Covid-19 is a seminal event in many respects, but its aftermath has created new and unparalleled challenges for HR professionals.
The massive initial layoffs are now manifesting in labor shortages in many geographies as the economic recovery begins. Companies are struggling to implement new models for the future of work and determine the right balance between onsite and remote work for their employees. The urgent emphasis on diversity and inclusion in the workplace has become our times’ social siren call.
In this challenging environment, HR professionals are tasked with maintaining a vibrant employee pipeline for the business’s success while simultaneously managing a very different work environment.
Organizations must understand and address the top five HR challenges of 2021 as they pivot to a new post-pandemic reality. Where we work and how we work are likely to continue to undergo rapid changes. Agility will be critical.
Top Five HR Challenges to Address and Overcome in 2021
1. Are your employees ready to come back to the office?
The pandemic has altered how we will work in the future. Work is not necessarily a place anymore, and some form of remote work seems here to stay. Many companies are canceling their plans to build offices. Pinterest recently paid $89.5 million as a penalty to cancel plans to build a new 490,000 sq. ft. office in San Francisco.
According to a Remote Work Survey done by PwC, 55% of executives – having seen the productivity gains achieved in a work-from-home environment - are now amenable to expanding remote working, and 73% of employees want to work remotely at least a couple of days every week. Simply put, other than the initial shock of everyone working from home, remote work has been an unqualified success.
In recent months, some companies in the USA are insisting that their employees come back to the office. These include influential banks like JP Morgan, Goldman Sachs, Bank of America, and Morgan Stanley. They may be the outliers.
Most companies are focusing on a new Hybrid Work model, where employees come in to work on some days and work remotely on others. Some work, like team brainstorming sessions, innovation workshops, or in-person briefings, may require employees to come to the office. But most knowledge workers may benefit from continued work-from-anywhere opportunities. Some industries – like the service sector– will continue to require that most employees come onsite.
Using a lowered productivity level as an excuse to insist that employees come into the office is no longer an acceptable argument. The empirical evidence does not support that position.
Insisting that employees come back to the office can also backfire on management, as was the case with Apple. A few weeks ago, Tim Cook and his team announced that employees would be required to come back to Apple offices at least three days a week.
The pushback from employees was immediate and became embarrassingly public. An internal employee email to management soon began circulating and gathered thousands of employee signatures: “Messages like, ‘we know many of you are eager to reconnect in person with your colleagues back in the office,’ with no messaging acknowledging that there are directly contradictory feelings amongst us feels dismissive and invalidating.” Google has had to deal with similar missteps.
Business executives and HR leaders may not adequately appreciate that the future of work has irreversibly changed.
2. The landscape for recruitment and retention is changing.
As the USA reopens with over 300 million jabs in arms and the pent-up demand for goods and services explodes, some 9.3 million jobs are currently unfilled. Businesses and HR departments are scrambling to find workers.
Economists speculate there may be many reasons for these worker shortages. Many baby boomers decided to retire rather than wait for the pandemic to subside. Women have continued challenges with childcare options as an impediment to return to work. Generous unemployment benefits may have also contributed. Companies like McDonald’s, Costco, and Amazon, increased wages to address these recruitment challenges, and many others offer significant signing bonuses.
Burnout is a real phenomenon in many parts of the world. SHRM surveys show that 50% of employees in North America are planning to quit and look for a new job in 2021. Better compensation and benefits and better work-life balance are two main reasons for this. Almost 4 million Americans quit their jobs in April 2021 alone! In a curious contradiction, employees who have worked from home indicate that their bosses have doubted their productivity, which has forced them to work longer hours.
The bottom line is that there is intense competition for workers. It is no surprise that leaders rank attracting and retaining talent as a top challenge for 2021.
In this environment, HR leaders must take an innovative and bold approach to talent acquisition and retention. Many are increasing their HR technology investments to address these challenges. Other ideas include: Increasing employee engagement and rewarding the work of good employees. Extensive exit interviews may provide vital clues for better retention. Potential candidates can have multiple options and may not respond well to cumbersome application processes, which may need streamlining. Leveraging the contacts of existing employees for new hires is increasingly a great option.
3. Employee benefits can be the differentiator.
The employee benefits of pre-pandemic times need to be reassessed and recalibrated for the post-pandemic era. For example, as the work-from-anywhere trend continues, providing support to maintain suitable work environments at home is a vital benefit.
With fewer employees in the office, the onsite gym and free office meals may have less appeal. Employers can also save money on smaller offices and lowered costs like transport subsidies etc. By one estimate, savings can amount to almost $ 11,000 per half-time remote employee per year. Utilizing some of those savings to improving employee benefits is recommended.
One of the less emphasized effects of the post-pandemic era is the impact of Covid-19 on the mental health of employees. According to the American Psychological Association, 78% of workers are under a significant amount of stress. There has been a higher number of suicides, alcohol and drug abuse, and domestic violence driven by the psychological impacts of the pandemic.
Increasingly, a new role of Director of Wellbeing is being created in many companies. Showing appreciation with well-thought-out employee benefits can help to enhance morale and provide relief from difficult times. Headspace, a meditation app, is one of the more popular add-ons to the employee benefits package.
Another way to expand the benefits and incentives for employees is to utilize platforms and catalogs from companies like Empuls to turbo-charge the benefit choices, thus making it easy for employees to consume the benefits.
4. The era of continuous learning is here.
More than ever, if employees and organizations are to stay ahead of their competitors, continuous learning has to become the new normal in the workplace.
Almost 80% of CEOs are very concerned about the ability of their workforce to have the necessary skills required for their companies to be successful. According to PwC, 133 million jobs will require reskilling and upskilling by 2022. Research and Markets is forecasting the e-learning market to triple by 2025 to reach $325 billion, up from $107 billion in 2015.
The era of ContinuousNext and the increasing velocity of change driven by digital transformation creates challenges for employees who need to stay relevant and create value for their organizations. HR leaders need to understand that you can’t “fire and hire” your way to organizational success. Upskilling and reskilling need to email@example.com. a core HR priority.
Another trend in e-learning is personalized learning. All of us do not learn at the same pace and can benefit from individualized content. Lee Rubenstein, VP of edX, says, “edX For Business saw massive growth in 2020 as companies increased investments in providing training for upskilling”. Companies like Coca-Cola and Home Depot invested in specialized apps for employee training and development with remarkable success.
5. The culture challenge in a hybrid work environment
In February 2021, Sunder Pichai, the CEO of tech giant Google, warned that the pandemic could hinder Google’s ability to maintain its culture in 2021. Google is synonymous with its unique culture, and this matters. In surveys, many other company executives are also struggling with a coherent plan for their organizational culture.
The challenge of maintaining a uniform company culture with a dispersed workforce is not trivial. To tackle this problem, start with a solid communication plan because employees feel more connected when they feel like they are in the loop. Remote work, even when it is part-time, can be isolating. Create opportunities for socialization. The virtual happy hour has been a trendy addition to the company milieu. Make sure that you are available to your employees, even if it is only virtually. Today, a dispersed workforce can straddle many countries and cultures. Sharing the heritage of different cultures can be rewarding and create bonds.
Recognition remains a preeminent employee engagement tool. Sending digital rewards and encouragement – using platforms like Empuls – create essential touchpoints.
Inevitably companies have shed millions of jobs during the pandemic. Some experts now estimate that 32-42% of job losses will be permanent. Layoffs are significant impairments to company culture because they substantially impact morale. As companies continue resizing staff levels, HR leaders should create a transparent and defensible criterion for layoffs.
Ramping up hiring also creates an opportunity to focus on the desirable company culture of the future. Performing a cultural assessment provides vital information on the current state. Co-creating culture markers with contemporary high performers can create necessary buy-in from a key constituency and allow a behavioral methodology to drive the cultural fit of new employees.
In the aftermath of global social justice protests, HR must also create a more inclusive and diverse workplace.
The report card on how HR is doing on various return-to-work categories is encouraging. A cohesive recruitment and onboarding experience needs to be moved higher up the HR priority list. Designating mentors for new employees is highly beneficial.
Sometimes, the most significant changes occur during an era of extreme distress. 2020 was one such era and presented some of the most challenging times for employees and HR leaders.
The pandemic forced companies to rapidly address technology challenges to enable remote work, create self-managed approaches to work and focus on productivity and output instead of time-based measures. The dispersed workforce now requires a different approach to company culture. Maintaining relevant skills is vital to keep organizations competitive and relevant. Recruitment and retention challenges necessitate a pivot to an agile approach to new and innovative ways to keep and find key personnel.
It is time for HR to move from a response mindset of 2020 to a new one grounded in resilience and consolidating the rapid changes due to the pandemic. Business success in 2021 and beyond depends on it.