In Retrospect: State of HR Mid Year Report 2021
Address Employee Experience, Burnout, and Wellness in Response to HR Challenges
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Introduction
2021 is the year companies must adapt to another “new normal.” Last year, organizations were forced to enable a 100% remote workforce where possible just to ensure business continuity. They also had to accelerate digital transformation to keep employees, partners and customers engaged. Along the way, many of them discovered that their employees could be as productive, or even more productive, when working from home.
Now, as society moves beyond the pandemic, some businesses are starting to reopen their offices in phases. Despite keeping in touch with employees, HR and organizational leaders may not know how many employees will want return to the office, full-time or even part-time. CHROs are realizing that they can’t return to pre-pandemic practices and policies because the world has changed too radically.
They are also aware that 2021 will be a considerably different year than 2020. If CHROs and other members of the C-suite learned anything in 2020, it’s that they must be prepared to adapt quickly to changing circumstances.
Our last survey, which we conducted in September and October 2020, asked what 2021 might look like. Those responses tend to be very consistent with the results of the 2021 mid-year survey, though the numbers have shifted somewhat. Where there is crossover (identical survey questions), the results of the 2020 and 2021 surveys are compared within this report. Further we added other questions that take a view toward that post-pandemic normal and how companies are preparing for the challenges ahead.
About the Survey
Who Responded?
The HR Exchange Network conducted a survey during the months of April and May 2021. More than 46% of respondents have director, SVP/VP or C-level titles. Over 37% work at companies with more than 1,000 employees.
What region are you in?
Remote Work Has Been Challenging, But Informative
The shift to remote work has been the biggest challenge for many organizations, followed by mental health/well-being and budget cuts.
What has been the biggest challenge in the wake of COVID-19 for your organization?
However, even those organizations found 2020 challenging because suddenly they had to support an entirely remote workforce. Some companies already had remote work policies in place, pre-COVID. However, even those organizations found 2020 challenging because suddenly they had to support a remote workforce. This year, offices are beginning to reopen, but not all employees who worked at the office want to return to it.
What is less clear is who should return to the office and why. Should employees who have always worked remotely continue to do so? Should employees who previously worked at an office be required to return to it? Should the employees be able to choose where they work, regardless of what their manager thinks? What impact will a hybrid work scenario have on office space utilization?
The uncertainty of the work situation and COVID have added to the stress levels of employees everywhere. CHROs and other leaders have been concerned about employees’ mental health throughout the pandemic, leading many of them to place greater emphasis on employee wellness by checking in with employees periodically and providing resources that help employees deal with stress and overcome challenges.
“For HR, it’s keeping in tune with what we’re hearing from employees because it’s much more than just what they need nine to five. It’s what they need support-wise in their life,” said Vaso Perimenis Ekstein, head of human resources strategy and solutions at Ekstein Consulting and former vice president of HR of the Winston-Salem market at Novant Health. “You didn’t have enough EAP counselors before, much less now, so it means we have to make sure that within the resources available, we’re putting the money to best use by creating those programs that help employees the most.”
Whether individual companies’ HR budgets are increasing or not tends to hinge on the overall health of the company and the industry in which they operate. In our previous survey, 42% of respondents said they anticipated budget cuts in 2021, but only 15% of 2021 survey participants voiced the same concern for the second half of the year. In fact, half of 2021’s respondents are not expecting their budget to change and about 35% expect budgets to increase.
Do you expect your budget to increase or decrease in the second half of 2021?
Employee Burnout is Real
The biggest consequence of the pandemic for HR has been burnout, followed by changing culture, and loss of engagement.
The biggest consequence of the pandemic for HR has been...
“We have a lot of people making decisions using dated norms. They’re using those norms to say, ‘How do we get back to January 2020?’ January 2020 doesn’t exist anymore, so you have to start fresh and define the new normal.”
Eric Torigian
Executive Managing Director and CHRO at SitusAMC
Juggling work, children and perhaps even aging parents all under the same roof is taxing. Even individuals who worked at home part time before the pandemic have had trouble adjusting to 100% remote work because the usual stress-relieving outlets, such as vacations and other types of leisure activities have been unavailable or considered too risky to enjoy in the last year. The fear now is that the burnout may lead to employee departures or that the combination of burnout and other stresses could potentially result in increased absenteeism, higher rates of disengagement, workplace incivility and even violence.
In addition to balancing work and personal responsibilities, employees have also had to adapt to a more fluid corporate culture given the rapidly changing circumstances caused by COVID. In 2021, company culture will evolve again as remote work and office work merge into a hybrid work environment. Perhaps the hardest hit group will be those who expect life at the office to return to what it once was.
Despite the high level of remote work productivity, loss of engagement is a constant concern. In our 2021 survey, roughly a third each said employees were more engaged, less engaged or demonstrating the same level of engagement. However, the loss of engagement ranked slightly higher.
Comparing to 2020, do you think your employees are:
Reduced employee engagement is being driven by several factors including burnout, feelings of isolation and uncertainty about where one fits in the new world.
In 2020 and 2021, the two biggest challenges in keeping employees engaged was the blurring of work and personal life, followed by burnout.
What is your biggest challenge in keeping employees engaged?
Better Employee Experiences Require an Updated Approach
Prior to the pandemic, HR organizations were already focused on improving employee experiences and engagement. As the pandemic begins to subside, employee experience is the #1 priority. Not surprisingly, how HR departments are trying to improve employee experiences has changed somewhat to become more personalized and empathetic. In fact, roles are being created within HR that help ensure that individual employees have a positive work experience.
“Our theory is that everyone faced a common enemy in the COVID threat. All the actions that we took we believe were in the best interest of our people,” said Rich Deal, senior vice president and CHRO, FICO. “We spent a lot of time training managers how to manage remote teams and we did empathy training. How do you help your people through a pandemic? Help them understand what’s really important like if you’ve got 17 priorities and four of them are the ones that matter, let’s clarify what those are because people have a lot of other stresses right now.”
Better employee experiences also require a more flexible work culture because remote work has changed attitudes about where and when work should occur. Not everyone will want to work at the office and not everyone will want to work from 8 am to 5 pm. The solution to balancing the company’s interests with employees’ interests seems to be redefining “normal” business hours and providing hybrid and asynchronous work environments.
What is your biggest priority as the pandemic begins to subside?
CHROs and their companies have different ideas about what a hybrid work environment should look like. For example, a global digital transformation consultancy expects 60% of its employees to work at the office and 40% to work remotely. However, the company will monitor the mix constantly to see whether the 60/40 split meets the needs of the company and its employees. Some organizations are allowing managers or individual employees to make their own decisions.
At SitusAMC, employees who work an average of 3.5 days per week at the office will retain the right to a dedicated office or cubicle (whichever they had prior to the pandemic). Others will book shared workspaces.
Also read: Closing the gap preparing employees for the jobs of the future
Far more 2021 survey participants expect employees to work in a hybrid manner as opposed to at an office or at home 100% of the time. In fact, part-time office workers are expected to outnumber full-time office workers 3:2 and remote workers nearly 4:1.
“We have 350 job requisitions open at any given time and they’re all linked to a particular location that we hope will open after the pandemic restrictions lift. We have office locations all over the world, but we’re starting to realize that candidates don’t have to live in one of those places. What happens is the resume database and the quality of the talent pool explodes.”
Rich Deal
Senior Vice President and CHRO, FICO
Over the next few months, do you expect your employees to:
Tech Investments Will Prioritize Business Goals and Employees
Some of the technology adopted during the pandemic will endure in 2021, with team chats, video meetings and virtual collaboration tools topping the list.
Which of the technologies below did you implement to support employees during the pandemic, and you intend to keep post-pandemic?
FICO implemented Zoom in mid-2019. At the time, the technology was used by about 30% of employees, most of whom did not use video. Now, video use is commonplace, and the company is also utilizing the technology for training sessions and virtual whiteboarding.
Technology investments over the next six to 12 months are considerably clustered with about one-third of 2021 respondents saying they will invest in performance management, remote technology or analytics which were also 2020’s top choices. Fewer plan to invest in an HR management system, employee self-service, career pathing or a learning management system (LMS).
All of these technologies reflect important trends. For example, performance management, analytics and HR management systems help improve organizational effectiveness. Those tools are also essential for companies undergoing digital transformation because they provide a means of measuring progress against goals. As management guru Peter Drucker once said, “If you can’t measure it, you can’t manage it.”
Employee self-service helps reduce a company’s overhead costs by saving highly transactional departments such as HR, help desk, customer service and legal from rote and repetitive work. Meanwhile, employees enjoy a greater level of convenience and faster service.
Remote technology, career pathing and a LMS are about meeting employees where they are and providing options for where they work, the career paths they’d like to pursue and the educational resources necessary to meet their career goals, respectively.
What are you / your company investing in the next 6-12 months?
2020 Policies Will Persist in 2021
HR departments adopted some new policies or modified the ones they had during the pandemic. Many of those policies will survive for the foreseeable future. For example, three-fourths of 2020 respondents anticipated offering flexible work hours, but in 2021, that number fell to 61% because implementing the change can be more challenging than it seems. Specifically, some managers and executives are against flexible work hours because they believe it makes their job more difficult. However, flexible work hours are a perk that can impact a company’s ability to attract and retain employees.
Hybrid workplace policies will also endure for 60% of companies because, like flexible work hours, the issue will have workforce implications. Similarly, online learning policies will remain in about 45% of respondent companies (down from 2020’s 58%).
Which of the policies below did you implement to support employees during the pandemic, and you intend to keep post-pandemic?
The biggest challenge my organization faces to bring employees back to the office will be...
Cultural Improvements Are Ongoing
Cultural improvement and learning and development priorities remained consistent in 2020 and 2021 because they’re essential for a modern enterprise. Last year, increased transparency and facilitating collaboration, flexibility and autonomy were all at or above 60%.
The numbers fell in 2021, not because those things have become less important, but because some organizations have already woven them into their cultural fabric.
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“We were already a remote work organization, pre-COVID, but it’s one thing to put half your people through that kind of experience and [another thing] to put all your people through that experience,” said FICO’s Deal. “COVID forced us to really step back and say, ‘What if everybody had to be virtual here for another year and a half until the viral threat goes away?”
What are you doing to maintain or improve company culture?
Learning and Development is the Pathway to Company and Career Futures
Creating new learning pathways was the top priority in 2020 and 2021. In many cases, companies already possessed a lot of content, but it may not have been organized neatly into journeys that are specific to career paths.
What is your focus in L&D?
In 2020, converting in-person training to online content ranked second, but it slipped to third place behind motivating employee development in 2021 due to employee burnout and loss of engagement.
More than two-thirds of 2021 respondents strongly agree or agree that reskilling or upskilling is a significant part of their plans for the immediate future because it will enable the company to remain competitive and it will prepare employees for career growth.
Reskilling/upskilling is a significant part of our plans for the immediate future?
Employee Expectations Will Drive HR Changes in the Second Half of 2021
Employees’ expectations are changing across the board. In fact, they’ve changed so radically over the past couple of decades that those expectations, coupled with talent shortages, now means employees – not employers – are in the driver’s seat. In fact, employee expectations are the No.1 driver of changes in HR according to this year’s respondents.
Organizations hard hit by the pandemic expect the economic fallout to impact what HR does because HR may not have the funding it needs to meet its goals or employee expectations.
As companies become more digital and as offices reopen, HR will also be impacted by recalibrating business processes based on a number of factors including hybrid work environments, shifting employee expectations, competitive pressures and more.
What do you think will have the biggest impact on HR in the second half of 2021?
In the tech industry, competition is fierce for some types of talent such as data scientists and software developers. However, retaining top talent is the number one future of work-related HR challenge among 2021 survey respondents, irrespective of their industry.
When thinking about the future of the workplace, what is the single most concerning challenge for HR?
“I have always thought of HR as the conscience of the organization. You have to have a strong moral compass to support the organization and do right by employees. When you have an enlightened CEO and senior leadership team which understands what a really strong HR capability can do for the company, you’ll see the effects of that in your business outcomes.”
Vaso Perimenis Ekstein
Head of Human Resources Strategy and Solutions at Ekstein Consulting and Former Vice President of HR of the Winston-Salem Market at Novant Health
Q&A with Oracle HCM
Nancy Zoder
VP, HCM Product Strategy, Oracle
The biggest challenge for companies in the survey was shifting to working remotely, which is something everyone experienced. What would you say is the biggest lesson to come out of all that and given that largely, a lot of industries overcame that challenge, how does that change work going forward?
- Organizations that valued strategic workforce planning with scenario plans to accommodate disruptions to their business were best equipped to adjust to the new working environment.
- All organizations will have disruptions to their business, but proper preparation and understanding of the impact of the various scenario plans enabled organizations to quickly pivot to minimize disruption to their business and ensure continued productivity.
Employee experience and flexible work culture have emerged as top priorities as the pandemic subsides and it seems logical to connect that to the creation of hybrid work models. Do you think that’s the case and how do you see those things evolving in the next few years?
- As a result of this pandemic, we see organizations making key decisions on how to ensure support of their workforce and provide tools to enable productivity and cultivate creativity. We are finding that the hybrid work model is not for all organizations, but new work models are required for all organizations to ensure workers are enabled to be successful and satisfied. This new work model is necessary for all organizations to identify and support their unique workforce needs. Workers today are expecting service from their organization to help them optimize their work. This includes providing them with the information they need to easily connect them to co-workers – no matter where they work - but also efficient processes to optimize their team’s productivity. Employee expectations extend to the various relationships within the organization to ensure organizational and individual success.
- Technology enables managers, workers and HR to spend their time on their work in any environment. By providing easy to use solutions to access and process the information organizations can stay ahead of the competition to ensure they attract, retain and optimize their workforce in person, remote or hybrid.
The top three answers when we asked about investment in the next 6-12 months were remote work technology, analytics and performance management. How much do you think the pandemic influenced those decisions and what should HR teams be looking for in solutions to their challenges in those areas?
- Technology is needed to support workers in this new work environment which includes remote work, new work schedules as well as enablement activities with tools to optimize the different ways to work to support worker optimization. This means timely, personalized guidance is needed for all workers to ensure they have the direction they need when the work changes to support individual and organizational growth and success.
- HR must prioritize investment in modern employee experience and service going beyond the workflow to ensure the guidance is trusted, relevant, in context and personalized to optimize the worker’s time to support success in their role. This guidance should include direction for moments that matter to manage their career, skills and personal growth opportunities, but it must also include guidance to support success in their job and day-to-day activities. As organizations think about how they can enable their workforce and recognize the unique needs of your workforce, ensuring trust within the organization is critical to their enterprise employee experience.
- Organizations are unique and the individual experiences of each worker should be too. Recognizing then addressing the unique workforce needs requires understanding of the challenges the workers face in getting their job done in person, remotely, new work location or environment. In addition to understanding the challenges, HR has the opportunity to address those challenges and provide them with the trusted guidance they need to work in their current environment with tools to make them successful. This includes the ability to provide personalized guidance to their workforce and to support the changing needs of your business, industry, region and address and tackle any disruption to the worker.
In terms of the challenges remote work presents, people said their biggest issues were productivity monitoring and employee engagement. How much of that is a management issue? Were people really more engaged or productive in the office or was it simply that they could be seen and it’s human nature to be more accepting of what you can see in front of you?
- Technology is key to support employee engagement and productivity monitoring in this new work environment includes guidance and monitoring remotely. Organizations need to provide guidance to their workforce to ensure that personalized direction is given to workers to optimize their work time when working remotely. To support “remote productivity monitoring,” organizations need to provide continuous performance monitoring with real-time worker feedback. To support the different working models requires different guidance and monitoring.
- Organizations can leverage solutions like Location Based Access Controls available with Oracle Cloud HCM to support access to specific processes based on physical location (IP) and control work that can be done remotely vs at a specific work location.
More than a third of respondents indicated that their employees are less engaged in 2021 than in 2020 and they cited burnout and blurring of work and personal life as the reason. What advice do you have for HR teams looking to address that issue while still providing the flexibility people now expect?
- Employees feel less engaged because they do not have access to information to help them with the change to their work. Organizations need to provide more guidance and information to their workers and be the trusted source of information to support their day-to-day activities as well as their growth in the organization. It starts with transparency, clear communication and personalized guidance. Access to opportunities and worker connections are needed to ensure trust in an inclusive work environment. And communication should be directed and relevant to support the worker’s needs today and not six months ago. Organizations must enable their workforce, and this is done with clear guidance that adjusts based on disruptions to the business or to their work. And finally, organizations must understand the changing needs of their workforce to provide that personalized guidance.
- HR has the opportunity to build this trust across the organization by providing personalized guidance that ensures workers are productive and they are given the opportunity to grow professionally as well as personally.
Changing employee expectations was a big concern for respondents. That’s something to be expected following a period that upended a lot of assumptions about how we work. What advice do you have for HR professionals trying to remain adaptable in that environment?
- HR has a unique opportunity to be the center of innovation of an organization. HR now has the tools to support agility and flexibility to manage their changing market and legislative guidance to support the current, compliant needs of their workforce.
- As a trusted advisor, HR can provide the guidance their workers expect to adjust to the changing needs of the new work environment.
The vast majority of respondents agree that reskilling/ upskilling is part of their plans for the immediate future, and we also know from recent research that employees are hungry for learning opportunities that will help them develop skills for new roles that provide greater job security or opportunity. What advice do you have for HR teams as they look to start the reskilling/upskilling process in terms of skills identification and matching people with career paths that best suit their strengths?
- HR has the responsibility today to better understand the attributes of the worker that drive higher levels of productivity with higher satisfaction to ensure employee engagement and growth. This starts with understanding the business objectives and strategy and how to align the workforce in the short and long term. HR must understand the current skills of the workforce and what skills are required in the short and long term. Understanding of the organization’s needs, enables HR to align the workforce growth and success with the business. This requires analysis of the current skills pool, developing the workforce plan based on skills and resource availability and understand the gap closing strategy to ensure execution to close the gap.
- HR is the critical player in the organization’s strategic execution to ensure support of the business objective and with this, HR has the ability to ensure the right resources with the right skills are in the right position at the right time.
What memories do you have of this year in HR? Let us know in the comments.
