CoAdvantage- The new year brings not only new goals, but new challenges for HR. Following another year of the pandemic, businesses are reevaluating their approach on handling all-things HR. Here are the top 5 HR trends to lookout for in 2022.
1: Falling Unemployment
Perhaps thanks to the so-called Great Resignation, labor issues have been plaguing many employers through 2021, especially in the service industry. The unemployment rate in the U.S. fell to 4.6% in October 2021, even lower than expected; and the Federal Reserve expects unemployment to fall below 4% in 2022. Federal Reserve Bank of Chicago President Charles Evans has even suggested unemployment could approach 3.5%. That’s astounding, given everything that’s been going on for the past 24 months. This means recruitment and retention will be top-of-mind issues for employers and HR teams well into 2022.
2: The Elevation of Human Resources
Unsurprisingly, the pandemic has had far-reaching and wide-ranging impacts on most businesses, but one result maybe is surprising: a greater appreciation of the true value HR generates for organizations. Ultimately, many organizations now understand that better performance in HR translates into efficiency, accuracy, and cost benefits that can help them endure and navigate unprecedented disruption. In turn, HR is increasingly focused on workforce effectiveness and agility and producing overall business value.
“The week that trillions of dollars of market value came out of the global economy because people could not work and consume and live normally—that really ended any debate over the value of HR to the enterprise,” John M. Bremen, managing director of human capital and benefits at Willis Towers Watson, told the Society for Human Resource Management. “HR’s seat at the table was solidified permanently.”
3: Shifting from Reactive to Proactive
Another consequence of the pandemic – and especially of the pandemic persisting for so long – has been to force employers into a posture of constant reactivity. Organizations are continually just responding to events and new developments and have struggled to get ahead of many of the issues caused by COVID-19. 2022 is likely to see a resurgence in efforts to be more proactive again. We can see that in the strategic investments being made right now, particularly in technology (and, within that, particularly in talent analytics).
4: A Push Toward Outsourcing
This follows from both #2 and #3 above: outsourcing at least some HR function is the natural option when it comes to improving HR operations and getting on top of workforce needs. According to consultancy group Deloitte, the top 3 reasons for outsourcing are standardization/efficiency (88%), reducing costs (84%), and driving business value (73%) – exactly what employers are looking to do right now. Even better, 59% also say they are able to use outsourcing to develop and extend business capabilities. Just as HR as a whole is seeing its status rise, so is HR outsourcing.
5: Reskilling and Upskilling
Another major trend HR teams are likely to face in 2022: re-skilling and up-skilling existing employees. This follows from both the need to get maximum utility out of existing employees (especially when operating in a sector facing labor shortages) and the desire to be more proactive again. In fact, 72% of HR leaders believe that reskilling is the single most important factor shaping future workforce composition, and nearly nine out of ten (87%) believe it will help with retention as well as meeting current workforce needs.
CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about CoAdvantage’s ability to create a strategic HR function in your business that drives business growth potential, contact us today.