2022 was a volatile year for HR & workforce
The pandemic upended a lot of established norms. The terms ‘Great Resignation’ came to be used in 2021 and was a result of intense competition for workers, as reflected in a high number of job vacancies and a lower unemployment rate. Employees who had deferred the decision to quit early during the pandemic, chose to do so in 2021 and this trend continued in the early part of 2022. The pandemic has seen an increased use of technology and digital media, this led companies to rapidly hire and add to their workforce. More options available led to a ‘war for talent’ and more employees quitting their existing jobs. ‘Great Resignation’ is also attributed to other factors, like:
• Pandemic experiences that led some workers to reevaluate life priorities and reduce working hours or leave the labour force entirely.
• Employers demanded employees return to the office after allowing remote work in 2020-21.
While there was a surplus of job opportunities in the first half of 2022, the latter half saw the economy tightening. The factors leading to this were:
• Job cuts and hiring freezes are mainly concentrated in sectors with the most sensitivity to the U.S. Federal Reserve policy of raising interest rates to control inflationary costs. This is also reflected in the Indian market and the stance taken by the Reserve Bank of India (RBI). Rising inflation and interest rate hikes increase the cost of doing business, leading to a reduction in corporate profits.
• The Great Resignation forced tech firms to raise salaries to attract and retain employees, contributing more to inflationary pressures. Layoffs in the tech sector show how fast inflation and interest rates are negatively impacting the balance sheets of the once fast growing firms of the Covid years.
• Growing too fast, beyond the point of diminishing returns: In tech and consumer businesses, where growth depends on innovation, companies must prepare to build a new growth cycle when the old one ends. This may involve eliminating a business unit, shutting down an underperforming operation or reorganising to adjust to changes in the market. Companies that grew their employee base too fast anticipating further growth now find themselves laying off employees to optimise cost and improve productivity.
The shifts in 2022, from organisations struggling to retain employees to laying off employees represent the volatility in the market and how employers and employees need to quickly adapt to changing dynamics.
2023: Will it be a turmoil again or peace?
The spectre of recession and the geopolitical situation in Europe has already affected and will continue to affect organisations, employees, and the HR function. For 2023 the key focus areas will be:
• Organisational design and change management Organisational design and change management remain a top priority, as organisations are seeing the fallout of too much change and uncertainty. According to Gartner Workforce Change Survey, employees are also growing more resistant to change — in the 2016 survey 74% of employees were willing to change work behaviours to support organisational changes, but that number dropped to 38% in 2022.
HR leaders must help employees to navigate change and mitigate the impact that change may have on their work and, more importantly, their well-being.
• Human and humane’ leadership effectiveness: As organisations and society evolve, so do the expectations for what leaders are responsible for, making their roles increasingly complex. Today’s work environment requires leaders to be more authentic, empathetic, and adaptive.
• Employee experience: Many HR leaders struggle to identify the internal moves that employees must make for their career growth. In a recent Gartner survey on employee career preferences, just 1 in 4 employees voiced confidence about their career at their organisation, and three out of four looking for a new role were interested in external positions. This presents new career imperatives for HR leaders to create best-fit careers for employees.
• Future of work: Anticipating future talent needs is at the epicentre of a future of work strategy and is a top priority for HR leaders. In 2023, HR will need to manage volatility and enable business leaders and employees to manage changing needs proactively.
Companies that grew their employee base too fast anticipating further growth now find themselves laying off employees to optimise cost and improve productivity
Countering employee burnout
Engaged employees are more productive and their contribution leads to better results for the organisation, on the other hand employees who are suffering from burnout will not be able to contribute to their full potential. Many organisations acknowledge the importance of emotional and mental well-being and have programmes in place for the same.
When well-being is a priority, managing burnout is an imperative. In contrast, when well-being is an HR-driven nice-to-have rather than the norm modelled across the organisation, the workplace culture can perpetuate burnout. If an organisation’s culture promotes working excessively long hours, working during personal time, and generally putting work ahead of family, those burnout-inducing habits are going to be difficult to break.
While most burnout is due to experiences in the workplace, external influences are also a contributing factor. External stressors employees commonly face are financial problems, family and relationship issues, pet concerns, addiction, social disadvantages, discrimination, abuse, trauma, bereavement, or personal health issues, to name a few.
Looking beyond work output & outcome
The connection between the employer and the employee is symbiotic with both needing each other. While organisations will strive to improve productivity and optimise cost in recessionary times, they will also try and engage with the employees to ensure they put in greater discretionary effort. During the pandemic, depending on how humanely employees were managed, their relationship with organisations became either more personal or impersonal. It is in the organisation’s interest to keep employee engagement high even during difficult times. They can do so by:
• Building Trust: Leaders need to develop and enforce an honest open-door policy that establishes a sense of belongingness and ensures collaboration towards a common goal, fostering a unified business culture.
• Communication when done in an honest, transparent, and inspiring manner, enables trust in employees who are comfortable approaching their leaders with queries, concerns, and new ideas and encourages a mutually respected relationship between the two.
• Recognition: Honest recognition and critical appreciation can highly motivate employees. Well-recognized employees have better work relationships stronger connections to their company, as well as increased work efficiency.
• Leaders should develop a positive and psychologically safe work culture.. They have to let go of the ‘the boss is always right’ notion and foster a learning mindset along with being humble and committed to making employees feel more at ease while expressing their opinions to create a sense of belonging in the workplace.
• Provide more employee autonomy: Leaders need to let go of micromanaging and regular monitoring Employees should be provided autonomy to enable them to take ownership and pride in their work.
33 leaders predict the upcoming trends for 2023. To find out more click here.
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