What Changed for HR in 2021

We don’t have to tell you that 2021 was a crazy year for offices, employees, businesses—and yes, HR. And never in recent history have we had a period of two years with such substantial changes to the way we work.

Let’s take a closer look at the major HR shifts we saw in 2021:

WFA Became a Real (and Lasting) Trend

Due to the transition to remote work during COVID-19, employees realized they can work from anywhere—which led to a new acronym, “WFA”. The lack of a commute has led many workers to relocate and move to states that have lower costs of living. This has directly impacted certain industries. For example, states like Texas, Florida, and Wisconsin are growing as tech hubs. 

In addition to permanent relocation, the WFA economy has encouraged employees to travel and work from all over. While working from home generally aligns an employee to their resident state, employees with a WFA mindset can go on a cross-country road trip and work in every state along the way. Since other workplace trends also became popular in 2021, like the YOLO economy, WFA is here to stay—and going to the office will never be the same.

Compliance Laws Changed

From ever-changing payroll tax regulations to state minimum wage laws, compliance has always been a challenge to keep up with. But due to COVID-19’s everlasting impact on laws and regulations, the fight to stay compliant was more challenging in 2021 than ever before. 

As they started to hire for more remote positions, companies had to adapt their policies in order to stay compliant in the states their employees were located in. This was difficult because compliance laws not only vary across the country, but can also change quickly. In 2021 alone, Colorado declared a new law requiring employers to disclose their targeted pay range in job postings, California made changes to its worker classification, and New York City announced a first-in-the-nation vaccine mandate for private companies. 

This became even more complicated when you factored in the WFA economy. Since WFA encourages employees to move, travel, and work from all over, HR teams had to figure out how to approach compliance wherever they go. If your company is headquartered in New York City and some of your employees moved to the suburbs of New Jersey, what are the compliance implications? What happens if your employee goes on a 3-month long trip from coast to coast or spends a month in Spain? Whether they officially move or just travel for an extended amount of time, companies had to be quick on their feet in 2021 and adjust their policies accordingly.

The Great Resignation Hit Hard

As 4.3 million people quit their jobs in August, the US quit rate climbed up to 2.9 percent—the highest ever recorded by the Bureau of Labor Statistics. This is just a snippet of the drastic impact that the Great Resignation had on companies across the country in 2021. 

As a result, HR teams had to navigate the challenge of attracting and retaining top talent in an increased attrition landscape. In fact, 61 percent of companies began to struggle keeping their workers, while 73 percent of employees started to actively think about quitting their jobs.

Overall, the Great Resignation forever altered the way we think about burnout, employee engagement, time off, and workplace flexibility. As we enter 2022, companies are still trying to figure out what it truly takes to retain their employees and keep them motivated, inspired, and satisfied.

Mental Health Took Center Stage

In 2021, a topic that was previously considered taboo to discuss in the workplace was at the center of conversations: mental health. Due to the sudden changes and feelings of isolation caused by COVID-19, many people were struggling with their mental health and wellbeing. In fact, a KFF tracking poll taken in the midst of the pandemic found that 53 percent of American adults’ mental health had been negatively impacted by it.

This opened a larger conversation about mental health benefits and support at companies around the world. In fact, almost 40 percent of employers expanded their wellness benefits in 2021, including their EAPs and virtual mental health services. As we enter 2022, that percentage will likely keep increasing as mental health continues to be a top priority in the workplace.

From hiring and employee recognition to compliance and data analytics, the world of HR will continue to change in 2022. So what shifts can we expect to see and how can HR technology help?