In 2021, we learned to be more flexible and enable workers to do their jobs with more autonomy and in new ways. We learned to be more human-centric, bringing a stronger focus on empathy, care, and wellbeing at work. We also learned about digital transformation, HR leader Josh Bersin writes in his HR Predictions for 2022 report.
In the report, he highlights that leaders now know we can do things faster than we previously thought and build solutions that get better over time. The HR profession has also transformed, and we are no longer talking about HR “getting a seat at the table”; HR is now sitting there.
With 2022 here, the report delves into 15 key predictions HR leaders should look out for in the year, with a greater focus on how hiring would change, new ways of exploring L&D, and more — with HR as central to driving many of these trends.
#1 The economy will grow—with a constrained labor force
As Bersin notes, the world is entering a fast-growing economy and facing the biggest labor (and skills) shortage seen in decades. And despite the increase in inflation in 2021, wages are increasing. Companies are relaxing their criteria for hiring and ignoring requirements for college degrees or certain types of experience.
For example, some companies have now completely removed the need to submit resumes for their digital product development team; instead, they are using behavioral assessments to identify the “PowerSkills fit” of new hires and plans to train for technical or functional skills.
On top of that, many companies are adding bonuses, flexible benefits, and ever-more attractive perks to attract prospective employees.
In 2022, there will also be a growth in jobs and the demand for workers, skills, and expertise. These new jobs will do two things. First, they will draw more people into the labor force, effectively increasing the number of people working. Second, they’ll shift and change talent practices.
#2 Hybrid work will evolve: enter the metaverse
Hybrid work is now a "well-accepted business practice", with almost every company is reinventing 'where to work' and 'how.' Employees are expressing their interest in such arrangements. However, there are still many leaders who prefer their teams back in the office, Bersin points out.
"While the jury is still out on fully returning to the office (many tech companies have explicitly told people they can work remotely forever), it’s clear this is an issue that will be with us for some time. While nobody likes a long commute, as more and more people show up, others will also want to be there.
"The old idea that working at home was synonymous with goofing off is gone. We can now accept that hybrid work is normal. And deskless workers, who make up almost 70% of the global workforce, are getting new tools and more flexibility.
Thus, the big trend in 2022 will be better, virtual tools and the emergence of the metaverse — which Bersin noted will "further transform the definition of hybrid work, as well as onboarding, training, collaboration, meetings, and, of course, entertainment and commerce.
"Imagine, for example, a staff meeting where everyone can interact and move around (as if they were really there), but without spending five hours flying across the country. There’s a big future here."
#3 Learning, skills, and career pathways will become business-critical
Companies today desperately need to reskill and redeploy workers, and the L&D market is responding faster than ever.
While companies (and investors) have typically viewed corporate training as an important must-have but certainly not as a competitive advantage, this has "completely changed" today, Bersin points out. "Today every single company executive is worried about skills. Not only have companies been redeploying, moving, and rethinking jobs and roles all over the world, we now have a skills-centric mentality that leads CEOs and CFOs to start thinking about what skills are missing among their workforces."
As a result, L&D organizations must upskill their own teams. Further, chief learning officers are now responsible for capability academies, for supporting corporate skills taxonomy projects, and for determining what technologies and content to buy.
Bersin highlights three key issues facing L&D leaders this year:
- Building capability academies (end-to-end learning strategies led by the business).
- Cleaning up and integrating all L&D technologies and tools.
- Working with the rest of HR to implement a skills taxonomy for the future. And this imperative is starting to pick up speed.
Companies are also integrating their L&D investments with their urgent workforce needs.
Other highlights of this trend include:
- L&D and HR leaders don’t want ten different learning platforms, and vendors are feeling the heat, with many of the smaller standalone players starting to merge.
- Leaders in corporate L&D will want to create a learning infrastructure that pulls the different pieces of the tech ecosystem together to help learners build needed skills and capabilities for the future. To adapt, Bersin recommends two aspects:
- First, leaders should form a team that focuses on the company's skills tech architecture and the relationship between the skills strategy and career, recruiting, mobility, and pay. This team should start to understand the technology and consider issues such as:
- How will we curate and manage the taxonomy?
- How can we redesign our job architecture to consolidate skills across roles?
- How will we assess skills in various roles?
- How will employees see and interact with the platform in their profiles?
- What third-party external skills data do we need?
- Second, it is important to focus efforts on critical job roles or capability areas that matter. "When it comes to skills, no company can possibly 'boil the ocean' across the entire enterprise, yet HR technology may infer skills everywhere. So the best approach is to start with critical capability groups and then work with capability champions (business or functional) who can help drive the agenda forward."
- First, leaders should form a team that focuses on the company's skills tech architecture and the relationship between the skills strategy and career, recruiting, mobility, and pay. This team should start to understand the technology and consider issues such as:
#4 Coaching will develop PowerSkills in everyone
Of all the L&D issues companies face, one of the hottest of all is PowerSkills—teaching people how to lead, work in teams, collaborate, communicate, tell stories, and think strategically. PowerSkills are, essentially, skills such as empathy, forgiveness, humility, and awe, which Bersin highlights as the most powerful and sustainable skills in business. "While these kinds of 'softer skills' were not widely discussed prior to the pandemic, we now know they are essential to success.
"Learning and developing these soft skills is difficult. Important skills like time management and strategic thinking do not come easy. Every company has its own context for these capabilities and we need to learn them together, in teams, and with leaders."
All in all, he shares, in 2022, the focus on coaching and PowerSkills will continue to grow, and every company will revisit its leadership model to identify which PowerSkills is right for the business.
#5 Talent acquisition and internal mobility will converge
Rather than just looking into the external candidate pool when trying to find talent, many companies are now identifying skills, experiences, and qualifications from internal and external sources to find the right fit for open positions.
Recruiting itself is being automated and improved, with some companies recruiting candidates entirely through mobile devices, and others relying on AI to source candidates based on their scientific expertise, reputation, and experience. These companies are "completely" ignoring job titles.
At the same time, the opportunity of internal mobility has become "massive", with recruiters searching internally to assess and find the right-fit employee for an open job. "Coupled with the growth of a talent marketplace, this is a whole new way to recruit," Bersin points out.
#6 Every company will need a talent marketplace platform
Bersin writes: "When you open up internal opportunities to people inside the company (jobs, projects, mentors, assignments), you get the power of marketplace dynamics. Highly expert and ambitious people rise to the top; projects get staffed with the best people (not just the leader’s favorites), and everyone feels more empowered.
"And in a world where it’s harder than ever to find external candidates, the marketplace becomes essential. I firmly believe that an internal talent marketplace is becoming one of the most important systems that should exist in a business."
Historically this area was called “career development.” Most organizations had career models, nine-box grids, and all sorts of "old-fashioned ways" to help employees figure out where to go next in their careers.
"The problem with this approach is that it simply does not move fast enough. So now companies are embracing internal platforms that help managers find staff to help with projects and help employees find mentors or new jobs.
"The most successful companies put career mobility into the hands of the employees and help them move into the direction of which they are most passionate with an agile model."
On that note, while a talent marketplace is seen as a "highly-successful solution and one that most companies will pilot in the year ahead", it is notably a bit more complicated than it looks. As Bersin notes, leaders will have to simplify job architectures, decide what technology to use for skills and development, and then think about how to manage performance, pay, and promotion as people start moving around.
#7 Talent intelligence and skills taxonomy will become the cornerstone of your people strategy
As the economy grows and companies transform, every organization is trying to figure out the skills its employees possess, the skills that are needed, and where the gaps are. These are not just L&D issues, but rather, are talent intelligence issues.
For instance, automakers are becoming electric vehicle and AI companies; healthcare companies are becoming IT and digital health companies; pharma companies are diving into genetic engineering; oil companies are moving into renewable energy and services, and telcos are reinventing their businesses with 5G and content. In every single case, senior leaders are trying to determine what skills they need next.
While these approaches While hiring experts or hiring new employees with the needed skills do work, they are not sustainable, nor do they solve challenges quickly. Solving the skills challenge requires building a skills taxonomy—one of the biggest trends in HR, Bersin points out.
Therefore, he shares, in 2022, leaders will need to create a skills architecture team, bringing together the CEOs that need to be involved. Leaders will need to assign "capability leaders" to each strategic area of the company, but not HR people; instead, they should be business or functional leaders.
"This will then enable you to build a multiyear roadmap for identifying critical capabilities, assessing and selecting SkillsTech, looking for external data, and then applying this information to the problems of recruitment, mobility, training, and rewards.
"For HR this means building a new center of excellence (COE), the COE of skills architecture. This new team will own job architectures, skills technologies, skills taxonomies, and the coordination of the capability academies. It’s one of the biggest changes hitting HR in years (probably as big as the emergence of employee engagement and employee listening)."
#8 The intense focus on employee experience will become mainstream
No one is a stranger to the term "employee experience (EX)" today — after all, every company has placed this as central to keeping their employees engaged and motivated, particularly in challenging times.
With leaders possibly gaining more clarity on EX in 2022, Bersin highlights the "real problem" of it in four stages:
- First, you have to listen to people, analyze, and identify your problems. This may mean creating employee personas and then creating “design centers” around each major employee group.
- Second, you need to build a multifunctional team. Once you understand the design issues of your various workforce groups, you need to respond with a holistic strategy. This means bringing together IT, HR, facilities, safety, legal, and even operations to help. This EX team can then look at the top priority issues and decide what interventions, tools, or long-term investments are needed.
- Third, you need to look at service delivery. All employees want self-service, but they also need to talk with the local HR business partner, IT service center, or HR service center for different issues. EX at its core is a service-delivery strategy, so we have to rethink how delivery is set up.
- Fourth, you need a long-term roadmap. EX is not something you solve in a single year. It’s a new lens for long-term investments. For instance, ask: Is there new case management or knowledge management system needed? And how will AI make all these EX solutions better?
#9 Diversity will be reframed as "belonging, equity, and inclusion"
In 2022, companies could be building on the sense of belonging they created during the pandemic to further refine their DEI programs. And given the highly competitive labor market, companies will relax many of their assessment criteria and be ever-more inclusive for hiring.
Per research cited, creating equity and inclusion is "not solved by hiring more people of color or promoting more women into management roles". While such actions are definitely important parts of the solution, the bigger issue noted is reframing business as an inclusive, supportive place to work.
#10 Pay and rewards will get a serious refresh
In 2022, Bersin believes, rewards and recognition will get "fresh eyes." Equitable and fair pay was found to be among the greatest drivers of employee satisfaction.
"This does not mean we have to pay people more (which often we do). It means we have to focus on pay equity, transparency of the process, and fairness in reward and recognition. In fact, if you want to win the war for talent in 2022, fair pay may be one of your biggest techniques."
Companies with a lot of hourly workers—retail, hospitality, healthcare, manufacturing, and more—now increasingly realize that people want access to the money they earned as soon as they earned it, breaking open the old way of processing payroll biweekly with on-demand pay. With new technology, it is now "possible to do this without burdening the employees with heavy loans, using ATM-like features to dip into already-earned money before payday."
#11 Sustainability and global climate change will become HR priorities
"In many ways, HR is a 'canary in the coal mine' when it comes to corporate culture. Every new issue that impacts employees—such as diversity and inclusion, fairness in pay, and mental health—reaches HR first, and then becomes visible to CEOs and CFOs. This is also the case with climate change.
"While climate change is daunting to fix, to say the least, we all have to pitch in to heal and repair the damage that has been done," Bersin writes.
For employers, there are two big issues at stake. First, every company now has a brand and responsibility to address global climate change in a real and meaningful way. Chief sustainability officers are now coming into their own, and they are looking at the supply chain, manufacturing practices, and eventually employee use of energy, commute, and other factors. ServiceNow just announced a commitment to help convert companies’ ESG goals into reality by providing visibility and transparency across their programs and initiatives.
The second, more important issue for HR is the impact on the employment brand. More than 65% of people surveyed in the US said they will not work for a company that does not have a focus on sustainability, carbon-neutral strategies, and environmental protection.
On the flip side, research shows that companies that prioritize sustainability are much more likely to be considered a great place to work, have much higher employee retention rates, and even see higher levels of customer satisfaction and loyalty, Bersin notes.
HR leaders now have the responsibility to lean into this problem and demonstrate its impact on the business. Similar to DEI, in which HR leaders are both owners of the problem and the brand impact, global climate change will only get more pressing.
#12 Companies will need to rearchitect their HR technology
If you are still running an old survey platform or haven’t yet adopted a continuous listening strategy, now is the time to do it, Bersin notes.
Crowdsourcing and employee listening platforms are now seen as essential. "Without them, you’re flying blind.
"And, as we learned from the pandemic, employees want to trust that you’re listening. Trust, the most highly valued element of employee experience, is built around your ability to listen. This shift in technology is a big topic for the year ahead."
#13 The people analytics crusade will touch on every aspect of your business
Until fairly recently, HR has been way behind in leveraging analytics. Companies typically have multiple HR platforms tying into other back-office systems, and they're often isn't a way to consolidate data for an employee.
In an attempt to get around this, leaders build data warehouses, data lakes, or data portals with the goal of seeing everything we need to know about each employee, contractor, or leader.
Enter people analytics. Today people analytics teams have some of the most sophisticated tools in the business at their disposal. Yet, Bersin writes, HR is still well behind other business areas.
Thus, he shares: "In 2022, you will see continued focus on analytics and the benefits data analysis can offer. For example, in the pandemic, we used analytics to enhance vaccine management and work scheduling. Now that many HR organizations have an analytics infrastructure, CHROs are going to be asked, 'Can you get me a view of how well our hybrid work program is going?' and other such questions. Which groups are most impacted by mental health challenges? What is the ROI of all the wellbeing programs we’ve launched? Where are careers and skills changing the fastest and what roles and jobs are falling behind? And who are our HIPOs and highest-potential young people?'"
"There are hundreds of data-driven questions to answer in HR. Additionally, CEOs are now looking at diversity, pay equity, sustainability, tenure, retention, and more. We, in HR, have to really step up our analytics game."
#14 Building HR skills and capabilities will be a non-negotiable
"Among all the changes coming in 2022 and beyond, the biggest of all is that HR itself is now a design profession in which every HR professional is being asked to consult, design, listen, and adapt," Bersin highlights.
HR teams and individual professionals must stay up to date, as "organizations with great HR capabilities out-hire, out-perform, and out-innovate their peers."
Additionally, it is important to recognize HR can no longer function in silos.
Bersin notes: "Certainly, you have CEOs and service-delivery teams all over the world. But as the pandemic showed us, it’s when people know each other and shares new ideas and solutions that HR really thrives."
Therefore, one way to create a connected business function is for employees to come together for an academy-oriented professional development experience.
#15 The CHRO role will be integral to organizational success
As Bersin aptly puts it: "The old debate about HR having a seat at the table is now over. Every single business issue comes down to a discussion about people, and we, as HR leaders, need to keep pushing ahead.
"Over the last two years, HR leaders have become experts at empathy, flexibility, empowerment, and health. You’ve learned about agile design, the global supply chain for talent, internal mobility, and new approaches to leadership. And you’ve learned how to bring the employee-first focus to your CEO, CFO, and CIO."
Thus, in 2022, HR must continue this effort. While companies have become more focused on human-centered leadership during the pandemic, it is important not to slip back as we go back to a more normal economy. In 2022, there will be issues of inflation, higher interest rates, and an intense need to improve sustainability, climate protection, and environmental care.
Additionally, in the year ahead, as the labor market becomes "hypercompetitive", it will be up to the CHRO to drive the internal mobility, new career pathways, recruiting, and employment branding that the company needs to flourish grow. Challenges ahead will include upskilling the HR team, organizing HR around agile design and delivery, and continuously innovating around the employee experience, recruitment, hybrid work, and multigenerational career paths.