State of People Strategy
Published on 17 Dec 2022
When word of the COVID-19 epidemic first spread over the globe in 2020, the workplace underwent a rapid transformation. HR departments struggled to adjust to the new remote work reality. As employees battled to find a work-life balance, burnout and mental health difficulties increased.
New tools, systems, and procedures were needed, and several were promptly implemented.
In 2021, a new difficulty arose: the so-called "Great Resignation." As word of the Great Resignation spread via the media, fifty percent of respondents to our State of People Strategy study reported an increase in employee-initiated departures. This occurred as employers scrambled to fill job openings amid an unprecedented labor shortage. Engagement and talent acquisition was the top HR goals during that year.
Today, the landscape has shifted significantly. The majority of the anxiety about hybrid and remote employment has gone. Half of this year's poll respondents anticipate maintaining a remote workforce of 50% or more during the next year. Another 23% anticipate maintaining a remote workforce of 90-100 percent. While HR teams are no longer in a panic, they nevertheless put in the effort to determine how to maximize hybrid work.
The Great Resignation and the associated employment boom are coming to an end. However, does this indicate a more engaged workforce? Or of increasing prudence on workers confronting a volatile market, rising interest rates, and the possibility of a recession? Everything points to the latter: An additional study conducted by Lattice in the spring of 2022 revealed that 74% of US workers were still actively seeking new employment or were open to new chances during the following six to twelve months.
However, prospects for these career searchers may be scarce: This year, talent acquisition (recruitment) dropped from the second-highest HR priority to the eighth-highest.
After years of battling hybrid work and talent shortages, the most effective HR directors are shifting their methods to accommodate new challenges and increasing employee expectations.
Investing in Alteration
One thing stays consistent amid global change: HR departments prioritize attracting and keeping talent. If the Great Resignation was the primary reason for retention concerns in 2021, then insufficient resources and an uncertain economic outlook may be the leading factor in 2022.
When respondents were asked to rate their key performance indicators (KPIs), voluntary turnover topped the list. Involuntary turnover, which ranked sixth last year, is now second.
Moving on to HR's objectives with the greatest importance, employee engagement topped the list. All of this occurred at the cost of talent acquisition, which fell to the bottom of the list. For most teams, shifting the needle on retention and engagement is tough.
Nevertheless, our investigation revealed that the most effective HR teams have key characteristics. First, these top performers invest in the most important initiatives to workers. In addition, they are more likely to tie remuneration to performance, give salary transparency and fairness, and engage in coaching and skill-development programs.
These promises result in more employee engagement and performance. But there are other things these exceptional teams excel at. Top HR departments gather more data and conduct more performance evaluations. And this data supports their HR initiatives and enables them to pinpoint areas where genuine change is required. Last year, the same positive feedback loop emerged: a continuous cycle of investment and assessment that enables teams to accomplish or surpass their objectives.
These results and others revealed in this year's study are examined in further detail on the following pages. We will describe the major patterns and compare them to previous years. And to go further into these patterns, we will speak with global HR strategy professionals to see how our data relates to their on-the-ground observations of current HR developments.
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