Five CHROs share strategies for overcoming the most pressing challenges from our annual Top Concerns of CHROs Report.
By Debbie Bolla and Larry Basinait
One of the few positives about 2021? Well, at least it wasn’t 2020. But still, many challenges arose for the HR suite. After layoffs, furloughs, and shutdowns in 2020, many organizations have not been able to find enough workers in 2021. CHROs in industries like healthcare and logistics are continuing to struggle to fill positions, feeling the pressure since early 2020, while others in hospitality began wrestling with the same reality during the first quarter of 2021. Worker retention has become a major obstacle with The Great Resignation in full swing. With pressures mounting, what are the top concerns of CHROs?
In its second year, HRO Today’s annual Top Concerns of CHROs Report points to specific areas that HR needs to keep its eye on.
2021 workforce planning was a mess. Most organizations anticipated a return toward “normal,” using the traditionally established level of resources to support the business. But most underestimated the workforce they needed. The majority (60%) of study participants indicated they expanded their workforce more than planned. Only 28% of respondents felt their estimates for a planned workforce size aligned with actual growth. Added to this, the job market is super-heated, with wages increasing and jobs going unfilled for extended periods of time.
“With unemployment at 4.6% in October and the labor participation rate at 61.6%, down from a pre-pandemic rate of 63.4%, there is a significant shortage of job applicants, and we are feeling this at Quest Diagnostics,” says Cecilia K. McKenney, SVP and CHRO for the organization. “We have seen a decrease in the number of applicants for our core frontline positions. The competition for applicants has never been more intense.”
The threat of inflation on worker turnover, which was not included in the 2020 report, ranked as the number five concern of CHROs, with 44% agreeing. Quest is keeping a close eye on data from Economic Modeling Specialists International (EMSI). McKenney says EMSI reported 10.4 million job openings in October compared to only 6.6 million one year ago. Employees are not returning to work for several reasons, including childcare shortages, schooling issues, and eldercare concerns.
“The workforce shortage and inflation have put pushed wages up particularly in certain metro city markets,” she says. “Quest has responded with wage adjustments for current employees and increases for starting wages.”
There is a greater need for workers in some industries, but luckily the reach has expanded as well. The new hybrid world of work allows organizations to approach recruiting differently and cast a wider net when looking for talent.
“A positive effect of the pandemic is that we have opened our aperture for recruiting in different geographic locations versus limiting ourselves to where we have our office real estate footprint,” explains Amy Cappellanti-Wolf, CHRO of Cohesity. “With the majority of our employees in San Jose, CA, Raleigh-Durham, NC, and India, we are recruiting for where the best talent resides, and hiring diverse talent in lower-cost locations without the competitive talent market constraints.”
Many companies are predicting growth in 2022 with 67% of survey respondents agreeing, noting an average increase of 6% in hiring next year.
With a lack of active candidates in the market, retention also becomes a pressing issue. In fact, retention was the area of greatest concern for this year’s study, expressed by 78% of respondents, up 44 percentage points from 2020.
“In this environment, all companies should be focused on retention because your people are critical to your business’ success,” says Kathleen Pai, chief people officer of N-able.
With this in mind, Pai and her team developed many programs to support and engage their employees to show them they have more than just a job at N-able, but rather a career. They started by launching their first engagement survey to get a deeper understanding of where they excel and areas of opportunity. Pai says they are currently analyzing the results in order to drive change. N-able also launched “Leadership Journeys” for managers to empower them to support their teams. The program features different tracks for different levels in order for everyone from managers to executives to continuously learn and build their leadership skills.
Managers are a key part of the retention equation for the City of Memphis. Its chief HR officer Alex Smith says in this current environment, they are experiencing increased resignation rates across the board. “We believe that employees do not leave organizations, they leave managers,” she explains. “We have revamped our manager education series, ‘Management 101,’ to help provide enhanced tools to assist managers during this challenging time.”
Smith says the ‘Management 101’ expands beyond traditional management curriculum and includes team building, emotional intelligence, empathy and compassion, customer service excellence, change management, and diversity and inclusion content.
As a company that is currently experiencing high growth, Cappellanti-Wolf says retention strategies have been at the forefront to help ensure Cohesity recruits and retains strong talent. The company has several approaches in its arsenal: stay conversations gauge employee sentiment; succession planning and internal mobility opportunities encourage professional growth; and total reward strategies recognize good work. Simple employee connection is also important.
“One particular top-of-mind focus is work-life integration and helping give our employees time back in their schedules to think,” she says. The company is also looking to simplify business processes, systems, and tools for better productivity and employee experience.
The impact of the pandemic and the conditions of the labor market have encouraged McKenney to revisit their engagement approaches and make a few improvements.
“We are reintroducing the stay interview process with some technology enhancements. The process is designed to bring the manager and the employee in a conversation to authentically talk about why stay at Quest versus opportunities outside of Quest. The early results are promising,” she says. “We are also making investments in frontline leader training. We reset our ‘Leading Quest Academy’ to be virtual in 2020 in a year-long program. I attended a graduation this month and was buoyed by the supervisor feedback that they feel more confident and equipped to be better, more caring leaders.”
Quest also understands the value of enabling leadership, especially since strategies and approaches continue to be shaped by the pandemic. “The people agenda is focused on inspiring leaders to be reflective of how they are approaching leading, setting priorities, and communications,” she says. “It also includes updates on key priorities like our commitments to inclusion and diversity, ESG, and financial health.”
CONCERN: Employee Mental Health
At Calendly, the pandemic paired with rapid growth has caused some concern around employee burnout. Chief People Officer Jeff Diana says the company is taking steps at both the strategic and tactical levels to help support their employees. “We’re serious about building a culture of feedback, where our people feel empowered to voice their feelings, concerns, and ideas,” he says. Employee sentiment will also be heard during the performance review process, which is being redesigned as a performance feedback process that will include bi-directional feedback and reflection by both the manager and the team member, ensuring equality.
Mental health support is also on Calendly’s agenda, with the addition of two company-wide days off for Mental Health Awareness Month in 2022. And this is a very good thing. According to this year’s survey, 71% of study participants are concerned about reducing employee stress levels and supporting employee mental health. The ongoing pandemic and resulting impact led to an unparalleled period of anxiety in recent history.
“In networking with my CHRO peers, a universal challenge we are all facing is how to address employee burnout and remaining connected in a hybrid work environment,” says Cappellanti-Wolf. “We have enhanced our benefits programs to provide more robust mental health support and are offering various programs such as meditation and mindfulness.”
Many organizations shifted their focus multiple times during the waves of COVID-19, sometimes going from survival mode to double-digit growth with a few months separating them. Ensuring worker safety led to remote work where possible, and then workers were called back into an office setting while the virus mutated and stubbornly refused to go away. Complicating the return to the office even more were childcare and eldercare issues. These uncertain situations resulted in great stress and distraction which comprimised the performance of employees.
“During the pandemic, people learned to adapt, but that doesn’t mean it’s easy or sustainable,” says Pai. One red flag for N-able was meeting fatigue. The pandemic shifted work practices to virtual video calls—and a ton of them. Pai says they wanted to break the cycle of back-to-back calls so they implemented a few initiatives.
“First, we changed everyone’s calendar default settings to begin meetings with a five-minute delay as a reminder to take some time for yourself between meetings,” she explains. “Second, we’ve started a once-a-month ‘No Meeting Day’ to give everyone a chance to have some headspace and time to de-stress and knock out their to-do list.”
McKenney says the sudden increase in employee stress led to the launch of the “Mental Well-being Steering Committee,” a group devised of employees across the company, overseen by Quest’s Chief Medical Officer Jay Wohlgemuth and McKenney herself. “We have many committees and networks to address a wide range of employee and company needs, but we realized that we did not have one focused on fostering mental well-being,” she explains. “We are also launching a ‘Healthy Minds’ campaign to foster a culture that takes the stigma out of seeking care for mental health needs. Early feedback from employees is encouraging and positive.”
The City of Memphis‘ Smith says that both their employee assistance program and constant communication have been key in their wellness strategy.
“Our wellness team keeps the site updated to include information about our ‘CONCERN Employee Assistance Program,’ which provides unlimited, free services to employees and their family members who might be experiencing personal problems, from grief to gambling, substance abuse to stress, family to financial issues and more,” she explains.
“We diligently remind employees of the resources available to them and encourage managers to perform quick mental health checks. We recently hosted a ‘Workplace Safety’ conference that not only focused on physical safety, but reminded managers that being mindful of mental health is also a form of safety.”
Smith says other efforts include an expansion of a police peer counseling program, compassion fatigue training, onsite and online grief support, and counseling.
CONCERN: Upskilling and Reskilling
There has been a lack of progress in upskilling despite the stated need to achieve it. One in five (20%) respondents reported they’ve made no progress, up from 12% in 2020. Likewise, the percentage of those making significant progress fell from 15% in 2020 to 3% in 2021. The availability of a skilled workforce and reskilling those already part of it are major concerns for CHROs. Analyst research shows the need is staggering, with as much as 40% of the workers requiring upskilling by 2025.
“Everyone in HR knows that finding and hiring great talent isn’t easy; the cost of losing them is even higher,” says Diana, so Calendly is personalizing its L&D programs. “We offer individual training stipends for people to work with their managers to decide how to utilize the funds for continuous learning.”
The company also sees value in succession planning and skills development. “In 2022, we’ll launch a twice a year initiative focused solely on career development so that our people can clearly express where they want to go, identify where they have strengths, and work with their manager to identify one or two concrete actions to take over the next six months to continue to add to their toolbox of skills.”
In the public sector, training and development is critical, but funding can be a concern. “One of our biggest issues is the ability to fund advanced training for our employees,” says Smith. “For example, we have a shortage of CDL [commerical driver’s license] drivers. Because of the regulations, we are not permitted to operate our own CDL program. It’s expensive for us to send employees to CDL school. One of our strategies to address this challenge is partnering with an organization that has its own CDL program.”
Smith says that although the program hasn’t been implemented yet, it’s been in the works for a year. Her team is trying to form a partnership with a local public sector agency that has its own CDL program. “We are trying to be really creative about how we address these types of issues,” Smith explains.
What else is ahead for 2022? The long-term impact of COVID-19 on company operations and business results continues to plague HR executives, with 41% of survey respondents feeling extremely or very concerned. A silver lining: This is a decrease from 52% recorded one year ago. More CHROs are seeing the worst of the pandemic behind them, and the agility of today’s workforce and HR practices will help them to continue to forge ahead.
To view the entire report, sponsored by Sevenstep, visit https://www.hrotoday.com/market-intelligence/research/2021-top-concerns-of-chros/