Be Proactive: Five HR Trends For Mid-Sized Companies In 2022
It’s 2022, and the world is still a bit strange. As we approach the start of the third year of the pandemic, it's a good time to contemplate how people leaders are holding up through it all.
I’ve written before about the difficulties of leading and managing in recent years and the importance of great collaboration between CEOs and people leaders. The urgency for that cooperation continues in 2022.
At Namely, we have a large customer base, and more than 70% of our customers employ between 50 and 500 employees — allowing us to really understand how mid-market companies manage people operations. I’d like to kick off 2022 with five key trends every mid-market CEO and people leader should be aware of, based on data from over 1,000 of our customers and some recently published reports. Some of these trends are more obvious than others, but I'm finding that proactive attention to many of these elements can help companies avoid headaches later.
1. More Remote Workers
The number of remote workers has increased significantly in the past two years, and many people wish to work remotely moving forward. We all know this, but what many company leaders fail to realize are the implications of a more remote workforce in the long term. Most notably, compliance requirements change as you enter new states and when your total headcount in a state starts to exceed statutory thresholds — and people operations leaders often don’t hear about these milestones until they’ve already happened.
2. Expansion To New States
Companies, on average, are in 38% more states than they were in 2019 according to my company's data. This is a big deal. Entering new states is expensive, and it’s directly proportional to the increase in remote workers. It’s a double-edged sword: Companies can recruit a broader candidate pool, but with that, comes a significant increase in the complexities of reporting and managing in a multi-state environment. It’s particularly important for people leaders to partner with finance executives to anticipate and plan for this change.
3. Greater Tax Obligations
We also found that the sheer number of tax filings is exploding — up over 42% since the pandemic began. A new state can trigger several new tax filing obligations, and unfortunately, I’ve seen (repeatedly) that companies move the employee and often forget to deal with the tax filing implications. Before long, you’re several quarters without filing and penalties and interest are on the table.
4. Higher Voluntary Attrition
A McKinsey survey found 40% of participants were somewhat likely to quit their jobs in the next three to six months. My company found that voluntary attrition increased by 10.6%. For most companies, attrition has been unavoidable. For high-performing cultures, holding voluntary turnover flat is a big accomplishment, and on average this accomplishment has been elusive for mid-market companies.
5. Increased Turnover In ‘Trusted’ Positions
My company closely tracks satisfaction and behavior for all of our user communities. But in particular, we pay special attention to contacts that are designated as "trusted." These individuals have broad administrative access and are almost always designated as administrators for all or part of the system in their organizations. During the last six months of 2021, more than 40% of our clients had a change to their trusted contacts. What does this mean? The people that are administering human capital management (HCM) systems for companies are turning over at an alarming rate. If organizations don’t fully support onboarding (which includes adequate product training), there’s real risk to both technology effectiveness and satisfaction.
During the pandemic, I’ve spoken and written about the unique challenges HR practitioners face and will continue to face — especially in 2022. Let me finish with some suggestions for how mid-market CEOs can help their people leaders succeed in 2022.
- Provide leadership and guidance to operating leaders on the subject of remote work. Work with the CHRO and CFO to make an "eyes wide open" decision on where remote work will be allowed and how to make those specific decisions. Don’t drop it in the lap of the people team after the employee transfer has been approved or the offer accepted.
- Make turnover a problem for the entire leadership team, not just HR. Support the talent acquisition and retention efforts with empathy, support and enthusiasm. Don’t just call HR with frustration about time-to-hire.
- Focus on building a strong base. I think virtually every business will have to rebuild to some extent during the Great Resignation. It’s a cost of doing business in 2022 and supporting your people team’s efforts to properly support and train the new people who will inevitably be hired this year is essential.
Here’s to hopefully seeing things settle down a bit in 2022!
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