What’s keeping HR leaders up at night?

While recruiting and retention remain HR leaders’ top focus, there have been some shifts in other areas, a survey from Human Resource Executive has found.
By: | January 5, 2023

After a year that saw ongoing turnover, a complex economic situation including record inflation and startling high levels of employee burnout and stress, it is no wonder that HR leaders are concerned. Exactly what is most capturing their attention? That’s what HRE sought to find out in its annual What’s Keeping HR Up at Night? survey.

Nearly 500 HR and technology professionals responded to the survey this fall, sharing the issues challenging their organisations’ people functions and what they are doing to address them.

Here are a few of the most important themes we noticed in the research:

  1. HR leaders are laser-focused on hiring and retention

Given that 2022 saw an average of four million Americans voluntarily leave their jobs each month—and PwC estimated that about 20% of all employees would quit throughout the year—it is no surprise that HR professionals are concentrating on recruiting and retention, by far. In fact, more than 47% of respondents cited hiring and retaining key talent as their most pressing challenge, followed by improving company culture (18%) and learning and development (13%). When asked how they were spending their time, recruiting was the most-selected focus (32%), ahead of employee experience and leadership development; retention ranked sixth in this area.

Industry analyst and HRE columnist Josh Bersin—a keynote speaker at the upcoming HR Tech Virtual Conference, 28 February to 2 March 2023—says the push to prioritise hiring and retention is multi-pronged.

  1. Given current conditions, HR stress is high

The pressure to maximise the potential of the people function, despite these challenges, is weighing on HR professionals. According to the survey, more than 29% of participants said their stress levels have increased dramatically in the last year, while 47% reported they have increased somewhat. Less than 4% said their stress has decreased dramatically or somewhat.

Ben Frasier, Vice President of HR at Billings Clinic, recently wrote that the crisis of HR burnout has been a long time coming. After all, in the last three years, HR was tasked with heading up COVID-19 crisis plans, delivering pandemic-related layoff news, managing shifts to remote and hybrid work, managing changing health guidance and, more recently, struggling to combat pandemic-driven waves of “quiet quitting” and turnover.

“Companies need to recognise that their HR staff are vulnerable,” he says—not only to resigning but to the physical and mental health impacts of long-term stress. To be proactive about addressing HR burnout, Frasier suggests company leaders ensure HR has a seat at the table, invest in wellness programmes and prioritise flexibility.

“The HR crisis is yet another casualty of the pandemic,” he says, “but also offers an opportunity for organisations to rethink their values and the way their work environment and policies affect their employees.”

  1. Culture is a growing focus

More than 18% of survey respondents selected improving company culture as a top challenge, with only recruiting and retention being more of a priority. That represents a significant jump from the 2021 survey, when it ranked fourth.

Bersin says the emphasis on culture goes hand in hand with HR’s hiring and recruiting challenges, along with rising levels of employee burnout.

“Mercer research shows that 81% of employees are ‘burned out’,” he notes. “These employees are at risk of leaving, quietly quitting or just working unproductively. Companies are desperate to get people aligned, engaged and productive even as the economy slows.”

  1. HR is eager for more investment in tech

According to the survey, the most important workforce/HR technologies being used by respondents are HRIS (44%); core HR, including payroll, time and attendance and benefits enrolment (42%); and learning and development, including LMS, upskilling, reskilling training and coaching (28%). But, HR leaders want to do more with their tech.

When asked about the technology their organisations are most in need of right now, most pointed to L&D tools, followed by people analytics and performance management. Yet, HR professionals are not optimistic about actually being able to access such solutions. Almost 84% said they either wouldn’t have the budget to invest in those needs in 2023, or they were not sure.

This comes amid a new report from McLean & Company that found “significant lags” in HR digitisation, with nearly 40% of HR professionals surveyed citing insufficient budgets for the delay. Yet, the report authors wrote, the benefits of HR digital transformation should move leadership to allocate more funding for innovation.

“[HR tech advancement fuels] a more effective and strategic HR department,” they wrote, “equipped with the ability to make data-driven decisions.”

  1. L&D is having its moment

Throughout the What’s Keeping HR Up at Night? survey, respondents pointed to their rising reliance on learning and development to meet today’s talent challenges.

For instance, in addition to participants ranking L&D tech top on their wish list, L&D ranked third—after recruiting/retention and improving culture—among the challenges facing today’s HR leaders. When it comes to how HR leaders are spending their time, most are focused on recruiting, followed by employee experience and L&D. But, many feel strapped for resources in this area: Nearly half said their HR departments were not adequately staffed, and the L&D function ranked second (only after general HR) for where participants would like to see more staff added.

The heightened focus on L&D is something the Josh Bersin Academy has also seen through its research, Bersin says. Today’s HR leaders are not just, however, looking for traditional training programmes; they want to tap into offerings like capability academies and talent marketplaces to promote employee growth.

“Providing ongoing training programmes is no longer enough,” he says. “Companies want their L&D departments to be laser-focused on the key areas of business need. Our research shows that L&D departments that focus on employee growth are seeing four to five times higher employee engagement than their peers.”

About the author: Jen Colletta is managing editor at HRE. This article was first published on Human Resource Executive.