Written by HRCap, Inc.
Tuesday, May 10, 2022
As we near the end of the first half of 2022, HRCap conducted market intelligence, compiled data-driven industry research, and organized best practices to prepare our very own comprehensive list of Top 10 HR Trends for 2022. We invite readers to carefully review each trend with recommended actions to effectively tackle HR & Talent challenges, navigate change, and proactively lead the market!
1. Booming Industries & In-Demand Skills
Many industries were able to grow and prosper due to the pandemic.
Just to name a few, e-Commerce, Gaming, and Telehealth have seen the highest increase. E-commerce sales increased 43% from $571.2 B in 2019 to $815.4 B in 2020, according to Annual Retail Trade Survey. U.S. Gaming sales to a record $56.9 billion in 2020, a 27% increase over the previous year (NPD Group report). According to a 2020 Statista report, global spending on gaming has grown over 12 percent year-over-year. The global esports market size was valued at $1.41 billion in 2020. The key market players are Amazon, Microsoft, Alphabet, Apple, Sony, Nvidia, and Facebook.
With the increasing mental health issues onset by the pandemic, Telehealth and Behavioral Health services have grown exponentially. According to research by Frost and Sullivan consultants, telehealth services have increased by 50% since the beginning of the pandemic. Rock Health also indicated 2021’s total funding among US-based digital health startups amounted to $29.1 B across 729 deals.
Most importantly, the pandemic accelerated many companies’ Digital Transformation (DX). A survey from Deloitte found that 69% of surveyed DX leaders planned to invest more into their DX in response to the pandemic. Statista also shows 97% of respondents stating that the outbreak of the COVID-19 pandemic sped up DX processes in their organizations.
With the increased effort and investment in DX, many technological skills will be in increasing demand, such as Digital Marketing and Computer & Information Technology. As more social media users spend more time online, Digital Marketers will continue to be in highest demand. According to the Bureau of Labor Statistics, Digital Marketing will have predicted job growth of 10% by 2030. Companies will need to keep up with technological improvements when undergoing many digital processes, and the most notable In-Demand Skills are in Cloud Computing, Software & Web Development, and AI/Machine Learning. This industry is projected to grow 13% from 2020 to 2030.
Another survey done by Statista asked recruiters and developers what skills they were actively looking for to hire for in 2022:
58% - for web development skills
30% - for AI/Machine Learning
23% - for UI/UX
Nickle LaMoreaux, CHRO at IBM, reinforces that right skills and learning agility have become increasingly more important than direct experiences in today's hiring market, sharing that IBM prioritizes relevant skills; "50% of U.S. jobs are open to anyone with the right skills or a willingness to learn them."
>> Recommendation: Companies must identify skills gaps and then invest in filling the need through recruitment marketing, organizational restructuring, or expansion of the digital transformation team.
2. Shift to Data Literacy
According to the Academy To Innovate HR (AIHR) research, only 41% of 5,648 HR practitioners can leverage technology and read and apply data to improve efficiency and business value.
Two of the data science job trends in 2022 to look out for are database administrators and data architects. The U.S. Bureau of Labor Statistics projects up to 180,000 jobs by 2030.
>> Recommendation: Following the advancement of DX, leaders will need to deepen their understanding and enhance their application of data analytics to thrive.
3. Investment in Cybersecurity
With the increase of remote work and employees working on different networks, there is an increasing need to invest in cybersecurity software to prevent cyber attacks. The European Union Agency for Cybersecurity noted a 150% rise in ransomware in 2021. This will only increase as remote work leaves many opportunities for hackers to exploit weak network security. Although small and medium-sized businesses may think they may be safe due to their size, about 43% of all data breaches involve small and medium-sized enterprises. When hackers have access to a company’s network, it can be difficult for companies to recover financially. In fact, “60% of small companies go out of business within six months of falling victim to a data breach or cyber attack.” Therefore, organizations need to increase security measures to prevent such attacks.
>> Recommendation: Companies should assess their current level of security in place, then consider having malware protection, strong password policies, installing firewalls, file integrity monitoring, regular risk assessments, and incident and failure response strategies. Even having a workshop to train employees to identify untrustworthy emails and websites can reduce network vulnerabilities.
4. Emphasis on Emotional Intelligence & Soft Skills
Emotional Intelligence (EI) is “the ability to understand and manage your own emotions, as well as recognize and influence the emotions of those around you” (HBS). EI is becoming an important quality that companies look for in their leaders. As many managers and employees face burnout and consider quitting, leaders need to have the ability to empathize and properly motivate and lead.
Research done by TalentSmart provides that EI is the strongest determinant of performance. This is evident in a CareerBuilder survey in which 71% of employers said they value EQ over IQ, reporting that employees with high emotional intelligence are more likely to handle stressful situations and conflict resolution and have an empathetic response to employees. This is further supported by Daniel Goleman’s research which shows that 80-90% of high performers in the C-Suite are differentiated by high emotional intelligence.
Another survey by Catalyst indicates that when people reported their leaders were empathetic, there were increases in innovation, engagement, retention, inclusivity, and work-life balance. It is clear that leaders with high emotional intelligence will not only perform well but can empower employees by increasing overall engagement and productivity.
>> Recommendation: Companies must hire and develop emotionally intelligent leaders by providing more leadership development workshops to enhance emotional awareness and intelligence. Organizations should incorporate an EQ assessment for potential leaders to assess their EI and identify which areas the leadership may be lacking. Additionally, they can consider screening potential C-level candidates by including EI in the job description, using leader assessment tools, and asking interview questions that probe for EI. According to Talent Board’s 2016 North American Candidate Experience research, around 80% of companies use some form of pre-employment assessment tool. HRCap is also building our own proprietary HRCap Leadership Assessment Tool (2023 Launch) for selection and development. Our tool will determine the executive’s level of self awareness, learning agility and passion, which we believe are the most important factors for navigating change leadership.
5. Normalizing Hybrid Organizational Work Space
The workplace setting has shifted to remote and hybrid work. Although many believe this would have diminished productivity, Mercer showed that 94% of 800 employers said that productivity was the same as or higher than it was before, even with their employees working remotely. Another Stanford study of 16,000 workers over 9 months found that remote work increased productivity by 13%, given the reduced work commute times and more convenient work environment.
Having enjoyed this flexibility and delivered on productive results, many employees prefer working from home or a hybrid schedule even though the number of COVID cases has decreased. A 2021 Microsoft survey of 31,092 full-time employed workers across 31 markets shows that over 70% of employees want flexible remote work options to continue. In the same study, 66% of industry leaders are considering redesigning their workplace for hybrid work. Having a flexible work environment can be beneficial for leaders to consider due to increased productivity and overall employee satisfaction, which can also help retain and attract employees looking for that flexibility.
However, there is still a challenge to consider with hybrid work. Leaders must be even more mindful of employee burnout. In a Monster survey of 1,251 respondents, 69% of workers were experiencing burnout. An Eagle Hill survey of 1,000 workers shows that 50% of employees feel less connected to colleagues, 45% feel less productive, and 36% feel less optimistic about their careers.
>> Recommendation: Companies should determine a sustainable work environment that allows for both productivity and flexibility. By not having an option to be hybrid, they may lose great potential candidates that need that accommodation, who may have otherwise been highly effective otherwise.
6. Rise in Freelance Economy
A study of US professionals by Upwork found that 20 percent (10 million people) are considering leaving full-time to freelance. A 2020 study by Upwork revealed that 59 million Americans performed freelance work, an increase of 2 million freelancers since 2019, during the pandemic and contributed $1.2 trillion to the economy. With work flexibility and autonomy, 58% of non-freelancers are considering freelancing in the future. By 2027, Statista estimates that 86.5 million people, about 50% of the total U.S. workforce, will be freelancing in the United States.
In fact, according to Upwork’s survey of 1,000 U.S. hiring managers, 71% of hiring managers plan to sustain or increase their use of freelancers in the future.
>> Recommendation: Companies should determine specific roles and responsibilities that may be better fitted for contract and freelance roles, given the ability to tap into specialized subject expertise and to ensure rapid turnaround time for critical projects underway.
7. Higher Total Compensation & Fulfilling Career Opportunity
The past two years have shown us that the modern workforce seeks more than just competitive salaries. Many left looking for a better value fit, better lifestyle fit, and better total compensation. Many sought more fulfilling work with growth opportunities and wanted organizational alignment with their values. They also had demands for higher pay with better all-encompassing benefits, including non-traditional benefits like mental health benefits (Edelman).
Many companies are now creating wellness programs that will support employees in various ways and to a greater extent. In a Gartner 2020 survey of 52 HR executives, they shared that 94% of companies made significant investments in their well-being programs, 85% increased support for mental health benefits, 50% increased support for physical well-being, and 38% increased support for financial well-being.
It does not necessarily have to be just higher pay. Employers can attract employees by providing additional non-traditional benefits, such as flexible work settings and the following perks:
Netflix, Oracle, LinkedIn, Evernote, Roku, Hubspot, Chegg, Twitter - unlimited vacation days
Twitter - 20 weeks of maternity and paternity leave, free daily snacks/breakfast/lunch/dinner
LinkedIn - Inday (Investment Day), during which employees can focus on projects they personally want to pursue that have nothing to do with their daily work routines
Baptist Health and Cisco - offer compensated massages as part of their benefits packages
Ally Financial, Estee Lauder, Google, Hulu, and Peloton - Student Loan Repayment Assistance
>> Recommendation: Companies must believe that people are their greatest assets and truly invest in them. We hope to see more companies aligning their total compensation packages as well as their mission and workplace environments with the needs of their employees.
8. Importance of Learning and Development (L&D)
There is an increasing need to upskill and reskill current employees. Almost 60% of 1,260 learning and development professionals globally identified upskilling and reskilling as their top priority this year, according to the 2021 Workplace Learning Report from LinkedIn Learning.
“66% of workers believe they need to gain new skills to stay employable in the years ahead, and only 37% of non-managers feel their company is investing in their skills and career development.” (WeForum)
L&D programs help employees be more proficient at their work and increase job mobility within the company. This can improve employee retention and job satisfaction. In a 2021 Gallup survey, 71% of workers said that job training and development increased their job satisfaction, and 61% say upskilling opportunities are an important reason to stay at their job. In the same survey, 66% of workers ranked learning new skills as the third-most important perk when evaluating new job opportunities (SHRM).
Below are examples of organizations that have prioritized learning, upskilling, development, and mentorship opportunities to strengthen their workforce:
McKinsey - 70:20:10 Learning Framework is where 70% of learning takes place on the job, 20% through interaction and collaboration, and 10 % through formal-learning interventions, such as classroom training and digital curricula
Heineken - running a reverse mentoring program where junior employees act as mentors
City National Bank - Ex-Change program for mentorship
Cooley - Virtual mentoring program, Cooley Academy Mentoring Program
Global Voyage Leadership Development program helps recent university graduates
Marriott Development Academy helps aspiring managers acquire essential leadership skills, successfully filling more than 55% of leadership vacancies with internal candidates within the Australian market
>> Recommendation: Companies must invest in creating or improving L&D programs that will enhance employee skills, satisfaction, job mobility, and retention. They should create and promote opportunities for employees and managers to upskill which will increase internal job mobility and satisfaction. Incorporate mentorship programs so that employees can also learn on the job.
9. Attracting Top Talent and Hiring Right
According to Aptitude Research Partners, recruitment marketing technology is one of the fastest-growing sectors of HR tech, with approximately 66% of enterprise companies investing in these capabilities.
Recruiting teams use recruiting marketing technology to promote their employer’s brand message to produce leads to engage, nurture, and eventually convert into applications. Examples include content marketing, email subscriptions, social recruiting, SEO, employee referrals, talent networks, employer branding, recruiting events, and CRM.
These marketing methods help businesses produce 3x more leads and 10% more revenue (SHRM).
SmartRecruiters - Linkedin, Skechers, Equinox, Etsy, Ubisoft, McDonalds, Visa, Colliers
Zoho Recruit - Deloitte, Bosch, The Times Group, Saint-Gobain, Allianz
LinkedIn Recruiter - Nestle, Amazon, Dropbox, Siemens, Intel, Shangri-La, Unilever, Procore
HubSpot - Frontify, VMware, Loom, monday.com, Trello, Momentive, Reddit, Soundcloud
Adobe Marketing Cloud - IBM, Walgreens, Coca-Cola, Marriott, Ben & Jerry, U.S. Census Bureau
Moosend - Sephora, WIND, Gucci, Dixons, Dominos
Benchmark - Remax, Audi, Century 21, Toyota, Courtyard Marriott, BBVA, PBS, Curves
Mailchimp - Vimeo, TED, New Belgium Brewing
Semrush - Tesla, Apple, Decathlon, P&G, Samsung, IBM, Walmart, Amazon, Quora, J&J, Forbes
Moz Pro - Zillow, Trivago, Razorfish, Alaska, 99designs
SpyFu - Adobe, Amazon, Microsoft, Salesforce, Twilio
Pipedrive - Capterra, Gartner, Trustpilot, GetApp
ClickUp - Samsung, Webflow, booking.com, IBM, Padres
>> Recommendation: Companies must recognize the current digital recruiting landscape, and strategically invest in recruitment marketing tools and digital processes that will allow them to remain current, save time, enhance performance, and reach greater pool of top talents.
10. Retaining Top Talent through Stronger Employee Experience Programs
Nothing is more important than retaining the top talent and engaging the current employees.
Despite the investment of technologies and new talent, the organization will not be sustainable if it cannot identify and truly develop and retain its top talent.
In 2021, companies faced significant labor shortages when employees began resigning all at once, and this trend has continued in 2022. According to Joblist’s U.S. Job Market Report: 2022 Trends, of 20,000 job seekers from across the country, 3 out of 4 full-time employees plan to quit their job this year.
In a McKinsey & Co. survey of people who recently quit their jobs, 51% said they left because they did not feel a sense of belonging at work. So employers need to consider what employees value and help them feel that they belong at the company. In fact, 92% of Employers (1,550 employers) worldwide said they will prioritize the employee experience over the next 3 years to improve retention.
>> Recommendation: Companies must prioritize employee experience. Employers must consider implementing an engaging onboarding experience, a collaborative and flexible work environment, an employee recognition program, and a comprehensive benefits program. From recruiting to onboarding and training, employers should introduce the work culture throughout the entire process and provide opportunities for engagement and collaborative learning to create a sense of belonging. These are key factors that will improve employee retention and, ultimately, the workplace culture.
Sources: HRCap, Apollo Technical, Mercer, Microsoft, Monster, Eagle Hill, Forbes, SHRM, Edelman, Gartner, Joblist, McKinsey & Co., AIHR, U.S. Bureau of Labor Statistics, Catalyst, LinkedIn, Upworks
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