State of HR report 2020

Covid-19 affecting 2020

What a year it’s been in human resources. Like so many other functions of the business, HR had its lofty goals and well-intentioned initiatives turned upside down in 2020.

The turmoil that came with the year of COVID-19, however, was not completely in vain for HR, as many CHROs took the long-awaited seat at the leadership table to help executives and business leaders navigate what was mostly a people driven crisis. The cost to the business, however, has been significant.

A year that started with a fair amount of optimism shifted quickly toward a large volume of layoffs and furloughs. By the time Q3 and the summer beckoned, the scale of the crisis had reached global proportions and human turmoil was hitting new heights as the death of black Americans at the hands of police sent waves of shock and horror throughout the collective psyche.

To say that there were concerns about mental health in 2020 is putting it lightly. The pandemic increased isolation for some, changed expectations and hours of work for others and forced parents to co-locate with children as they worked, and kids attended school. Industries deemed essential saw dramatic increases in demand and stress across the board skyrocketed as politics fused with every aspect of our lives, culminating in an election unlike any we’ve ever seen.

The question now is, what did it teach us about ourselves, our organizations and the resiliency of the global workforce? Furthermore, how will it impact our future and what lessons will we be applying for the years to come? In this report, we’ll attempt to answer those questions with insights gleaned from our annual State of HR survey and reflections from HR thought leaders.

The HR Exchange Network conducted the survey during the months of September and October 2020. Of the respondents more than 51 percent designated themselves at the director, VP/SVP or C-Suite level. More than 49 percent of respondents said their companies employ 1,000 workers or more.

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HR in spotlight

Numerous comparisons between CHRO’s during the time of the pandemic to that of the CFO during the Great Recession were made over the last year and with good reason. It was HR that saw the organization through some of its toughest times, refining talent strategies and keeping employees engaged at a time when the world was full of distractions.

More importantly, CHROs have made the business case for their teams to be at the centre of everything during this time, whether that’s leadership development, IT strategy or learning and development. As a report from Deloitte in May noted: “Humans need to be viewed not as interchangeable cogs in an organization, but rather as individuals with unique and disparate experiences, thoughts, attitudes, needs, and, ultimately, value—all of which makes the management of the human element at work more important and complex than ever before.”

A personal touch from HR has been key to keeping people on board and feeling psychologically safe in 2020. Employees needed greater flexibility and employers could see without much effort the kind of strain the environment around employees was putting on them. After budget cuts, the shift to remote work and employee mental health and wellbeing were the most popular answers from our survey respondents. The flexibility and adaptability that HR had to not only show but create was an effort that would prove taxing.

Those answers are consistent with the answers received when we asked respondents what their biggest challenges were in keeping people engaged, with burnout and blurring of work and personal life being the top concerns for more than 50 percent of HR people. Not coincidentally, burnout was also the second most common answer when respondents were asked what the biggest consequence of the pandemic was for HR.

What is your biggest challenge in keeping employees engaged?

“Burnout of staff was the single biggest challenge we had, whether it was HR staff or customer facing staff,” Rhonda Hall, CHRO at University Federal Credit Union said. “From an HR perspective, we’ve been in the centre of all the decisions that are being made to accommodate people’s needs. Being a people first, cultured organization, the first question we ask is what’s going to be the impact on our employees?

That has added a layer of complexity, but it’s been worth it.” Being at the table for every decision has had its consequences, however. The reason mental health has become such a concern is the nature of the crisis and the length of time that it has dragged on around the country. With hundreds of thousands of fatalities nationwide and leaders in government struggling or even refusing to address the spread of the virus, 2020 has been an emotional journey for many people. As a result, 50 percent of respondents say they implemented new wellness programs as a method of offering support for employees, while 40 percent say they began to offer mental health coaching.

“The biggest consequence has been the emotional toll on the people,” Hall said. “And it’s been in waves. Back in February and March there was all the anxiety about the virus and the unknown nature of it and then it was having the kids at home after Spring Break when they didn’t go back. That carried into the summer when summer camps didn’t re-open, and people were seeing spikes and getting nervous about the idea of kids going back to school or them coming back to work. Now they’ve been at home so long they feel insecure and disconnected and then the holidays aren’t going to be normal. All of those things fall on HR’s plate.”

HR’s front row seat to the employee experience went well beyond work in 2020 and straight into people’s lives. That view then had a profound impact on what HR professionals began to target for initiatives and goals that would help tackle people challenges and keep people engaged.

What was your biggest priority during the pandemic?

“The culture of the organization as a whole is going to determine your success in these areas,” Hall said. “We did our biggest employee engagement survey in August at a time when there was a great deal of racial tension, growing political tension due to the election and a lot of stress around COVID and kids returning to school. But our employee engagement numbers were in the top 2 percent of Gallup’s results. I say this to illustrate that the culture of the organization drives what your next normal becomes. We’re a relationship based, people focused culture and we want that to remain, no matter what the next normal looks like and those results showed we’re succeeding.”

Budgets and investments

HR is now positioned as a centre of innovation and strategy as opposed to an administrative function. With that status comes a fair amount of pressure as budgets have been slashed and workforces diminished. As part of the survey, we asked the question “What has been the biggest challenge in the wake of COVID-19 for your organization?” The top answer to which was budget cuts. While nearly 30 percent of respondents said they didn’t expect changes to their budgets in 2021, 42 percent said they anticipated a decrease. That, as you might expect, is not often coupled with a decrease in expectation.

Comparison on budget Views 2020 vs 2019

Mirroring that, the most common answer to the question of the biggest consequence of the pandemic was “market uncertainty.”

The biggest consequence of the pandemic for HR was...

There has been a great deal of attention paid to the changing needs of the business in 2020, but just as important has been the needs of people adjusting to a new era of work.

“The work model has changed,” says VP of HR for Larosa’s Pizzeria and author of HR on Purpose Steve Browne. “Something as simple as being able to connect virtually significantly changes how companies and consumers spend their money. People took staffing reductions very seriously. In 2008, the cuts were made because there were a glut of people in our companies, but now, we’re not cutting so much because there is a glut, it’s that we don’t know what work is going to look like in the coming year and therefore we’re being financially strained. Patterns of how people act as consumers are changing and now budgets are having to change with them.”

What HR chooses to invest in over the course of 2021 will largely be based on the challenges it faces in making the new normal not only as productive, but as collaborative and innovative as the old normal. It’s also going to be important for companies to figure out what to do with the massive amounts of data being created by new technology platforms that are being used. For these reasons, it shouldn’t come as a surprise that the top two answers from respondents in regard to technology their companies plan to invest in come 2021 were remote work technology and analytics.

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Finding ways to create employee connectivity that more closely mirrors the in-persons cultures organizations have long been used to be a theme in the survey results. Currently, the vast majority of respondents are using a somewhat standard suite of tools to keep their people connected, such as team chat, video conferencing, virtual collaboration tools and even tapping into social media platforms.

But there are signs that creating a holistic virtual employee experience is becoming a bigger priority when it comes to investment. In examining investment priorities for the next 6-12 months, the figure below shows respondents biggest priorities.

What are you / your company investing in the next 6-12 months?

2019	2020
Performance Management	Remote Work Technology
Career Pathing	Analytics
Analytics	Performance Management
Learning Management System	Employee Self-Service
AI / Machine Learning	Learning Management System
Employee Self-Service	Cloud Based Technology
Cloud Based Technology	Career Pathing
Mobile Technologies	Employee Surveys
Remote Work Technology	Social Platform for Employees
Applicant Tracking Systems	AI / Machine Learning

 

 

 

 

 

 

 

 

What we see here is a growing commitment to the employee experience through the use of more surveys, new cloud-based technology, social platforms, employee self-service technology and a greater commitment to performance management, learning and career pathing. All of these are examples of how HR is targeting systems that can help people attain results, but Browne has a bit of advice: keep the people in focus.

“All issues are people first,” Browne said. “HR can be the connector between people and the systems they need to do their best. If you start with people first and then get all the equipment and systems involved that they need to be successful, the business is going to get better results. If you spend too much worrying about systems and the results they create, the people are still there. Are we helping them do their best? Or are trying to fix what they’re doing wrong?”

Also read: Analytics

The forced flexibility challenge

Remote work was something that had been widely discussed for a long time in Future of Work discussions and in conversations around the changing workplace culture. Before the pandemic, research from PricewaterhouseCoopers showed that around 40 percent of employees surveyed didn’t work from home at all. As the impact of lockdowns and restrictions set in, most found themselves working from home full time.

That has presented a mixed bag of results, with some organizations struggling more than others. But in the end, most organizations and people were able to make an adjustment that experts previously predicted would take years. The fallout from that is that now, many employees expect to be able to continue working remotely at least some of the time after the pandemic ends.

The remote portion of the challenge, however, points to a larger shift in expectations around creating a flexible work environment. It was a top priority for a significant number of respondents after the pandemic hit and something that they expect isn’t going away.

Also read: Post Covid Employee Management

“We asked what people needed and they responded,” Hall said. “What a lot of people said they needed was to shift their hours a bit. Whether that was working split shifts or working some hours on a Saturday or Sunday, it was just about asking and listening and finding scenarios that would work for the individual. The commitment we had in HR was doing what we needed to get to yes as the response to their requests. How could we help them to do everything they needed to do, and di it well?”

That sentiment was echoed broadly in the survey. Roughly 75 percent of respondents said that they had implemented flexible work hour policies to support employees.

Have you implemented any of the following policies to support employees?

The situation has put significant strain on managers as was noted in a recent report from Harvard Business Publishing . For many, managing an all-remote staff was markedly different from what they’d been accustomed to and would often require that they demonstrate agility and flexibility on behalf of the organization.

Having passed the remote work challenge and demonstrated that flexibility is possible, many organizations realize that they simply can’t do an about-face on such a drastic culture change. There is no closing Pandora’s Box. For Hall, this has meant preparing everyone for a future that looks nothing like the past.

“As an executive team, we’ve made it a priority to eliminate the phrase ‘when we come back’ from our vocabulary,” Hall said. “Instead, we want to talk about ‘when we transition to our next normal, whatever that is.’ Because words have meaning, and I don’t think we’re the same people today that we were back on February 7 when we started having people work from home. How can I ask people to go back and become the way they were, when they simply aren’t the same people? We aren’t picking up where we left off and what that next normal looks like is something that the whole of senior leadership is coming together to figure out.”

This flexibility, however, naturally raises questions about culture. How do you maintain it? How do you grow it? What does it even look like?

When we asked respondents what initiatives they’d put in place to ensure that company culture didn’t go the way of the dodo during COVID, the responses were varied, but told a consistent story. It was focused on engagement, employee experience and being honest about where the business is and where it needs to go.

What are you doing to maintain or improve company culture?

Hyper focused on L&D

All the talk about agility and adaptability that has emerged in 2020 is natural given what was required of businesses in the last year. But as we move forward, to continue to be flexible and agile, businesses will have to develop their people to move away from stringent skillsets and static functions within the organization and more toward broader skill clusters and working within networks of teams.

Driving this will largely fall to learning and development business partners. Their central role in cultivating the workforce needed in the years to come is plain to see, but what isn’t quite as clear is where priorities should be moving forward. When we asked, “what is your focus in L&D for 2021?” the responses varied greatly, showcasing the various starting positions organizations are at as they begin infusing learning into the employee experience more regularly.

What is your focus in L&D for 2021?

The top answer from survey respondents was “creating new learning pathways, something that is largely driven but the sudden digitalization of a lot of learning content and the technology that makes that possible.”

“It’s a term that gets thrown around with a lot of buzz, but this whole movement toward skill development has been on executive priority lists for a while,” Christopher Lind, Global Head of Digital Learning at GE Healthcare said. “We’re just starting to catch up to it because the technology is now reaching a level of maturity where it is structuring and organizing learning into a meaningful path. For our part in L&D, we have to do a really good job of working with our HR counterparts now to decrypt what actually are the different skills that go into different jobs.”

Lind notes that for a long time, organizational infrastructure has been centred on job roles. But now, L&D finds itself asking what do people really do and what skills do they need to do those jobs well? Answering those questions lays a foundation for skill development.

“Once you know that, it becomes much easier to align the learning pathway toward that goal,” Lind said. “It also makes it easier to figure out what tech you need to do it, so that the technology can help you organize the work and do it.”

Also read: L&D

The next two most common answers to the question were “converting in-person training to online content and improving their L&D technology. The latter presents a conundrum in that the last few years has seen a boom in L&D tech vendors though the industry is only just starting to catch up to the possibilities.

“It makes sense, because a lot of people in our industry have known they needed to be digital for some time and they’ve been putting it on the back burner,” Lind said. “Well now, the back burner just caught fire and is burning down the kitchen. A lot of folks are in the early stages, but hopefully as we end 2020, everyone has put on the necessary Band-Aids. When this started, it was a bit of a mad dash just get things digital, but now is a good time to ask where we want to go to improve this stuff that we’ve made digital.”

In assessing technology, Lind insists that you first have to know what you’re solving for, but there is no set list of must have technologies.

“If you’re learning tech is still just distributing content, you should be looking at something that can take that to the next level in terms of personalizing, aligning it to skill frameworks, etc.,” Lind said. “If you’re further along in that curve, you might be able to leap frog over some of the existing learning tech platforms and start thinking about experience technology. It’s coming fast and that may not be just VR/AR, but stuff that allows you to build it right in to the work people are doing.”

That effort to develop new skills as part of reskilling/ upskilling efforts has become an important part of the organizational development conversation in 2020. Roughly 85 percent of respondents either agreed or strongly agreed their reskilling/upskilling was a significant part of their plans for the immediate future.

“As a starting point, partnering up with your talent teams can be really valuable right now,” Lind said. “L&D has stayed in its silo for a long time and it’s time to break that down to talk with talent management and acquisition teams to find out from them, from a workforce planning standpoint, what they’re anticipating. But also, talk with vendors. A lot of these folks have tons of data that can help inform your decisions and when you talk with business stakeholders like your talent teams, you can come into that conversation and say ‘hey, actually I think your pain points are a result of these skill gaps based on this data.”

The hope of 2021

At the outset, we noted what a wild ride 2020 has been, but looking ahead, it may have set a lot of industries up to be a in a good place for 2021.

By adapting to the challenging circumstances of 2020, there’s a greater ability to adapt yet again and to apply the lessons learned along the way. With a vaccine looking increasingly likely to appear in 2021, there’s hope this crisis may be under control by the end of the next year. Businesses, therefore, can begin to plan their futures a bit more and figure out how to set themselves up for whatever comes next as they aim to recover from the fallout of the COVID era.

But there is also a people challenge as the new normal becomes clearer and organizations once again shift how people work. Many are considering a hybrid approach to the remote vs on-site dilemma as a reaction to changing employee expectations and broader concerns over safety. “I think what’s going to have the biggest impact on HR in 2021 is going to be helping people adjust and conducting that change management to the next normal,” Hall said. “It was a big change for people to go home and it will be a big change for people coming back because of what coming back looks like. It’s going to be a big challenge to work in yet another hybrid model.”

What do you think will have the biggest impact for HR in 2021?

As HR settles into that aforementioned seat at the leadership table, it’s time for those leaders to get comfortable in that position. Browne wants to see HR professionals take more of an act like you’ve been here approach and now figure what’s next so that HR leaders continue to be heard at the highest levels of the organization.

“People tend to settle, and we can’t do that in HR,” Browne said. “We sometimes get all excited about a new development and eventually we come back down. I think we need to say, ‘we were called upon to lead and we did, now how do we lead more and be consistent and effective?’ Stop the seat at the table argument. Just be a leader because you’re in HR and you should be the connecting point for people in your organization.”

What trend do you think will be most important for HR in 2021?

When it comes to learning, 2021 is going to be a year of reckoning in some ways. Reskilling and upskilling was a reasonably common answer in the most important trends for 2021 question because there was a lot of money and effort spent modernizing and, in some cases, revolutionizing the organization’s approach to L&D. There’s going to be an even greater focus on the business benefits and what was the impact on the workforce.

“The level of accountability on the work we’re doing is only going to rise,” Lind said. “It’s high now, but it’s going to continue rising. We got a little bit of a pass this year because everyone’s hair was on fire in 2020. We’ve made some mistakes and it was okay to make mistakes because in a lot of cases we were just trying to figure things out. But as we go into 2021, we will be held accountable, now that people know that it can be done, we have to show through analytics and insights what we’ve done and what the business has got out of it.”

Also read: Reskilling and Upskilling