After a year that saw ongoing turnover, a complex economic situation including record inflation and startlingly high levels of employee burnout and stress, it’s no wonder that HR leaders are concerned. Exactly what is mostly capturing their attention? That’s what HRE sought to find out in our annual What’s Keeping HR Up at Night? survey.
Nearly 500 HR and technology professionals responded to the survey this fall, sharing the issues challenging their organizations’ people functions and what they’re doing to address them.
Here are a few of the most important themes we noticed in our research:
- HR leaders are laser-focused on hiring and retention.
Given that 2022 saw an average of 4 million Americans voluntarily leave their jobs each month—and PwC estimated that about 20% of all workers would quit throughout the year—it’s no surprise that HR professionals are concentrating on recruiting and retention, by far. In fact, more than 47% of respondents cited hiring and retaining key talent as their most pressing challenge, followed by improving company culture (18%) and learning and development (13%). When asked how they were spending their time, recruiting was the most-selected focus (32%), ahead of employee experience and leadership development; retention ranked sixth in this area.
Industry analyst and HRE columnist Josh Bersin—a keynote speaker at the upcoming HR Tech Virtual Conference, Feb. 28-March 2—says the push to prioritize hiring and retention is multi-pronged.
“Companies are transforming and creating new roles, most businesses are still growing despite the slowdown and the talent market is tight—people are having fewer children and a significant number of people have left the workforce,” he says.
- Given current conditions, HR stress is high. The pressure to maximize the potential of the people function, despite these challenges, is weighing on HR professionals. According to the survey, more than 29% of participants said their stress levels have increased dramatically in the last year, while 47% reported they’ve increased somewhat. Less than 4% said their stress has decreased dramatically or somewhat.
Ben Frasier, vice president of HR at Billings Clinic, recently wrote that the crisis of HR burnout has been a long time coming. After all, in the last three years, HR was tasked with heading up COVID crisis plans, delivering pandemic-related layoff news, managing shifts to remote and hybrid work, managing changing health guidance and, more recently, struggling to combat pandemic-driven waves of “quiet quitting” and turnover.
“Companies need to recognize that their HR staff are vulnerable,” he says—not only to resigning but to the physical and mental health impacts of long-term stress. To be proactive about addressing HR burnout, Frasier suggests company leaders ensure HR has a seat at the table, invest in wellness programs and prioritize flexibility.
“The HR crisis is yet another casualty of the pandemic,” he says, “but also offers an opportunity for organizations to rethink their values and the way their work environment and policies affect their employees.”
- Culture is a growing focus. More than 18% of survey respondents selected improving company culture as a top challenge, with only recruiting and retention being more of a priority. That represents a significant jump from the 2021 survey, when it ranked fourth.
Bersin says the emphasis on culture goes hand in hand with HR’s hiring and recruiting challenges, along with rising levels of employee burnout.
“Mercer research shows that 81% of employees are ‘burned out,’ ” he notes. “These employees are at risk of leaving, quietly quitting or just working unproductively. Companies are desperate to get people aligned, engaged and productive even as the economy slows.”
- HR is eager for more investment in tech. According to the survey, the most important workforce/HR technologies being used by respondents are HRIS (44%); core HR, including payroll, time and attendance and benefits enrollment (42%); and learning and development, including LMS, upskilling, reskilling training and coaching (28%). But, HR leaders want to do more with their tech.
When asked about the technology their organizations are most in need of right now, most pointed to L&D tools, followed by people analytics and performance management. Yet, HR professionals are not optimistic about actually being able to access such solutions. Almost 84% said they either wouldn’t have the budget to invest in those needs in 2023, or they weren’t sure.
This comes amid a new report from McLean & Company that found “significant lags” in HR digitization, with nearly 40% of HR professionals surveyed citing insufficient budgets for the delay. Yet, the report authors wrote, the benefits of HR digital transformation should move leadership to allocate more funding for innovation.
“[HR tech advancement fuels] a more effective and strategic HR department,” they wrote, “equipped with the ability to make data-driven decisions.”
- L&D is having its moment. Throughout the What’s Keeping HR Up at Night? survey, respondents pointed to their rising reliance on learning and development to meet today’s talent challenges.
For instance, in addition to participants ranking L&D tech top on their wish list, L&D ranked third—after recruiting/retention and improving culture—among the challenges facing today’s HR leaders. When it comes to how HR leaders are spending their time, most are focused on recruiting, followed by employee experience and L&D. But, many feel strapped for resources in this area: Nearly half said their HR departments weren’t adequately staffed, and the L&D function ranked second (only after general HR) for where participants would like to see more staff added.
The heightened focus on L&D is something the Josh Bersin Academy has also seen through its research, Bersin says. Today’s HR leaders aren’t just, however, looking for the traditional training programs; they want to tap into offerings like capability academies and talent marketplaces to promote employee growth.
“Providing ongoing training programs is no longer enough,” he says. “Companies want their L&D departments to be laser-focused on the key areas of business need. Our research shows that L&D departments that focus on employee growth are seeing four to five times higher employee engagement than their peers.”