigmatize mental health and encourage employees to discuss personal experiences and stress management. 

Work-Life Balance: Job seekers and current employees are prioritizing work-life balance above benefits and salary increases more and more each year since the pandemic began. Providing benefits like the following will make all the difference in recruitment and retention efforts in 2023: 

  • Paid Leave
  • Flexible Working Arrangements
  • Four-Day Workweek 
  • Childcare Benefits

Remote Work Trends

If you work in an office, you are probably aware that the in-office vs. remote work debates are still a thriving trend. This is not likely to change in 2023 as many organizations still struggle with the decision to return their workers to the office. However, hybrid and remote work continues to be a sought-after perk for job seekers. 

Here are some remote work trends and topics to keep in mind for 2023: 

Digital Tracking and Trust

According to, employees that feel like they are constantly being monitored are less likely to stick with an organization. Therefore, using a personal touch and trusting workers to complete work on their own terms will be a trending attitude in 2023 to increase employee retention in a tight labor market. 

Multistate Compliance for Remote Employees

Remote workers are one of the top multistate compliance issues many businesses must face today. Employers must adhere to the local and state laws of where their employees are working. State and municipal employment laws and regulations can be excruciating to keep up with without help. 

Proliant’s online payroll and tax services guarantee compliance no matter where your employees work in the U.S.A. 

Virtual Employee Engagement

Remote work has become a very common perk offered by many businesses across the country. Here are a few suggestions for how employers can ensure employees remain engaged: 

  1. Have fun together. Include games in your virtual team meeting or have a virtual wine-tasting event. 
  2. Show appreciation. Send out gift cards as a thank-you for reaching milestones. 
  3. Maintain regular and consistent communication. Promptly get back to employees and encourage them to reach out whenever they need. 
  4. Get to know your employees and provide opportunities for them to get to know each other. 
  5. Encourage collaboration on your team as often as possible. 

Monotonous Zoom calls can kill motivation and lead to burnout. So throw in some of these personal touches to improve culture and encourage productivity. 

Work with Proliant to Create a Successful Strategy for 2023 

2022 was full of surprises, and we can’t expect anything less for next year. At Proliant, we provide the tools and solutions to help make sure your strategy for 2023 goes off without a hitch. Work with us to implement an online payroll system that will simplify monthly payroll and remove compliance headaches. Our integrated solutions will also streamline many of your administrative processes so that you’re ready for whatever challenges the new year has to throw at you. 

Reach out to one of our payroll and HR experts to get started by clicking the button below. 

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About ProLiant

ProLiant puts the human in human resources. We provide a fully integrated, cloud-based HCM solution that simplifies payroll and HR processes. The company serves small to large clients in multiple industries in all 50 states and is committed to providing the highest quality customer service in the industry.

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