Heading into the latter half of 2022, there are several HR trends that continue to have a tremendous impact on the way organizations are having to shift and adjust when it comes to the health and wellness of their people. Over the course of the last couple of years, HR professionals have been faced with many challenges. Challenges that range from; health impacts of COVID-19, needing to address remote HR and remote team communication concerns, a focus on mental health awareness and support programs, and an overall shift in attraction and retention strategies. It is clear that the workplace continues to transform, and while the pandemic has had a significant impact on these changes, various social movements and technological advancements have also played a major role.
These types of challenges have shifted the role of HR and in many ways the way that HR impacts the overall organization and the employees. And from these challenges, we can see key trends that have emerged which will play a huge role in the strategic roadmap for the remainder of this year, and planning around HR initiatives and strategies for 2023.
In this article we outline the key HR trends to monitor that will impact your business for the balance of 2022 and into 2023.
1. Continued High Inflation Rates and Employee Compensation
Inflation in the United States has seen its most significant 12-month increase since 1981, creating a challenging economic environment for both organizations and employees. According to the Bureau of Labor Statistics (BLS) consumer price index, the U.S. inflation rate had increased by 8.6% as of May 2022.
While some economists predict this rate will ease by the end of 2022, whether inflation will lower¬ and by how much remains to be seen. Most employees have likely been impacted financially due to inflation and ongoing shortages. In turn, competitive pay remains a top demand of employees in today’s labor market. Employees desire various types of assistance during this time, and in turn, employers are exploring strategies. As inflation has increased, so has pay for many organizations.
The BLS reported that average hourly earnings had increased 5.2% year over year as of May 2022. Although these numbers trail current inflation, this does show that employers are increasing pay slightly. According to our 2022 Attraction & Retention Benchmarking Overview, 75% of employers consider increasing compensation to meet current demands as one of their top challenges for attracting and retaining employees.
While large compensation bumps are not feasible for all organizations, even small increases can help employees address heightening day-to-day costs. Alternatively, allowing employees to work remotely can help reduce expenses such as commuting—which has become more expensive due to increased gas prices. Remote working options can also help employees save money on lunches and other day-to-day expenses that come with going into the office.
Options such as remote or hybrid work can be a perk for employees and can also be viewed as a benefit in lieu of greatly increasing wages in some cases.
2. Remote and Hybrid Work Challenges
As many employers have started adapting to more permanent remote and hybrid work models, these arrangements come with new challenges, among which is the need to reconsider team dynamics and communication. Employers may want to hold weekly team check-ins and establish clear guidelines surrounding communication and the various platforms an organization may use for different purposes.
The lack of in-person communication that accompanies remote work can easily lead to miscommunication within an organization, so employers may want to be intentional about prioritizing their team dynamics if they want teams to thrive in the remote environment. Further, ensuring employees feel connected to each other and the organization is essential to the success of remote and hybrid work models.
According to Gartner, only 24% of hybrid and remote employees feel connected to their organization’s culture. However, even in remote environments, employers can take steps internally to foster better company culture and increased support and communication. Because not everyone will be in the office sharing the same experiences daily, managers can look to create positive microcultures—the specialized subculture of a group—within their teams. While broad company culture is still important, creating microcultures can enhance employee connectedness and may ultimately help retention if employees feel a sense of culture as a result. Among other remote work challenges, employers should be aware of wage and hour compliance requirements for remote and hybrid employees.
The Fair Labor and Standards Act still applies to remote working arrangements, so employers need to be cognizant of the hours their employees are working and ensure that workplace practices, policies, and processes account for these employees. Employers should review all applicable laws and regulations and ensure their remote and hybrid practices are in compliance.
3. Continued Tight Labor Market
The labor market is not likely to become less competitive in the last quarter of 2022 and into 2023. While employee quit rates remain high, unemployment rates keep trending down as employers struggle to fill open positions and keep valuable talent. This tight labor market is what economists refer to as the “Great Reshuffle”; many employees realize their priorities have changed, and this has kickstarted their desire to move more readily between different jobs to find ones that align with what they prioritize.
To illustrate the impact of talent challenges, over 85% of employers responding to our latest survey reported difficulty attracting new employees, many of which consider it a top-five business challenge. In response to this issue, employers are exploring various combinations of strategies to find and keep employees. In general, employers are struggling to attract and retain top talent, but employers can gain an edge by staying up-to-date with the desires of employees in this labor market. For example, employers could monitor benefits trends so that they can provide a package of offerings that is both cost-effective and meets employee desires.
In other cases, employees are also focusing on finding a workplace that shares their values. Knowing this, employers may not only consider various benefits they can offer their employees but also establish programs that allow employees to be involved in the company’s philanthropic efforts and keep employees informed about the company’s social initiatives.
4. Upskilling and Reskilling Employees
As technology, automation and digitization continue to advance, the skills required in the workplace will continue to change. As a result, the World Economic Forum predicts that half of all employees will need reskilling by 2025, but this has shown to be a significant attraction and retention challenges. According to our 2022 Attraction & Retention Benchmarking Overview, 41% of employers consider addressing current and future skills gaps a top three attraction and retention challenges.
Two ways employers are ensuring their employees have the key skills needed to succeed and grow within the organization are upskilling and reskilling:
- Upskilling is the process of expanding an employee’s current skill set so that they can contribute more to the company within their current role.
- Reskilling is the process of teaching employees new skills that allow them to take on an entirely new role within the organization.
Many employers have started reskilling and upskilling employees by providing training that increases general digital literacy. Whether this is done by providing ongoing training, microlearning options, or refresher courses for those who may already know about the skills being taught, both reskilling and upskilling ensure that employee knowledge is current and continually developing. As the year continues, this trend of upskilling and reskilling employees is not likely to slow, even as we move into 2023.
According to a report from Gartner, almost 60% of HR leaders reported that building critical competencies is HR’s number one priority for 2022. As a result, many employers are helping build these critical competencies; our 2022 Attraction & Retention Benchmarking Overview that 34% of employers are now offering more upskilling and development opportunities to improve employee retention. Hiring new employees who already possess the skills that are currently in demand is one way to bridge gaps. However, ensuring that current employees are able to develop new skill sets can help retain top performers—and create a more positive workplace culture with an engaged workforce.
5. Flu Season and COVID-19
With the arrival of fall, it’s never too early for employers to prepare for cold and flu season. The Centers for Disease Control and Prevention recommend individuals receive a flu vaccine by the end of October; however, it may be a good idea to plan on receiving vaccines by late August. Health care practitioners such as the Cleveland Clinic expect demand for the vaccine to be high, so employers may want to start preparations before the season is in full force.
One way employers can help mitigate this health risk is to encourage their employees to get vaccinated and offer on-site workplace flu vaccine clinics. Employers who are interested in offering such an option may be wise to book these clinics well before October to help reduce the possibility of supply chain delays that could occur later in the flu season. As in previous years, it is expected that COVID-19 and the flu season will coexist. Even though the course of the pandemic is hard to predict and plan for, what employers can do now is prepare for flu season. If employers do not plan for this now, they will likely be forced to deal with the repercussions later.
The pandemic and its effects, such as long COVID-19, will continue to affect employers moving forward. It’s important that they stay up to date on the pandemic’s evolution so they can respond in a timely manner should new developments arise, such as an uptick of cases and any corresponding safety measures.
6. Employee Mental Health and Well-being
Health and wellness have been ongoing challenges for employees during the COVID-19 pandemic. To illustrate the current impact, a study published in the Journal of Adolescent Health found that 48% of young adults reported mental health symptoms during the pandemic. This has increased mental health awareness and resources within the workplace. In response, 23% of employees reported their employers added new mental health benefits since the start of the pandemic, according to a recent survey by the Harris Poll conducted on behalf of Fortune.
These programs include employee assistance programs, stress management courses and mindfulness app memberships. For employers, the goal is to provide employees with adequate mental health resources so they feel healthy and supported, which can aid in efforts to retain employees. Employers are also implementing programs that incentivize employees to be healthy. Promoting and achieving a healthy workforce often improves morale and productivity and has an overall positive effect on mental health.
There are a variety of wellness benefits employers can offer to support their people. Some potential options include providing in-office perks for nutrition, fitness, stress management, or gym memberships. Additionally, more employers are utilizing telemedicine because it’s a very effective way to provide employees with accessible resources. According to Wellable Labs, 80% of employers plan to invest more into telemedicine this year, so this remains a popular mental health solution among employers.
For many employees, taking time off to go to the doctor can often be a time-consuming and expensive undertaking. It may also be difficult to access mental health services depending on their locations. Telemedicine can help lessen these issues by providing fast care to those who may not otherwise have been able to seek help effectively or efficiently. By having patients meet with mental health professionals over the internet, employees can get the care that they need more quickly.
Telemedicine is also beneficial to employers because it can reduce the amount of paid time off employees would need to take if they physically visit a mental health specialist. Ultimately, telemedicine is an option that employers can provide to help employees access the resources they desire.
In the last quarter of 2022, many HR trends seen earlier in the year are likely to continue. It’s essential for employers to be aware of these trends—such as continued inflation, the tight labor market, and increased emphasis on the importance of mental health— as understanding today’s challenges can help inform employers’ strategies moving into 2023. Ideally, employers can leverage this information to stay on par with current trends and create better working environments for their employees.
For more information about HR trends, or for any questions about hr, benefits, payroll please do not hesitate to reach out. Now is the time to plan for 2023 and we hope these key trends will help provide insights into ways to support your business and most importantly, your people.