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2022 HR Trends Report Highlights: Engaging People in the Evolving World of Work

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The ability to quickly pivot and change course has been essential as we’ve had to adapt to the challenges COVID-19 has brought. 2021 promised to bring back some semblance of normalcy with the widespread availability of vaccines, but just as the light at the end of the tunnel started coming into view, the delta variant took hold and the feeling of going backward was all too real.

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2022 HR Trends Report Highlights: Engaging People in the Evolving World of Work

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Human Resources (HR) in the Ever-Changing Workplace:

Putting People at the Center of What You Do

The ability to quickly pivot and change course has been essential as we’ve had to adapt to the challenges COVID-19 has brought. 2021 promised to bring back some semblance of normalcy with the widespread availability of vaccines, but just as the light at the end of the tunnel started coming into view, the delta variant took hold and the feeling of going backward was all too real.

The workplace experienced going two steps forward and one step back as well. After quickly moving employees from office to home, employers focused on changing HR rules and regulations and providing technologies to keep employees engaged and connected. Leaders scheduled opportunities for teams to collaborate and celebrate success through virtual coffee chats, lunches and happy hours.

Today, employers are focused on successfully balancing a hybrid workplace and keeping up with the ever-changing questions, requirements and policies surrounding masks and vaccinations.

If 2008 was the “Crisis for the CFO,” some are dubbing the COVID pandemic the “Crisis for the CHRO.” (Hogan)

Through it all, employers and HR professionals must continue to progress their HR fundamentals to meet the evolving world of work expectations. For over ten years, QTI’s annual HR Trends survey and resource guide have provided employers with the critical insights needed to stay on top of HR trends. From compensation and benefits to employee well-being, remote work, diversity, equity and inclusion, and more, these findings offer guidance for developing a successful 2022 HR strategy.

This year’s data indicates that finding qualified employees is the top HR trend for the upcoming year, with succession planning and pay structures coming in second and third respectively.

The world of work looks different, but with the right tools and proper knowledge, this new world could mean endless possibilities. Continue reading to find out how.

Fostering Success in 2022:

Securing Top Talent, Developing a Plan for the Future and Navigating Pay Expectations

Finding the Right Talent for your Team

After dropping two spots and ranking third in 2021, attracting the right talent returns as the top HR Challenge for 2022. The number of employers experiencing a 30% voluntary turnover nearly doubled in 2021, aptly naming the mass exodus of employees the Turnover Tsunami. According to a July 27, 2021, SHRM article by Johnny C. Taylor, Jr., “30% annual turnover might just be the new norm.”

The pandemic created an environment of uncertainty where most employees were happy to have a job. As time has gone on and the slow and steady progress toward normalcy returns, people are beginning to rethink their career choices. Add in an expanded geographical job search scope due to remote work, and a dream job located in a different state is more plausible than ever before.

Voluntary turnover leaves open positions to be filled. An aging workforce, baby boomers retiring and a slowing birthrate result in a shrinking workforce and a recruitment headache. According to the CDC, the U.S. birth rate fell by 4% in 2020, making it the sharpest decline since 1979. In addition, the U.S. Bureau of Labor Statistics projects that the labor force participation rate will continue to decline in 2022. With this in mind, it will take time and a variety of approaches for businesses to find new employees to fuel future growth.



1. Show employees you care about their well-being

According to Robert Half, 44% of employees say they are more burned out today than a year ago. Employee burnout can lead to disengagement and, ultimately, turnover. According to QTI’s 2022 HR Trends survey, only 17% of employers responded that their workforce is highly engaged.

Offering benefits that prioritize mental health, such as a company-wide day off, subscriptions to meditation programs, a “school’s out fun day” to help parents during school closures or a program to reimburse employees who try new experiences are just a few ways that an employer can demonstrate care for an employee’s well-being. Additional opportunities to demonstrate care can be as simple as offering a “thank you” for work well done or occasional check-ins to say hi and see how things are going.



Pro Tip: Highly engaged employees have excellent attitudes, are emotionally committed and regularly go above and beyond for the organization.



2. Cast a wider geographical net when recruiting potential new employees

Three out of ten responding organizations noted this strategy for finding talent. If expanding your geographic search area is not part of your recruiting strategy, ask yourself, “Am I getting the talent I need in the current markets, or am I missing out on talent by not expanding my recruitment net?” If new employees will mostly be working remotely, remember to think about how you will engage them and ensure they feel like a true member of the team.



3. Assess which employees may be at risk for leaving

Using a tool like an employee engagement survey can help you uncover trends that may increase turnover or make recruiting a challenge. Stay interviews can also help to identify at-risk employees, allowing you to intervene before you lose a vital member of your organization. “What do you look forward to at work every day?” and “What causes you stress every day at work?” are two example questions that can help set the tone for your stay interview.



4. Think outside the box

For hard-to-fill positions, identify whether there are any technologies or automation tools that can assist with that role. Assess the role’s responsibilities and determine the characteristics and core capabilities necessary, then hire, develop skills and train. A recruitment firm can help fill positions, providing expert guidance on sourcing the right candidates and thoughtfully helping to manage the candidate experience throughout the interviewing and hiring process.

Planning for the Future Success of Your Company

Building a sustainable workforce through succession planning has consistently ranked as a critical priority for employers. Heading into 2022, employers continue to prioritize planning for the future, making this the number two HR Challenge.

Succession planning means different things to different people. It can be as simple as naming an individual to take over or as complex as overhauling the organization’s structure to align with long-term objectives. Succession planning is a future-focused practice of identifying the knowledge, skills and abilities to perform certain functions and then developing a plan to find that talent either outside or inside the organization, while developing a customized transition plan to ensure a smooth hand-off. Succession planning is unique for every organization, and there is no single formula or strategy that will work for all organizations.

As employers grapple with the rapid exodus of employees while simultaneously trying to attract talent, they understand the vital role a succession plan plays in their future success. Seventy-six percent of HR Trends survey respondents rated building a sustainable workforce through succession planning as a moderate to significant challenge for 2022. The increase in baby boomers retiring fuels this challenge, with 33% of respondents citing retirement as one of the top three reasons for resignation.

According to an article compilation from SHRM, baby boomers are leaving the workforce in greater numbers than ever before, with 3.2 million more baby boomers retiring in the third quarter of 2020 than the same quarter of 2019.

Six Key Elements of Successful Succession Planning

1. Strategic Planning
Determine what capabilities, roles and talent are needed to execute the business strategy today and in the future.

2. Talent Assessment
Gauge the leadership team’s bench strength. Do you have who you need (now and in the future) and if not, how do you get there?

3. Recruiting
Develop a process and a talent pipeline for key roles and jobs.

4. Performance Assessment
Let employees know they are valued contributors and provide them with genuine feedback for improvement, opportunities for development, exposure to leaders, networking across departments, etc. (get them on the “corporate
radar screen”).

5. Development
Create development plans for employees (e.g., leadership workshops, classes, on-the-job learning, assignments, special projects, 360 performance reviews, external classes, etc.).

6. Retention and Engagement
Foster an engaged workforce by providing a healthy work environment, rewards and recognition, opportunities for development, job autonomy and clearly defined responsibilities. With a hybrid workforce, think about how you help employees belong and connect, fostering the company’s purpose and values and finding ways to keep the camaraderie strong across in-person and virtual colleagues.

Meeting Employee's Pay Expectations

Local employers are now competing with national companies and higher pay rates due to the rapid increase in remote work and rising inflation. With vast opportunities for employees to work from anywhere, employers must revisit pay structures to keep up with employees’ demands. In fact, companies should evaluate pay structure increases annually to determine if any adjustments are needed.

Pay compression on current pay levels is a common issue that employers face with these higher pay demands. Fifty-three percent of responding organizations have experienced pay compression issues between new hires and existing employees. To combat this and avoid pay inequities, nearly half of the responding employers have granted pay increases to employees.

Geographic Pay Differentials

To address remote work and the demand for higher wages, employers can consider geographic pay differentials. While only 13% of HR Trends survey participants stated having a geographic differential pay policy, companies such as Facebook and Twitter have proposed a reduction in pay for employees who move away from their company headquarters, which are typically in higher-cost cities (World of Work). Forty percent of survey respondents who have a geographic differential policy use the city/metro area of the employee’s assigned work location to determine pay. Before implementing a policy such as this, it is essential to consider any tax implications and ensure there are not pay inequities across similar groups of jobs and experience levels.

Base Pay Increase Budgets

While demands for higher pay from employees remain, organization 2021 median actual and 2022 planned base pay increases remain steady at 3%. Inflation is trending at its highest rate in the last ten years, and it seems unlikely that pay raises will keep in line with inflation. As such, 83% of responding employers state they will consider altering their 2022 base pay increase budgets if rising inflation is sustained.

Inflation is also increasing benefits costs. Sixty-two percent of survey respondents are experiencing increased benefits costs, with almost half (44%) sharing those increased costs with employees.

Year Overall Median Overall Average
2021 Actual 3.0% 3.2%
2022 Planned 3.0% 3.2%

Ask Yourself:

Are you making appropriate adjustments to your total rewards strategy based on the evolving needs of your employees?  

The COVID Effect

Understanding the Evolving Workplace

Before the COVID-19 pandemic, only 3.6% of the U.S. workforce worked remotely half-time or more. At the pandemic’s peak in 2020, it was estimated that 72% of U.S. employers had all or nearly all employees working from home (Gallup: COVID-19 and Remote Work Update). That number has been declining ever since, as vaccinations are readily available and restrictions have been lifted. QTI’s 2022 HR Trends survey reports that, on average, 27% of employees are working remotely 50% of the time.

Before the COVID-19 pandemic, only 3.6% of the U.S. workforce worked remotely half-time or more. At the pandemic’s peak in 2020, it was estimated that 72% of U.S. employers had all or nearly all employees working from home (Gallup: COVID-19 and Remote Work Update). That number has been declining ever since, as vaccinations are readily available and restrictions have been lifted. QTI’s 2022 HR Trends survey reports that, on average, 27% of employees are working remotely 50% of the time.

66% of leaders say they are considering redesigning their office to support a hybrid workforce.

Percentage of Employees Working Remotely at Least 50% of the Time

Median Average
Currently 10% 27%
Expected Post-Pandemic 10% 27%

The increase in remote and hybrid workforces is leading many organizations to adapt their workplace to meet the needs of their employees. According to a Microsoft Work Trends Index and Wall Street Journal, 66% of leaders say they are considering redesigning their office to support a hybrid workforce. Interestingly, 49% of Wisconsin employers who responded to the HR Trends survey note that they anticipate their total office/facility/physical space will stay the same three years from now. This aligns with the notion that employers have expressed the importance of having a physical work location for enabling employees to collaborate effectively and provide the opportunity for in-person connection, communication and collaboration.

Ninety-three percent of survey respondents reported that remote employees are meeting or exceeding expectations. This is good news for employees whose desire is to continue work remotely.

Looking ahead, employers plan to allow remote work to some degree. Sixty-four percent of organizations reported that employees will be required to work on-site less than five days per week. This is a complete shift from onsite expectations pre-pandemic when working in the office every day was the norm for most. Of course, not all jobs can be performed remotely, and some employees prefer coming into the employer location. For this reason, many employers are exploring the best way to determine which positions can work remotely. Roughly one third of survey respondents stated that select jobs will be allowed to work remotely, and only 3% noted that most or all of their employees will be required to work remotely post-pandemic. To help ensure an effective hybrid work model, businesses are installing new technology to support virtual meetings, as well as implementing hoteling spaces. This is when assigned seating in the workplace is eliminated, and employees can reserve a desk or other office space on the days they actually want or need to be in the office.

Flexible Work Arrangements

Eighty-two percent of responding organizations have and will continue to offer remote work arrangements (either ad hoc/occasional or full-time) post COVID-19.

Vaccinations

“What’s your vaccination status?” is a phrase many employers may be uttering in the coming months as they work through new policies and determine whether employees should be required to get vaccinated against COVID-19. Currently, all federal employees must be vaccinated or adhere to mandatory mitigation risks such as regular testing and masking. In Wisconsin, some of the state’s larger employers, government agencies and healthcare organizations require vaccinations. From federal mandates to individual decisions made within the private sector, the ongoing conflict over vaccinations leaves many employers unclear how to move forward.

Another COVID conundrum employers are navigating is how to handle situations where an employee can’t or won’t get vaccinated or refuses to follow requirements such as routine testing or wearing masks. According to the Equal Employment Opportunity Commission, employers that are requiring vaccinations must be complying with “the American Disabilities Act, Title VII of the Civil Rights Act of 1964 and other workplace laws.” (SHRM, August 23, 2021)

The role vaccinations will take in returning to the office and working remotely remains to be seen. However, it’s a subject employers should be prepared to discuss because candidates will want to understand the company’s stance on the issue.

Staying Connected

With the hybrid workplace becoming increasingly common, employers will need to focus on keeping employees connected and engaged. When an employee feels disconnected with their employer, they are more likely to become disengaged. Disengaged employees cost U.S. businesses billions of dollars a year in lost productivity, and put the company culture at risk. Organizations with higher employee engagement experience few HR challenges.

Regular communication can help keep your employees connected and engaged whether they are remote or in the office. Business communication platforms such as Slack, Teams and Chatter are the most popular choice for maintaining connectivity.

Strength in numbers: Ninety percent of survey respondents reported using multiple channels to keep all employees connected. Team meetings, regular company webinars and social media are just a few other ideas to keep employee engagement up whether they’re working from home, coming to the office or a little bit of both.

90% of respondents use multiple channels to keep employees connected.

Ask Yourself:

Are you coming up with new solutions to keep employees connected?  

Diversity, Equity and Inclusion (DEI):

Supporting Your Employees' Authentic Selves

In a year of evolving workplaces and practices, one thing has remained the same: Workplaces need to embrace and prioritize DEI as a strategic priority within their organizations. Before we dive into a multitude of business reasons to commit to DEI in the workplace, it should be noted that they do not outweigh the fact that DEI should be imperative to your organization. Your employees and communities expect and deserve that much. It is the right thing to do. Committing to an inclusive, diverse workplace is an essential way to show your employees that you care and are listening.

Time for Action

Actions speak louder than words. It is easy to signal change within your organization through diverse photos on your website or an updated mission statement, but it is simply not enough. Employees deserve and expect to see strategic plans, thoughtful actions and accountability from their organization. According to this year’s survey, three out of five organizations have made DEI a strategic priority; however, fewer than one in three organizations has a DEI strategic plan in place.

For companies creating a strategy, these are the top three actions respondents are taking to advance diversity, equity and inclusion in their organizations:

  • Hosting trainings, workshops and development opportunities
  • Providing a safe place or way for employees to share feedback
  • Reevaluating talent sourcing methods

Ask Yourself:

How do you show your commitment to furthering DEI?  

Actions Taken to Advance Diversity, Equity and Inclusion

Trainings, workshops and development opportunities help expose your whole organization to new ideas and can inspire attitude and mindset shifts. It’s important to be proactive with these trainings and create a plan that measures its impact.

Measurement opportunities could include employee pulse surveys or one-on-one conversations between employees and their managers. Online trainings and workshops are not a cure-all for an organization and should be a part of your DEI strategy, not the only aspect.

When focusing on supporting your employees’ true, authentic selves, communication is key. Listening to employee feedback will help create a workplace community that feels safe and welcoming to all.

The learning and listening gained from the actions above are essential to your organization becoming safer and more inclusive. To optimize your strategy further, form a DEI committee in your organization, or partner with organizations in the community that focus on DEI education.

Don’t Fall Behind the Curve

We know that one of the biggest concerns organizations face is a lack of diversity in their workplace. If you’re currently experiencing that in your organization, now is the time to initiate changes in your organization’s hiring practice. According to a survey by Glassdoor, 76% of job seekers and employees consider a diverse workforce as an important factor in their job search, and this number only rises when asking Black (80%), Hispanic (80%), and LGBTQ (79%) job seekers.

Our survey reflects a similar sentiment from the employer’s perspective, with 74% of respondents reporting that finding qualified diverse candidates is the biggest obstacle to having a more diverse workforce. So, what are you to do?

  • Evaluate job descriptions and make them as accurate as possible
  • Assess where jobs are posted and cast a wider net if need be
  • Expand the geography where you recruit to get more candidate interest
  • Allow for flexible start and end times
  • Embrace remote work flexibility

Implementing a few changes in the talent acquisition process could positively impact your organization’s diversity.

Although there has been added awareness and progress made in the workplace regarding diversity, equity and inclusion, it is not the time to slow down.

Only 8% of respondents rated their organization as “great” in their DEI efforts, which leaves room for more action, transparency and, most importantly, care. Caring for employees allows them to be their true, authentic selves in the workplace.

Careers

Cultivating Impactful Careers Through Growth and Development

While the COVID-19 pandemic has affected our health, well-being and overall business, it may be surprising to learn its effect on career development. According to an April 2021 study by Bamboo HR, 78% of remote workers feel their career development has been negatively affected. The study points to burnout, a slowdown in business and work/life balance contributing to this declining feeling related to career progression. Our HR Trends survey supports this point, with career development the most common reason employees resign from an organization.

Growth Opportunities

Ask Yourself:

How can you provide and communicate to your employees a clear path for career development?  

Laying the Foundation for Career Growth

Showcasing growth opportunities and career progression to potential employees will play a role in recruitment—and set you apart from other hiring employers. The newer generation of workers is invested in growing and is interested in having ample development opportunities. According to Gallup’s “How Millennials Want to Work and Live,” 59% of millennials say opportunities to learn and grow are extremely important to them when applying for a job, with only 44% of Gen Xers and 41% of baby boomers stating the same.

Performance feedback is one way to foster career growth and development. Working remotely has caused regular performance meetings with managers to be replaced with quick Microsoft Teams or email messages, or in some cases, discontinued altogether. But, it’s imperative to find time to meaningfully connect with employees to share feedback. The Bamboo HR study found a positive impact on career progression when employees had frequent connections with their direct supervisor.

For HR Trends survey participants, 27% reported conducting ongoing or continuous performance feedback.

Another venue for providing growth opportunities is through side projects. Fifty-five percent of HR Trends survey respondents noted providing extra assignments or projects, in addition to their day-to-day work, as the most prevalent way of offering growth opportunities. Other predominant growth opportunities offered include:

  • Admission to industry or professional conferences (52%)
  • Education or certification financial support (51%)
  • Association and industry membership dues (50%)

Prioritizing Recognition Programs

Recognizing an employee’s achievement is an integral part of the employee experience. It can increase retention, engagement and productivity. According to surveys by Kazoo and SHRM, 81% of employees stated they’re motivated to work harder when their boss shows appreciation, and half said they’d stay at their job longer if they felt appreciated.

Both monetary and non-monetary recognition programs can be effective, and 57% of HR Trends survey participants state that both are components of their program. As little as 1% of payroll spent on recognition can increase employee engagement by 85%. For non-monetary options, it is important to know your employee–not everyone wants to be publicly recognized through a team intranet or company-wide email or meeting. For some, a meaningful note or personal outreach can make all the difference. Likewise, there may be generational differences in the type of recognition preferred. A study by DaVinci Payments found that the two youngest generations find more “personal fulfillment” through financial recognition--even in small amounts--and it also helps boost retention.



Pro Tip: When in doubt, use these recognition best practices:

1) Tie it to spontaneous recognition
2) Make it timely and specific
3) Connect recognition to company values
4) Let employees choose the reward that matters
5) Democratize it–empower employees/teams to reward each other
6) Track, analyze and improve it
7) Have fun with it!

Well-Being

Embrace and Execute Well-being in the Workplace

Workers are moving from meeting to meeting, and many times without breaks in between. Plus, it is easy to “not turn work off” when it is always with you at home. A research study by Stanford notes that “excessive amounts of close-up eye contact is highly intense” and is one of the reasons many are experiencing such fatigue. To help employees deal with technology exhaustion, encourage scheduled “non-Zoom” breaks between meetings or implement a camera-free day.

The Stanford research study provides some ideas to help reduce Zoom (or other video chat platform) fatigue.

1) To avoid excessive amounts of close-up eye contact, take Zoom out of full-screen mode or reduce the size of the Zoom window relative to the monitor to minimize face size.

2) Turn on “hide self-view” to avoid seeing yourself during the Zoom call. It is unnatural to be looking at yourself all day on a computer screen, and it would not happen if you were in a face-to-face setting. Research also shows it can be taxing on us, and there are negative emotional consequences to seeing yourself in a mirror.

3) Consider having your camera placed at a distance to allow for more mobility during a call. Also, let yourself turn off your camera during a video call if you need.

4) For long meetings, give yourself “audio-only” breaks where you not only turn off your camera but also turn away from the screen. This will give your mind a break from cognitive overload, including interpreting gestures and nonverbal cues that can be misinterpreted on video.

Foster Well-Being Outside of the Office

Focusing on well-being as part of the total rewards strategy is another opportunity for employers to help prevent employee burnout and demonstrate care. According to the 2022 HR Trends survey, the most prevalent health and wealth offerings include employee assistance programs (92%), immunization clinics (43%) and health risk assessments (32%).

Another opportunity for employers to emphasize well-being is by providing flexible work schedules to help with work-life balance, which is the #4 reason for employee resignation. When an employee feels more balanced and less overwhelmed, they will likely be more engaged at work, which decreases turnover.

Looking at global trends, companies such as Nike announced giving workers “a week off to prioritize mental health.” While closing down operations for a week may not be reasonable for many companies, offering employees an extra day or two to focus on their well-being, which is not a part of their regular vacation time, is a strategy that should be considered.

#4 reason for employee resignation is lack of flexible schedules to help with work-life balances.

The primary focus during the pandemic has been on health and well-being, but it is important not to forget about financial well-being. Seventy-one percent of HR Trends survey participants offer at least some type of financial well-being support to their employees, such as tuition reimbursement, scholarships and financial wellness programs.



Pro Tip: Employee well-being has many dimensions, including emotional, financial, physical and social. Consider doing a SWOT (strengths, weaknesses, opportunities, threats) analysis on your well-being program and challenge yourself to consider these various dimensions. You may be surprised to find additional ways to improve your well-being program and demonstrate care to your employees.

Ask Yourself:

What are you doing to promote a positive work-life balance?  

Putting Your Best Plan Forward

Your 2022 HR Plan

While the world—and workplace—is still navigating its way through unprecedented times, people are still at the heart of what you do. The challenges brought on by recent times have given HR professionals and company leaders an opportunity to consider new possibilities to connect with their employees. Being successful starts and ends with your employees—whether it’s attracting and retaining the best people for the job or fostering a fair and inviting workplace that promotes inclusion.

Results from this year’s survey offered insights into the biggest challenges companies are facing when it comes to their workforce, as well as some actionable steps to achieve success in increasing employee satisfaction. Focusing on enhancing engagement levels, setting fair compensation, increasing diversity and enacting well-being efforts can increase positivity, productivity and dedication.For 2022, build a strategic plan that leads with your employees’ best interests in mind. Consider ways to keep great employees committed to you so that your organization is not only strong today but will continue to be into the future.

To help you create the most powerful and actionable plan for addressing employee engagement in 2022, we put together some helpful questions to ask yourself along the way:

  • What are the greatest HR challenges that your company is facing as we head into 2022?
  • Are you coming up with new solutions to keep employees connected?
  • Do remote-work capabilities provide a reason to reassess your pay philosophy and ranges?
  • Are you making appropriate adjustments to your total rewards strategy based on the evolving needs of your employees?
  • Are you aware of how your policies can affect occupation and wealth gaps?
  • How do you show your commitment to furthering DEI?
  • How can you provide and communicate to your employees a clear path for career development?
  • How often do you provide intentional, quality feedback?
  • How do your employees perceive your intentions?
  • What are you doing to promote a positive work-life balance?
  • Are there flexible work arrangements that would work best for your employees?
  • What are your hybrid workplace best practices?

Looking for more information or what to learn more, contact us!

Methodology

QTI’s 2021 HR Trends report is based on data submitted by 273 primarily Wisconsin-based employers across a variety of industries and organization sizes. The majority of respondents are privately held organizations. The survey submission period
was July 27 – August 14, 2021. If you are interested in receiving the full survey results, please participate in next year’s survey. Contact us at QTI@QTIGroup.com to learn how.

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