Over the last two years, HR leaders have faced more challenges than anyone could have ever anticipated. Being a CHRO or Head of Talent is incredibly difficult right now. In fact, during the week of December 25, 2021, weekly jobless claims came close to hitting a 52-year low, according to a CNBC report.
Meanwhile, the unemployment rate in April 2020 increased by 10.3 percentage points to 14.7 percent. This is the highest rate and the largest over-the-month increase in the history of the data (available back to January 1948). The number of unemployed persons rose by 15.9 million to 23.1 million in April. The sharp increases in these measures reflect the effects of the COVID-19 pandemic and efforts to contain it.
In early 2020, as the COVID-19 pandemic first hit hard, keeping the lights on while keeping everyone safe was the primary challenge. Workers in many professions, particularly public-facing ones, found themselves out of a job and flooding the market, while reduced spending led to more cuts across the board and, in many cases, even fewer job openings. Many HR leaders found themselves tasked with overseeing the shift to remote work – often with little warning and insufficient infrastructure.
Humans are amazingly adaptable. However, the stresses of the past two years have led many workers to make a better work-life balance a priority. For a whole host of reasons, workers in numerous professions have left their previous jobs behind and looked for new opportunities with better pay, better hours, different skills, different locations, or any number of other factors.
This “Great Resignation” has resulted in a labor market that’s tough for companies and offers an unusually high number of options for workers. Because of these trends, HR leaders are working overtime to rework their strategies and find new ways to find, attract, and retain talent and continue to deliver high-quality results.
CHROs and other HR leaders will need to be proactive in building a strong strategy heading into 2022. Because there’s still so much uncertainty and change, leaders need to stay on top of what’s happening – both in the industry in general and at their own companies – in order to remain competitive as a workplace where employees want to be (and stay). Pushing for innovation and improvements in everything from DEI to employee well-being to professional development will be key to standing out in a challenging labor market.
Here are the top trends, in no particular order, that CHROs and other HR leaders should be keeping a close eye on in 2022.
1. Digital Burnout Is Real
Pandemic-era overload has workers and managers feeling burnt-out and lowering perceptions of well-being. Also of note: this burnout is making workers feel too stressed and busy to learn new skills that would further advance or develop careers. In 2022, HR leaders will be facing the need to make some major shifts or risk a talent exodus (or, at least, deeply uninvested employees).
The Ken Blanchard Companies®, a global leader in management training, consulting, and coaching, released their 2022 trend study, which revealed a sense of tiredness and burnout among employees. This includes employees at various levels, in various industries, and at companies of various sizes. In other words, it’s something that every company is probably dealing with in one way or another. To combat this downturn, HR needs to have a plan in place to genuinely address employee feedback and find innovative ways to help employees regain a sense of balance.
2. Connectivity Needs to Get a Boost
Labor market analysts at ADP Research conducted a study of 9,000 employees in the US. Their findings revealed that remote work has significantly affected feelings of connection among teammates. 70% of on-site workers reported feeling strong feelings of connection with their teammates, while only 64% of remote workers reported the same. Specifically, the benefits lie in unplanned, unstructured, and spontaneous “face time,” rather than the pre-planned and formalized communication that remote meeting requires.
In 2022, HR is going to need to focus on connectivity. The perceived and real levels of connection among teams are dropping, which, in turn, is lowering trust, collaboration, and productivity.
3. Hiring Woes Won’t Be Letting Up Anytime Soon
The ball dropping on New Year’s did not put an end to an exceptionally tough labor market, where HR is struggling with high turnover and potential hires have multiple options. According to a study by MindEdge Learning, 54% of employers report “much higher” or “somewhat higher” turnover since the pandemic began. Respondents cited these high turnover rates as the second-biggest concern for their companies, second only to employee health and safety.
The same report also revealed that a whopping 80% of companies have noticed a major or modest increase in employee burnout – a key statistic tied to the turnover rate. However, only 40% of these companies say they have introduced benefits to reduce stress, and only 28% have offered remote training to all employees. In 2022, HR should be leading the way to ensure these benefits are available more broadly in order to improve retention rates and attract more top talent. Additionally, consider new recruiting practices and sources to open up new and unexpected avenues to find talent.
The restaurant and hospitality industry has been hit especially hard. According to one industry report, roughly 17% of restaurants shut their doors permanently. And, according to a report from Business Insider, as more full-service restaurants try to rebuild their staffs and fast-food places try to meet demand, there are now 70% more job openings than there were in 2019. Along with rising wages, 10% fewer people are looking for jobs in those industries too.
4. Belonging Is the New Keyword
DE&I continues to matter and grow in importance, but now “belonging” is a central concept that’s entered the conversation as part of the larger DE&I umbrella. Research from Gartner shows that organizations with sustainable D&I initiatives show a 20% increase in inclusion. This, in turn, corresponds with greater on-the-job effort, intent to stay and retention, and high performance.
“Belonging is a key component of inclusion. When employees are truly included, they perceive that the organization cares for them as individuals, their authentic selves. HR can help make that happen,” said Lauren Romansky, Managing Vice President of Gartner. “That’s good for employees — and ultimately improves business performance.” HR will be focusing on strategies to ensure that employees feel like they “fit in,” are valued and understood, and are genuinely welcome.
5. Overall Wellness Takes Center Stage
We’ve had a major focus on physical health during the pandemic, with concerns about distancing, safe workplaces, etc. Now, between the blurred lines of remote work and the stresses of the past few years, it’s employees’ mental and overall well-being that needs some attention. As reported by Forbes, The Future Workplace 2021 HR Sentiment survey found that 68% of surveyed senior HR leaders (40% of whom were CHROs) rated employee well-being and mental health as a top priority moving forward.
These overall wellness strategies involve addressing every aspect of employees’ experiences, from physical well-being to social and emotional aspects, to career and financial development. HR will need to be leading the way to develop initiatives that genuinely give employees a little boost in the ways they need it most.
6. Prioritize Visibility and Trust
As we’ve learned over the last two years, remote work poses quite a few obstacles for team-building and trust, especially since more people are scattered over more locations. According to recent research from the ADP Research Institute, employees who trust both their teammates and their leaders are seven times more likely to feel “strongly connected” to their organization.
Trust means that leaders have faith in their employees to be productive and that employees have faith in management to let them do their jobs and ensure their well-being. HR should be prioritizing the development not of over-monitoring or micromanaging as a response to the hybrid work situation, but of a culture of trust, transparency, and respect between leaders and employees.
7. The Great Resignation Becomes a New Opportunity
The so-called Great Resignation will continue into 2022. However, instead of looking at it as a trend that they’re powerless against, companies will be taking the opportunity to understand why employees are leaving jobs or searching for new ones and using that knowledge to make themselves more competitive for top talent.
Research from McKinsey revealed that up to 40% of workers surveyed are at least somewhat likely to leave their jobs in the next three to six months, and 64% of employers expect their turnover problems to continue or worsen. In that same survey, however, employers’ beliefs about why employees left did not match up with the real reasons that employees cited for their departures. This reveals a major lack of understanding – and a major opportunity. With HR leading the way, companies that take the time to understand what’s driving attrition rates will be better position to retain current staff and attract top talent who are searching for new jobs. In short, companies that turn the “Great Resignation” into the “Great Opportunity” will win big.
8. Employees Are Looking to Develop More Skills
In a survey of over 500 HR leaders across 60 countries and all industries, Gartner identified skill development as a key priority for 2022. According to their research, the number of skills required for a single given job is increasing by 6.3% annually. New skills are also replacing old ones: 29% percent of the skills in an average job posting from 2018 will be obsolete in 2022.
Employees will be looking for ways to develop and broaden their skills, both in hopes of leadership positions and simply to improve their own marketability. Many workers at a given organization may need to be completely reskilled by 2024, and it’s important not to wait. Employers that succeed will be the ones that actively support their employees in that. HR should be looking for ways to support employees in their professional development, which, in turn, can improve retention rates as well as the company’s overall reputation as a great place to work.
9. The Boomerang Employee Opportunity
Some leaders are considering “boomerang” employees as a potential resource for filling vacant positions. Forbes suggests that recruiting former employees who left on good terms may be a win-win for the employees and companies alike. The idea is simple: these past employees will have less of a learning curve than new hires, while their positive history with the company can be appealing for both the employee and the employer.
HR will need to play a vital role in ensuring that these boomerang employees are, in fact, a positive addition to the company. Ideally, these employees would be the ones who simply left to pursue a different opportunity more in line with their goals, and they might be open to returning in a role more suited to where they are now in their careers. Other types of boomerang employees, such as employees who regret making an impulsive decision to leave or have similar reasons, may need a little more vetting to ensure that their return will be a net positive for everyone.
10. Companies Will Recognize They Need Employees Onboard to Create Great Customer Experiences
Customer experience and employee experience truly are two sides of the same coin. The challenges of the last couple of years have brought into sharp focus the relationship between the two: companies need employees fully invested in order to provide the best customer experience. The unique expertise and opinions of loyal, innovative employees give a more on-the-ground perspective to what customers need and want.
HR can be the team that leads the way in recognizing just what an invaluable resource the company has in its people. Look for ways to more actively involve employees in the construction of customer experience, and their ideas can help your brand stand out.
11. The Gig Economy and the Fractional Worker
To win talent and develop successful workforce planning strategies, companies will come to recognize the opportunity to leverage fractional workers. Fractional workers, as defined by the U.S. Chamber of Commerce, are workers hired for a “fraction” of the time a traditional employee would work, and who often may work for multiple companies across the same period of time. It’s similar to hiring freelance or contract workers, except that workers are not hired on a project basis, but to fill a specific role for a “fraction” of time.
Fractional workers are the natural next step of the gig economy, combining the advantages of long-term professional relationships with the specialized skills of gig workers. Because this practice is all about filling in specialized skill gaps, companies can look to fractional workers for everything from super-specialized technical roles to executive positions (like CFOs) for start-ups. It’s all about successfully finding a subject matter expert to fit your needs.
12. Pay Transparency
According to the National Law Review, “The push for pay equity has moved beyond prohibiting pay discrimination and into requiring employers to encourage pay transparency for applicants and employees.” Look for workers to be savvier than ever about issues of compensation – and to have a lot more respect for and interest in companies with proactive policies about fairness and transparency.
While the legal side of things continues to evolve, even companies that are not currently required by state laws to have proactive disclosures may want to consider it. In the current labor market, employees often have multiple options and offers, so organizations need to stand out in a good way. Much like DEI practices, showing a proactive approach when it comes to pay transparency – and a commitment to continually improving those practices – can go a long way towards building a good reputation, attracting top talent, and retaining them long-term.
13. Return to Office and the Remote, Hybrid, and Flex Employee Mandate
It’s another year without a traditional “return to office,” but the employee mandate for greater flexibility will continue. After so long, many employers have chosen to make location flexibility a permanent part of their corporate culture – and those may be the companies that come out ahead in this tough labor market.
Even before the COVID-19 pandemic, a 2019 survey by Buffer of 2,500 remote workers revealed that 99% of them would happily work remotely (part-time/hybrid or full-time), for the rest of their careers. Likewise, a 2021 report from the U.S. Chamber of Commerce cited remote work flexibility as the second-most important factor to convince workers to return to the workforce. 32% agreed that an appealing remote work arrangement would incentivize workers currently out of the workforce to accept a new full-time job. Look for more and more companies to build flexibility into their policies from the get-go, especially as a means of attracting and retaining employees whose priorities have shifted.
14. HR Technology, Digital Strategy, and Labor Economics
HR Tech continues to be one of the leading destinations for private equity and corporate investment. The need for process automation, AI, machine learning, market data, employee engagement, and employee data will continue to increase, combined with legislative mandates for reporting of human capital data. CHROs will partner with their CIO and CMO peers to leverage technology and mirror traditional marketing activities focused on talent attraction and retention.
While the concepts of talent mapping, competitive intelligence, and labor economics are not new to the HR arena, organizational adoption and utilization of these tools has not been swift. Ready-now access to data and rapid deployment of data-based decisions will be a key differentiator for progressive HR functions and organizations.
By Ruben Moreno
About the Author
After a 25-year career in Corporate Human Resources and HR Executive Search, Ruben Moreno and his two partners co-founded Blue Rock Search based on a simple but ambitious vision of creating a firm that would “Change Lives and Organizations One Relationship at a Time.” Ruben leads the Blue Rock HR Executive Search practice specializing in the identification, assessment, recruitment, and onboarding of Chief HR Officers and Chief Diversity Officers and their respective teams — inclusive of leaders in Talent Acquisition, Total Rewards, HRBP’s, Learning & OD, HR Technology, HR Operations, and HR Analytics. Ruben has helped place hundreds of HR Executives and built deep relationships within the CHRO community across multiple industry verticals. His clients consider him a trusted partner who takes the time to understand their business and add value beyond executive search.
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