Understatement of the year award incoming, but 2020 and 2021 changed the way we work forever. But like most things in life, it’s how you deal with change, and 2022 is certainly the year HR will have to ride the transformation waves that rippled across the past two years.
So, what are the key HR trends for 2022 going to be and how can you prepare for them? From saying goodbye to the office perks of old to saying hello and how can I help to your senior business leaders, here are five HR developments to keep an eye out for in 2022.
- Rising internal mobility and a shift in the hiring process.
- Managing multi-generational workforces.
- Aligning with business goals to drive impact.
- Diversity and inclusion initiatives.
- The revamping of employee perks and benefits.
Rising internal mobility and a shift in the hiring process
Why wouldn’t you want to promote from within!? You’re giving your people a path to progress and reaping a load of productivity and budgetary benefits for yourself. In LinkedIn’s Global Talent Trends 2020 report, talent professionals had this to say about hiring internally:
- 81% agree that it improves retention.
- 69% agree that it accelerates new hire productivity.
- And 63% agree that it accelerates the hiring process.
But 2022 could really be the year that internal mobility gets cranked up a notch! 51% of learning and development pros stated that it’s a greater priority now than it was pre-COVID, in LinkedIn’s Workplace Learning Report 2021. Since the pandemic began, internal hires make up a greater share of all hires, rising by 19% from 16.5% in April-August 2019 to 19.6% in the same period of 2020.
And that retention stat from 2020 is holding even more true today! According to the same 2021 report, employees at high internal mobility companies stay for twice as long as their low mobility counterparts. We’re talking 5.4 years versus 2.9 years, so there’s really never been a better time to work on your company’s career progression plans.
Especially given that HR budgets are on the chopping block and recruitment budgets are in the biggest danger of being chopped. 34% of HR leaders are planning to slash their HR spend, and 30% agree they’ll be cutting back on the hiring costs – but we’ve got more on those budget dilemmas later.
Managing multi-generational workforces (and whether that’s the right mindset at all)
We’ve got to be careful that work doesn’t start feeling like a family reunion, because for the first time, we’ve got the potential for five different generations in the workplace at the same time. The multi-generational workforce now includes everything from the traditionalists (born 1927-1946) to Generation Z (2001-2020).
One of the big questions right now is how you manage the multi-generational workforce. The bigger question is whether this is the right mindset and if they really need managing from an age perspective.
More than half of the respondents in Deloitte’s 2020 Global Human Capital Trends report revealed that they consider generational differences when designing and delivering workforce programs. But only 6% believed that their leaders are equipped to lead a multigenerational workforce effectively. That’s the first red flag around whether this is a mindset issue…
Knowing the differences while managing differently
First of all, it’s important to recognise the differences between the generations. For a start, you’ve got people who wouldn’t see a computer until decades after they entered the workforce alongside digital natives who are so tech-savvy they make the previous generation look like Luddites in comparison.
Secondly, these people are at different stages in life and that will influence what they want from a role. Biospace’s Ideal Employer Report revealed that Boomers “didn’t seem as interested in promotional opportunities and career advancement as younger groups”, whereas meaningful and interesting work was more important. While millennials ranked opportunities for promotion far higher than other generations, with 81% stating that it was important.
So, yes there are clear differences between generations, but there are bound to be overwhelming similarities too! The Deloitte report introduces Gina Pell’s Perennials concept; “an ever-blooming group of people of all ages, stripes, and types who transcend stereotypes and make connections with each other and the world around them.”
Rather than trying to spin too many plates and focus on generational divides, should our attention be on the things people have in common? Deloitte’s report highlight summed it up nicely:
“…all workers are becoming more vocal about their needs—and those needs, it turns out, are more similar than many may have previously thought. Many preferences once associated with millennials—from the desire to work for an employer that reflects their values to the preference for flexible schedules—hold true across all generations.”
Too much focus on big data means you forget the little guy, the individual in those groups. Demographics like age, seniority, department and gender are data sets that respondents in the Deloitte survey said they’d find valuable and are relied on frequently. But work behaviours, personal attributes, mindsets and attitudes are used far less often!
Like that potential family reunion we mentioned at the start, the trick is in finding the balance. In discussing the topics that transcend generations and focusing on the things that bring you together, as opposed to what separates you.
Aligning with business goals to drive impact
We mentioned it earlier, but the HR budgets are looking like they’ll be trimmed as we move into 2022! Gartner’s 2021 HR Budget and Staffing Survey revealed that more than a third (34%) of HR leaders are planning to decrease the budget for their HR function this year. Which is double the 17% who said the same thing in 2020.
- 30% are planning to slash the recruitment budget.
- 25% will cut L&D spend, the second-highest reduction.
- Although, interestingly, 37% plan to increase their L&D budget. The second-highest increase behind diversity and inclusion spend.
What the report and this statistical snapshot show us is a mindset shift. While some companies will cut back on L&D to increase spend in different areas, others will do the opposite – and the same applies if we swap L&D for the other topics in Gartner’s list, like HR technology or total rewards.
But the best way to ensure that you’re not affected by these budget cuts or that those cravings for savings don’t hit you in the pocket is to prove your impact and value. This is why aligning with business goals and objectives is a crucial HR trend for 2022.
SAGE research backs this up and really shows an opening for some HR rebranding or relationship management. Here are three takeaways from this study.
- Alignment – Despite 81% of C-suite executives feeling HR’s priorities are aligned to that of the overall business, 59% said HR are not playing a leading role.
- Insights – While 94% of business leaders have access to some form of people data from HR professionals, 68% are not fully reliant on them.
- 62% of HR leaders admit to not being able to use people analytics to spot trends and provide actionable insights to inform business-related decisions.
In summary, C-suite executives don’t think HR is playing a leading role, people leaders aren’t using people data and even HR leaders are struggling to spot trends in the numbers that allow them to influence business decisions.
Which steps can HR take to align with business objectives better?
So, how does HR turn this around! One step is to start acting more like performance consultants, to diagnose problems before prescribing solutions. Speaking with senior leaders to understand their goals and pain points makes it far easier to align HR activities with those objectives.
And if you’re lacking that data analytics talent in your team, think about upskilling someone (or bringing somebody in) to crunch those numbers and help you spot trends. For example, if you’re noticing a particular pattern in when people leave the company or the lack of an in-demand skill, you can help others see the value in people data.
The same Gartner survey revealed that 34% want to increase spending on HR technology, but you’ve got to convince them it’s worth their time and that they should invest more in the people behind the tech too. And speaking of HR tech, we’ve got the perfect guide for building your winning stack right here.
Wait, didn’t HowNow include that in their 2021 predictions? We did! But the numbers tell us not only were we right (who doesn’t love hearing that) but that we’re well advised to pop it in for 2022.
We’re back with another Gartner stat, this time that a massive 45% of HR pros plan to spend more on diversity and inclusion and 46% will maintain their previous budget – meaning just 9% will scale back on D&I spend.
The second annual HR Sentiment Survey conducted by Lyra Health, Boston University and Future Workplace backs this up, naming DE&I as the second-highest HR priority. Only employee wellbeing and mental health finished above it, in their survey of 200 senior HR leaders across the US.
But it’s not an initiative that HR can lead alone! First of all, there’s the understanding issue; according to Ideal, “70% of companies believe they are effective at attracting and retaining diverse employees, yet only 11% actually understand what it is.”
So, the messaging has to be right and everyone needs to be on the same page. Speaking of which, it’s helpful if senior leaders are showing commitment and passion when it comes to D&I. More importantly, it needs to fit with your brand and your people – for example, simply sending people on a one-day unconscious bias training course could feel like a token effort to some and rub sceptics up the wrong way given that its impact has been heavily questioned in recent times.
The revamping of employee perks and benefits
Employee benefits really went through a weird phase in the 2010s. At the midpoint of the decade, it was a surprise to find room for any desks with all the ping pong tables, beer pumps and free pizza (normally on Fridays) that were on offer.
Once they were old hat, it seemed to spark a race to offer the weirdest perks, and we reached the likes of nap pods, free SCUBA certification, a ‘posh bog roll’ guarantee and even botox injections.
Hopefully, people didn’t take up that last offer because 2020 and 2021 taught us two things: there’s plenty to frown about, and employee perks like this are pretty much redundant.
Perkbox surveyed 1,532 UK employees to find out what perks they want in 2021 and the findings were quite interesting. None of the perks people named as making them happier in their job were explicitly linked to being in the office – although sending a free breakfast to every employee working remotely might be tricky.
Work-life balance really sums up the theme here. People want discounts or subsidies on the personal things they’re doing outside of work, they want to travel more often and head into the office less often, and they want recognition for their hard work even if they work from home!
In fact, a recent study from Kansas State University and the University of Mississippi’s Novak Leadership Institute revealed that younger workers are concerned about how their managers treat them. In particular, there are two types of respect they crave:
- Being valued as a team member.
- Being respected as a person who has a life outside of work.
Back to our Perkbox survey briefly, when asked about benefits that would improve wellbeing, more flexible hours, mental health days and free counselling sessions joined some of the perks in the happiness list.
50% of non-remote employees want contributions towards household bills and 46% for their home office equipment, while those heading into the office surprisingly named free breakfast and lunch as their top priority.
Yet only a quarter want subsidised commuting costs, which you’d imagine would be far more helpful than a fry-up on Fridays. But maybe the way to your employee’s hearts is through their stomach after all.