Five priorities for US HR in 2022

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October 25, 2021

Following two incredibly disruptive years, the workplace continues to demonstrate its resilience and forge ahead. Among other things, we continue to experience supply chain disruption, talent shortages, dramatic advances in technology, and other impacts on customer and employee experiences.

There are several priorities for HR to focus on in order to position an organization for success in 2022 and beyond.

1. Diversity, equity, and inclusion strategies that promote workplace justice

The pursuit of diversity, equity, and inclusion (DEI) will continue to be front and center for organizations worldwide, with an even greater focus on ensuring that systems and programs are created in a way that promotes justice for all.

In the October 2020 Mercer Global Survey, DEI was top-of-mind for organizations across the globe, with 74% of companies reporting an increased focus on DEI near the end of 2020. Of these companies, the majority (64%) were reviewing talent management processes, such as hiring, performance management, and succession planning, to identify and mitigate potential biases.

As many companies have taken to a remote work environment, the focus on inclusion has only increased, given the isolation and disconnection that many employees are experiencing, particularly those who work remotely full time. Here are five actions human resources professionals can take today to focus efforts on DEI and start advancing the DEI strategy at their company.

Do you want even more tailored advice? Take this brief survey, designed to assess your company's approach to DEI. Then, use your unique results to identify personalized opportunity areas and next steps.

2. The Great Reckoning

Mercer's 2021 Global Talent Trends Study reported that 41% of talent worldwide planned to leave in 2021. The forecasted event, often referred to as the "Great Resignation" or turnover tsunami, is indeed coming to fruition. According to the US Bureau of Labor Statistics, a record-breaking 10.4 million open jobs remain unfilled as 4 million Americans quit their jobs in July 2021. While the number of vacancies in Canada is lower, the situation is just as bleak.

However, we’ve come to understand that, in fact, there is a bit more to the story. In the preliminary results of the "Inside Employees’ Minds" research Mercer conducted in the summer of 2021, it is clear that the percentage of workers who were considering leaving their employer varied across different demographics. Industries on the front line, minority workers, and low-wage and lower level workers are much more likely to be considering leaving. White, knowledge workers, and higher income workers are much less likely to be considering leaving. In industries such as healthcare and retail, as well as for minority groups, the rates at which workers were considering leaving are much higher than historic norms.

Because of this divide, it’s not really a "great resignation," but more of a "great reckoning." Given the challenges that employees have faced on the front lines of this pandemic, the social unrest that we experienced in 2020, and the salaries paid in these low-wage jobs, this group of employees is saying, in many cases, it’s just not worth it.

Hourly employees are looking for more than just a pay increase. Following their experiences during the pandemic, many are reevaluating how they spend their time and what's important to them in a job. In many cases, going back to working in the same capacity is no longer desirable. They've come to appreciate flexibility and time with family in addition to seeking a supportive relationship from their employer.

Ensuring pay is competitive is the minimum action that employers must take in 2022. To successfully attract and retain an adequate workforce, an employer needs to provide to their entire workforce the benefits and perks previously reserved for the salaried employee.

Striving to become an employer of choice? Consider the following areas for the upcoming year:

  • Pay structures
  • Sign-on/retention cash incentives
  • Greater work flexibility
  • Additional paid leave
  • Increased health and wellness benefits
  • Career progression opportunities and other developmental programs
  • Re-design of the work itself

3. Strengthen your brand as an employer

Mercer leadership recently published, "Here's how to retain employees during the 'Great Resignation,'" where research has shown:

"One way companies can avoid today's so-called ' Great Resignation' is to invest in building brands that are as compelling internally as they are externally. When leaders partner with marketing and human resources to explicitly align individual roles with a company's inspiring brand purpose, we have seen companies transform an exodus of employees into an influx of talent."

Compensation and benefits are no longer enough to differentiate employees of choice. These contractual rewards remain essential and foundational, but are too easily replicated and expensive to change. Employees expect and need more.

Today's diverse workforce requires a compelling employee value proposition (EVP) that encompasses the total value an employee receives from the employer: compensation, benefits, career management, workplace/lifestyle, and employee pride.

To learn more, download "Strengthening Your Employee Value Proposition" whitepaper to learn what you can do in 2022 to enhance your company's EVP.

4. Consider the skills you need for agility

The past few years have brought a few lessons, but perhaps the most important is that we can’t accurately predict the future. Identifying and mitigating potential people-related risks can help improve a company’s ability to become more agile in responding to unanticipated disruption.

It became apparent during the pandemic that skills fuel business transformation and organizational resilience. Companies that took inventory of their workforce or talent ecosystem have been able to find talent quickly, move talent to where it's needed most, and make critical talent decisions to keep the business running during uncertain times.

As companies look to bounce forward and stave off future shocks, they build more flexibility into their business models. One in three global organizations is accelerating upskilling or reskilling programs in response to COVID-19. In doing so, they recognize the value of their people — the vast potential of each individual to leverage his or her existing skills to add value beyond their current role and learn new skills in response to changing needs.

5. Enhance benefits to meet employee needs

Making healthcare affordable for employees while also enriching offerings to include much needed access to mental health, assistance programs, and flexible care options is no small feat. As part of the acknowledgement that employers need to examine their employee offerings holistically, they’re seeing the importance of caring for the employee, not just paying them.

According to Mercer’s National Survey of Employer-Sponsored Health Plans 2021, fewer employers are shifting cost to employees than in the past, with only 38% making changes to shift cost in their medical plans in 2022, down from 47% in 2021.

With the shortage of hourly workers, improving affordability for lower wage workers is part of a longer term focus on addressing health inequities and the social determinants of health. Half of all respondents with 500 or more employees and 65% of those with 20,000 or more employees say this will be an important or very important priority over the next three to five years.

With the impact of the pandemic lingering in a number of areas, including remote working, employers are turning to a broader range of options to support workers who will no longer have access to worksite-based offerings, such as subsidized healthy food choices in cafeterias or onsite gyms. About a fifth of survey respondents (21%) say that in 2022 they will add or enhance well-being initiatives that are targeted specifically to remote workers; for example, home delivery of meals or snacks, subsidized ergonomic office furniture, or a stipend to help pay for well-being services or activities.

Mental health tops the list of areas in which virtual care will provide enhancements. Employees are reporting a high degree of stress, anxiety, burnout, and fear — and employers are listening. In 2021, 76% of survey respondents with 500 or more employees say that addressing employees’ mental and emotional health will be a top priority over the next 3-5 years, compared to Mercer’s 2019 survey in which just 44% considered it a priority.

One thing is for sure — employee engagement is closely tied to each of these topics. By implementing cost-effective, efficient employee pulsing tools, employers can better understand what really matters. Staying engaged with your employees and understanding what they value most is crucial to any talent strategy in 2022 and beyond.

Would you like help determining how these challenges relate to your organization? Reach out to us a 1-866-605-1031 or via email at surveys@mercer.com.