Our annual recap of hiring and HR trends that are making an impact and shaping the future of work.
By Larry Basinait
REPORT: TA Infrastructure Needs Improvement
If 2020 and 2021 revealed anything, it’s that organizations operate in a fast-paced global economy where technological innovation has hastened the pace of change. And companies have realized that their current talent acquisition technology will not be robust enough to meet long-term objectives.
New research from HRO Today revealed that in 2021, $19.8 billion was invested worldwide in HR technology, with much of that specifically geared to talent acquisition. The vernacular of talent acquisition today incorporates many terms that were not essential just a few years ago: mobile, search engine optimization (SEO), video interviewing, social media, and talent networks. To meet the evolving needs of talent acquisition, organizations need long-term planning while meeting short-term goals, and TA infrastructure is a key component of achieving those goals.
Nearly two-thirds of organizations do not have a long-term TA infrastructure currently in place. Despite the importance of a fully realized infrastructure that enables long-term strategic planning, many organizations remain in a reactionary mode, failing to commit the resources needed to adequately meet their future objectives.
Long-term infrastructure investment should include a robust, metrics-driven human resources information system (HRIS), which may or may not include a recruiting module, the knowledge to get the greatest benefit from the systems metrics, and the management of the company’s employer brand. All this needs to be done in a cost-effective and efficient manner if the infrastructure is to be sustainable.
Organizations do not rate any single element of their TA infrastructure particularly highly. Among all the areas considered, staff was rated highest, with 58% considering it to be good or excellent. The ability to react to changing market conditions was rated second highest, with 53% rating it positively. However, only 20% considered staff as excellent, suggesting a possible misalignment of skills with job requirements and an overall need for greater headcount.
Nearly two-thirds of organizations do not have a long-term TA infrastructure currently in place.
The ability to react to changing market conditions has certainly been a necessity since early 2020. In many organizations, mass layoffs were followed by a renewed impetus on DEI programs and later followed by worker shortages as the world tried to recover from the pandemic and supply line issues. However, only 7% of organizations considered their ability to be agile to be excellent, the fewest of any of the nine areas examined.
Current TA infrastructure is not equipped to meet future challenges. Respondents were also asked to self evaluate how well their TA infrastructure is currently equipped to meet future challenges. Only 25% felt their infrastructure is extremely well or very well equipped. More respondents considered their infrastructure to be only slightly well-equipped or not at all equipped (37%). Future challenges include the need to better optimize social media for recruitment, which will require advanced system capabilities and recruiter expertise. Those same systems will have to provide meaningful reporting and metrics, optimize career portals, and fully integrate video for screening and interviewing. Only by optimizing these areas can an organization compete in what is a dynamic, fast-paced, and uncontrollable external candidate landscape.
The focus of TA infrastructure is on short-term projects over long-term plans. Over two-thirds (69%) of HR leaders feel their current TA focus is on short-term projects versus long-term plans, and 58% feel the optimal mix should be more focused on short-term projects. It is an enormous challenge to meet current business needs while planning for long-term goals. Many business leaders are primarily focused on the short term, and often don’t know what the long-term strategy is or what kind of talent will be needed to meet the goals of the strategy. Organizations need to be agile enough to meet current talent demands while also looking to the future. Optimal TA infrastructure must be the result of robust workforce planning, but there is a lack of confidence in workforce planning.
Hiring volatility, retention, and employee experience are the biggest challenges in optimizing TA infrastructure today and tomorrow. Hiring volatility is the greatest TA challenge for today’s organizations, with 64% of respondents indicating it was a top challenge today and 57% anticipating it will still be top of mind tomorrow. Given current market conditions, it is no surprise that retention is also among the biggest challenges today for 60% of respondents, rising to 64% when thinking about the future. Employee experience is anticipated to grow the most as a challenge, rising from 30% today to 46% tomorrow.
REPORT: Tech Driving Strong Leadership Development Programs
Few organizations feel they have exceptional leadership development programs, as less than two-thirds (61%) rate their leadership development program as good or excellent, and only 10% rate them as excellent. But nearly all (95%) respondents who describe their programs as a technology-driven solution that enables, scales, and measures leadership program outcomes considered it excellent or good. That percentage declined to 64% of those with programs that are not technology-driven but still have formal parameters and measures of success. There is a clear positive relationship between the sophistication of the leadership development program and overall satisfaction.
Organizations with the best leadership development programs have a technology-driven solution. This solution is one that enables, scales, and measures leadership program outcomes. Nearly all (95%) organizations with tech-driven solutions consider their programs to be excellent or good compared to 64% of organizations that don’t integrate technology.
Despite the heavy investment in leadership development programs, the programs themselves vary greatly in structure and formality. Less than one-quarter (23%) of organizations have a technology-driven solution that measures program outcomes, while 28% have an informal program that only has loosely defined goals and metrics. However, there is a strong relationship between how tightly defined a program is and program satisfaction.
Competing business priorities are the most difficult area when managing leadership programs. Two-thirds (66%) of respondents rated it as extremely difficult or difficult. This is followed by 60% who indicated that reinforcing the lessons learned upon completion of the program was their greatest challenge.
87% of respondents expect increased employee retention as an outcome of leadership development programs.
Increased employee retention is the outcome most expected from leadership development programs, according to 87% of respondents. Given the current environment, companies are working harder than ever to retain employees. In 2021, more than 40 million people left their jobs. Workers realized that they could find better ways to earn a living with higher pay, stable hours, and flexibility.
Improved succession planning was the second most expected outcome from learning and development programs, as indicated by 83% of respondents. One of the primary motivations for a leadership development program is to prepare the next generation of company leaders. Given the high resignation rates experienced by many companies in 2022, this imperative is even higher than it has been historically. Although it may not necessarily be senior leaders leaving, companies need to maintain bench strength to fill those roles when they do arise.
The most frequently used metric to evaluate the success of leadership development programs is participant behavioral change, used by 83% of respondents. The objective of behavioral change measurement is to understand whether training was, in fact, transferred to on-the-job behaviors. It is designed to measure learner competency and the extent of improvement in behavior.
REPORT: Remote Workers and Screening Policies
In many industries, the hybrid workforce has become the new normal. Employees increasingly prefer having remote work options, and organizations now have the technology infrastructure to make it possible. Many employees are now required to spend fewer days in the office, and that trend might be here to stay.
Remote work options will remain a permanent part of the work landscape. On average, 40% of full-time employees are now working remotely at least some of the time. Looking forward, 53% estimate this will increase in the next 12 months, with 36% indicating no change. Employees will not return to the same workplaces they left behind during the pandemic. The most prevalent arrangement for employees who can work remotely is a hybrid schedule split between home and office, selected by 77% of respondents.
Most organizations have similar policies for all their employees, regardless of employee location. Over half (59%) of surveyed HR leaders said there is no appreciable difference between their remote and onsite policies. However, among those with a difference, just 27% indicated that their onsite polices are more comprehensive than their remote policies.
For 76% of respondents, background screening policies are essentially the same across geographies. However, there are substantial differences between federal and state background screening laws, as well as laws between states.
Companies do not understand that they must shift their policies and procedures to include the state the candidate lives in and organizations’ headquarters, and then abide by whatever the “unique” terms that each state has applied. It is a big sign that many companies are putting themselves unknowingly at risk. There is also the data access security risk that’s inherent with any outside workforce–remote or contract.
Employers do not vary background screening requirements by geography. For the majority (76%) of respondents, background screening policies are essentially the same across geographies. However, there are substantial differences between federal and state background screening laws, as well as laws between states. Not all criminal records are reportable on a background check and the dates of records provided may be limited. Further, not every state has the same laws, such as the rapidly changing laws around the use of marijuana.
REPORT: Healthcare Organizations Lack Tech to Manage Contingent Labor
Healthcare organizations rely on contingent labor as a planned solution to provide staffing to meet patient care needs in an environment where flexibility is crucial. But are those closely involved in scheduling and evaluating staffing needs applying the analytic discipline necessary to optimize this important source of human capital? Healthcare organizations are not taking advantage of contingent labor management capabilities currently available. Study participants were asked to select all the capabilities they currently use to manage their contingent labor program. None of the areas examined were used by more than one-half of respondents. The three capabilities that were most frequently used were vendor management to streamline acquisition of talent, dashboard to monitor metrics, and a telehealth platform for delivering care.
Vendor management to streamline acquisition of talent through staffing agencies was used by 46% of respondents. A comprehensive solution to manage contingent labor vendors to source qualified talent addresses the greatest priority of using contingent labor in the most systematic manner possible.
A dashboard to monitor important metrics was used second most often. Dashboards vary greatly in terms of formality and functionality, but ultimately are designed to convey meaningful information segmented into useful datasets to manage the workforce and make informed staffing decisions.
Finally, the importance of a telehealth platform for delivering care skyrocketed since the start of the COVID-19 pandemic and is also used by 44% of study respondents. Real-time communication with patients through video conferencing and email and remote monitoring of patients are some of the many ways healthcare providers are expanding breadth of coverage to their patients through these platforms.
73% of healthcare leaders feel analytics capabilities are critical to managing contingent labor.
Predictive analysis is the most frequently desired capability healthcare HR professionals would like to use to manage their contingent labor program. This allows healthcare HR professionals to forecast shifts in scheduling needs in advance, with 61% selecting it. Accurate forecasts of staffing needs can solve a wide range of problems that afflict most hospitals and other healthcare organizations.
Nearly three-quarters (73%) feel analytics capabilities when managing the contingent labor workforce is critical. Without relevant data to guide contingent labor management strategy, organizations can be caught short-handed, overspend, and create compliance issues. Uses for the data include compliance, compensation, and project planning.
But despite the acknowledged need for analytic discipline, healthcare organizations are far from optimizing analytics for their contingent labor management needs. The area most challenged is the ability to easily adjust to census-driven demand, with an average score of 3.28 out of 5.00. Healthcare staffers need to be able to see how planned shifts and patient demand align so that gaps in patient care won’t occur or to eliminate periods of overstaffing.
REPORT: The Latest Worker Confidence Index
Although 2022 was a tumultuous year for the U.S. economy and workforce, worker confidence rose steadily, reaching its highest point since 2019. Inflation continued at historic rates, although it decreased slightly throughout the fourth quarter. Additionally, the increasing threat of a recession brought mass layoffs to the technology industry, as large companies like Amazon, Salesforce, and Meta laid off up to 10% of their workforce, totaling over 150,000 employees. In the beginning of the fourth quarter of 2022, the U.S. unemployment rose to 3.7%, then fell to 3.5% in December. However, the labor market began cooling after a record-breaking year. The labor force participation rate decreased slightly, from 62.3% to 62.2%. Throughout the fourth quarter of 2022, 751,000 jobs were added, compared to over 1.1 million jobs in the third quarter.
The Worker Confidence Index (WCI) increased slightly, by 2 points, to 114.4, its highest level since the third quarter of 2019. Out of the WCI’s four indices, job security was the only to decrease, down for the second consecutive quarter, by 5.2 points to 88. Again, the likelihood of a raise increased the most, by 6 points to 128.3. This is now the highest level recorded by HRO Today, likely in response to inflation and an elevated consumer price index. Although the WCI is steadily rising, worker confidence may fluctuate due to economic concerns, especially considering the recent volatility of the job security index. Going forward, worker confidence is subject to rapid or unexpected shifts.
The Worker Confidence Index (WCI) increased by 2 points to 114.4, its highest level since the third quarter of 2019.
Job security again falls in the fourth quarter. The job security index was the only index to decrease, by 5.2 points to 88, the sharpest overall decrease since the onset of the COVID-19 pandemic in early 2020. Overall, 18.1% of workers believe it is likely they will lose their job in the next 12 months, up 3.3% from the previous quarter and 2.3% year-over-year. Following previous trends, respondents aged 65 and older are the least worried about job security as only 3.9% indicated concern, although this increased by 1% from the third quarter and by 2.2% year-over-year.
The likelihood of promotion index rises. The likelihood of a promotion index increased by 5.1 points to 135.5, the highest level recorded in this study, as it rose steadily throughout 2022. Confidence in a promotion increased in over two-thirds (68%) of segments surveyed in the fourth quarter. Respondents aged 25 to 34 were the most confident segment surveyed, as 50.4% anticipate a promotion, up 8.5% from last quarter. Overall, 26.2% of workers anticipate a promotion, up by 1% from last quarter and 2% year-over-year.
Confidence in a raise sees the sharpest increase. The likelihood of a raise index saw the largest increase of the indices measured as it rose by 6 points to 128.3. For the second consecutive quarter, the index reached its highest level recorded in the history of this study. Although more surveyed groups indicated a decrease in confidence compared to last quarter, 35.1% of workers anticipate a raise of 3% or more. Organizations are faced with offering raises against the reality of high inflation. The annual inflation rate for the United States in 2022 was 6.5% for the 12 months ending in December 2022 after rising 7.1% previously, according to U.S. Labor Department. Historically, a raise of 3% is good, but in the face of 7.1% inflation it becomes much less significant.
Employees’ trust in company leadership increases slightly. After a volatile start to 2022, the trust in company leadership index increased by 1.9 points to 105.8. In the most trusting group surveyed, those earning more than $100,000 annually, 62% trust in their company leadership to make sound decisions for their employees. Overall, 45.7% of respondents trust their company leadership. Year-over-year, trust grew by 2.4 percentage points. Trust was the least volatile index throughout the pandemic.