HR leaders grapple with new complexities

2022 survey builds on lessons learned

Human resources professionals continue to work to ensure their organizations have the talent to achieve their business goals, while employees continue to shape what the future of work will look like coming out of the pandemic. This requires leaders to listen closely and respond to what their employees need if they are to thrive in this complex landscape of talent management.

In April 2021 when we surveyed HR Leaders we found that employers were accelerating their focus on talent management on every dimension (hybrid work, compensation, benefits, learning, skill development and culture) to “stay in business.” Our new 2022 HR Leaders survey of 561 industry professionals explores how they have managed through the issues outlined in this first survey, the differences in perceptions between employees and HR leaders, and what new opportunities have risen in our second State of Work in America survey of more than 5,000 workers.

How does the work and focus of the last year in talent management measure up now? In looking at this data, it is closely aligned with the work HR professionals are already doing, where more than 50% of engagements are focused on talent acquisition, retention, rewards, and culture.

The research is intended to present a portrait in time of the initiatives, activities and priorities of human resources managers and executives, said Tim Glowa, a principal of Human Capital Services at Grant Thornton. While at times we contrast findings with the views of the State of Work respondents on similar topics, the best use of this survey is to be a guide to compare your company’s practices to what is being done throughout the industry.


 

Assessing the new workplace

We asked HR leaders to tell us about the pervasiveness of the change to hybrid work. Seventy-one percent of HR leaders said their companies had a hybrid workplace, with another 6% stating that all work was done remotely. However, of the HR workers whose companies offered either hybrid or all remote work, half reported that these policies only applied to 30% to 50% of their workers.

So, while employees desire the option, and organizations understand it is a key consideration for talent, it is not pervasive in every industry or role within an organization and HR leaders don’t see much movement in this regard beyond where their organization is today as shown in the State of Work report.

That commitment is buttressed by apparent gains in productivity from work-at-home arrangements. Sixty percent of HR leaders said the productivity of remote workers either somewhat increased or significantly increased and an even larger percentage, 71%, thought the level of productivity increased in the last three months. Forty-two percent of HR professionals say they believe work-at-home employees are simply working more hours.

We know from previous surveys that employees did not lose productivity when working at home, but often gained it. A question that should begin to concern HR staff is the long-term loss of separation between “work” and “home.” Yes, the quality of work overall doesn’t seem to have suffered, but as we discuss below, concerns about mental health are increasing among employees. HR staff should watch for signs of employee burnout to consider addressing them though programs geared towards encouraging in-person work attendance, as COVID-19 restrictions permit.

Discovering employee motivators

While much of our data shows HR leaders have kept apprised of employee attitudes toward their workplace and place within their companies, there are some notable differences in perceptions between HR leaders and employees.

• Their manager is the most stressful part of their day (45%) of HR leaders agreed in contrast to 28% of employees.
• My organization provides a safe place for employees to speak out on different matters -- 75% of HR leaders agree in contrast to 57% of employees.
• My organization takes an active role in helping employees overcome unconscious bias” (agreed on by 70% of HR leaders and 59% of employees)

One of the most striking finds is how differently HR leaders perceive how the lack of face-to-face collaboration from COVID-19 restrictions has affected engagement from how employees feel. More than half of HR leaders agree this situation has diminished engagement, but less than a third of employees felt that way. Our State of Work survey found demographic differences here. HR leaders should be aware of the level of satisfaction and productivity many employees experienced working from home, as described in our State of Work in America story, and not make policy decisions based on the assumption employees are clamoring for more in-person interactions.

Despite this positive work-at-home experience, HR leaders must also be aware of the pervasive attitude of employee uncertainty about the future they may not share. When asked to rate the statement “I’m optimistic for the future” 76% of HR leaders agreed, compared to only 53% of employees.

Making the Great Resignation a great opportunity

The Great Resignation, the unprecedented period of job turnover that followed on the heels of the widespread availability of COVID-19 vaccines, is now in its second year. Data released in May by the Labor Department shows continued volatility as 4.53 million workers quit their jobs in March, eclipsing the record of 4.51 million last November. Meanwhile, unemployment remains low at 3.6%, so those looking for jobs are having luck finding them. HR leaders must take advantage of this period of job mobility before it ends.

When asked why employees left their company, HR leaders cited base pay and advancement opportunities (32% each), benefits (other than health and retirement) (27%), bonuses or incentives (22%), and COVID-19 protocol concerns (20%) as the top reasons. Twenty-one percent of our State of Work in America respondents did leave their company in the last year and, when asked, offered reasons for doing so that matched HR leaders’ perceptions well. HR leaders matched the top four of these employees’ reasons. They slightly overvalued COVID-19 protocols while slightly undervalued employees’ concerns about autonomy in the work and feeling undervalued. HR leaders ranked those sixth and ninth, respectively, as reasons employees left.

While HR leaders and employees have a general consensus on why employees leave a company, there are some related statistics that show some divergence on compensation trends for employees who did not leave. When asked why employees are staying at their companies, HR leaders thought bonuses or incentives, career opportunities elsewhere and company reputation were significantly more important than employees did. What motivator did HR leaders underrate? Job security was much more important to employees, not surprisingly after the shocks of the recent economic downturn.

When considering other job offers, both HR leaders and employees agreed increased base pay was a primary factor. But HR leaders still undervalued the strength of this motivation. Employees spoke clearly that increasing base pay was a major factor either when taking a new job or when rejecting a job offer, 17 percentage points higher for the latter than how HR leaders rated it.

With nearly 80% of HR professionals believing the current war for talent will last more than one year, we asked about HR challenges in their own companies. More than half cited employee attraction (67%), talent shortages (58%), strategy execution risks due to worker shortages (56%), and workers approaching retirement age (57%) as key concerns for their organizations. Not surprisingly more than half are instituting new recruiting protocols (67%) and new retention strategies (71%) to address the continued impact of the Great Resignation.

Our employees identified “taking too long to make an offer” as a top reason they didn’t take a job offer and HR departments seem to be aware of this. HR leaders ranked this first among the reasons employees didn’t take a job, slightly above inadequate base pay and inadequate benefits. HR leaders have a huge amount of control over the pace of a company’s hiring process, so identifying barriers and stopping points in the process should be a constant high priority.

Boomerang employees, those that return to a company for a second job stint, are an important enough group that a company’s offboarding procedures need to be done with care so as to not drive away future employees. When asked what percentage of employees are boomerangs, 28% indicate 20% and 30%. This seems a little high – but our State of Work research shows that 40% of former employees would consider a return, so the importance of severing ties to an employee positively cannot be overstated.

What this means is that HR leaders need to make certain their offboarding practices are as effective and efficient as can be, said Kim Jacoby, director of Human Capital Services at Grant Thornton. An increasing percentage of new hires are rehires or alumni referrals, so keeping good relationships with former employees should be a priority of any human resources department.

Drivers of stress, and what to do about them

When asked to name the three top causes of stress for employees, HR leaders cited childcare/eldercare, career advancement and medical issues as their top three. In our State of Work survey, the top three were personal debt, medical issues and mental health, matching only one of employees’ top three. The lack of attention drawn to mental health (HR leaders ranked it sixth) is concerning because, as we noted in that story, mental health has suddenly emerged as a significant concern among American workers and HR leaders need to evaluate this. HR leaders ranked personal debt 13th among our list of stressors, and one could make the case that addressing career advancement and addressing personal debt are just flip sides of the same coin. Another way to look at it is that better compensation means much more to an employee than a higher title.

Employee well-being is a key retention strategy, as previously mentioned, so besides talking about what factors are most important, HR leaders were asked to assess how well they were doing addressing five aspects of wellbeing – emotional, financial, physical, professional and social wellbeing. HR leaders said employee well-being has become somewhat to much better The last two State of Work studies have asked whether “I have confidence in the senior leadership of my company” with those agreeing or completely agreeing rising from 57% to 61%.

We also asked professionals to talk about what types of work they are doing and the considerations they are making about changing some of those initiatives. First off, 63% said they are likely to explore a revised business model because of COVID-19, so adjusting workplace programs and rules in response to the pandemic is still top of mind.

Additionally, we found HR leaders perceptions on the effects of COVID-19 on the workplace to be more in line with employees’ expectations. For instance, HR leaders strongly identified “Flexibility in how/where/when employees work” as the single most important COVID-19-related work model revision and this strongly matched how employees similarly saw a flexible workplace as a top attractor to a company.

The sizable majority (72%) also agreed data drives their organizational decisions, but how is that being obtained. Outside consulting certainly is a popular option. Seventy-four percent say they have a strong, trusted relationship with an HR consultant, with slightly more than half (55%) indicating they will spend more on outside consultants in the next year.

As human resources departments continue to monitor and develop programs to adapt to changing workplace environments, It becomes more important to engage with employees effectively. HR leaders should understand their stressors, needs and expectations in order to build programs and prioritizations that create real value for workers. Finally, for HR leaders to make any necessary changes to policies that would address these concerns, they must first have the authority to do so, and that means being closer to where decisions are made.

“When we’re talking about company leadership, HR must have a seat at the table,” said Glowa.

Conclusion

HR leaders are now dealing with the fallout of an unprecedented disruption in working conditions. While the technological ability to switch to remote working locales for so many undoubtedly saved countless billions of dollars and millions of jobs, HR leaders are now in the midst of reckoning with the “human consequences” of these changes – assessing a new understanding of “work/life balance,” adjusting to satisfy new benefits expectations and recognizing new stressors on their employees.

Our report identified what HR leaders are doing and thinking about these issues, and in that way, it can be used as a lens with which to examine an individual company’s practices. In all circumstances, though, effective human resources policies rely on the presence of these three factors:

• Listening to employees through rigorous, non-biased methods
• Assessing and deciding on solutions that address the issues in a cost-sensible manner
• Leveraging HR’s status within a company’s leadership hierarchy

to carry out the programs that will help ensure a company’s prosperity by attracting and retaining an engaged, talented and secure workforce.