The CHRO’s agenda has never been more daunting than it is in 2022. In addition to their normal workload, CHROs have been dealt a full hand of challenges that have a direct impact on a company’s ability to recover and grow.
The agenda is particularly difficult for CHROs of midsize and emerging enterprises, which typically must meet big-company tests with small-company resources. For example, an organization with 300 full-time employees usually has just three or four full-time HR people — enough to cope with business as usual, but not with extraordinary challenges.
Data from Deloitte’s sentiment study shows the scope of these issues. After a year where most company payrolls shrank or held steady, more than 61% of middle-market companies say they will add to their workforces in 2022, while just 4% will reduce staff further.
But hiring practices that worked in 2019 may not work in 2022. Where will new employees come from? How can companies make their case (i.e., sell their employer brand) in this new environment? How should candidates be interviewed? What’s the best way to onboard and integrate new employees, whether they’re onsite or working from home?
At the same time, current employees — in the company as a whole and within HR — need to learn new skills, chiefly digital ones. Training ranks second on CHROs’ priority lists, after hiring, but more than 55% of CHROs tell us their training and development capability is either weak or extremely weak, which is not surprising given how thinly staffed they are.
The need for digital and data-analytics skills exacerbates the problem, because HR teams themselves often lack those skills. Sixteen percent of HR leaders say that their top departmental challenge is addressing weaknesses in HR processes, information systems, and use of analytics tools — weaknesses revealed because the pandemic forced HR to rely more on technology to do their jobs.
Improving skills and technology go hand in hand. Many issues faced by CHROs have little to do with software availability but more with how well we use what we have. Prior to the pandemic, we could get the job done using bits and pieces of the technology available to us. We mastered workarounds. Many employees ignored the training we offered them, and we let them.
That patchwork fell apart when customer interactions increasingly moved online and we started working from home. Our computers were hardwired to office networks. For a while, we couldn’t even get enough laptops. Once we were able to stock laptops and significantly increase remote utilization, lines and servers failed — not across the board, but enough to highlight needed infrastructure upgrades (for example, to improve our customer relationship management software and integrate our HR information system with the accounting system).
As the worst of the pandemic passes, HR leaders face a fourth challenge: Recharging employee engagement and productivity in a remote, hybrid, or otherwise changed workplace environment. Burnout — not just “Zoom fatigue” — is all too common as remote employees often sit at their desks for 12 hours a day without the natural breaks and informal chats of pre-Covid working life. New cultural divides may open — for example, between teams that can work mostly from home and frontline employees who don’t have that option, or even between those working from comfortable home offices and those at kitchen tables.
When the pandemic began, performance management was put on the back burner as enterprises struggled to operate remotely, find cash, adapt, and survive. But, almost a year later, investing in talent development through a performance management process is a focus for CHROs. Over 50% of sentiment study participants in the Deloitte study rated their performance management process as extremely weak or weak.
Ad hoc or ineffective performance management processes stifle growth because companies fail to find and reward their most productive employees (and weed out the least productive). Weak or nonexistent performance management brews a toxic culture of mistrust, uncertainty, and favoritism, where employees feel marginalized, don’t know what they need to do to succeed, or don’t understand why one person got promoted and another didn’t.
These issues, exacerbated by the pandemic, hit middle-market companies especially hard, because they’re likely to have relied on informal people processes and may erroneously view formalized performance management as too bureaucratic. Investing in employees — particularly those with high potential — is at the top of the middle-market CHRO agenda as critical to recouping any productivity losses, energizing the workforce, and consequently driving enterprise performance in 2022.
Finally, diversity, equity, and inclusion (DEI), an imperative prioritized by the current cultural climate is a top priority for CHROs in 2021. While many enterprises touted a commitment to DEI prior to the racial unrest that began in the summer of 2020, those events were a revelatory catalyst for the need for a more strategic, integrated, comprehensive approach. Additionally, Covid-19 itself and the organizational response to it (from school closings to layoffs) has hit women and minorities disproportionately hard.
Looking forward to 2023, almost 75% of sentiment study participants said DEI is somewhat critical to very critical to the future financial performance and sustainability of their enterprises. The real issue for CHROs is how to accomplish that with already full plates, little to no horsepower, and limited true expertise in an especially complex area of enterprise change.
Given how resource constrained HR is, how can a leader cope with such a big agenda?
Here are four tips based on our experience.
1. Don’t go it alone. Each of these initiatives has natural allies. For example, workforce optimization is something that both you and the COO can benefit from. Enlist that person as a co-sponsor, source of funds, etc.
2. Get advice from peers. A lot of what’s written about these types of issues is aimed at big companies and might be too expensive, complex, or “process-y” for a middle-market company. Peer networks can be a great source of advice and a way to connect with outside advisors who work well with companies your size.
3. Bring in external expertise and horsepower. There’s often not enough time or internal expertise to try to tackle these bigger initiatives without outside help, but it’s worth the investment — otherwise it might never get done. DEI is an example: Few midsize companies will have enough specialized knowledge to initiate a DEI program internally.
4. Above all, use your company’s strategy to help you set priorities and command attention from the CEO and others in top leadership. Too often, even worthwhile HR initiatives are treated as organizational afterthoughts (“nice to haves”) after dealing with top-line growth, margins, and operational issues. Things get much easier when the CHRO can draw a straight line from business operations to people projects — for example, helping sales reps develop the skills to sell remotely, or improving efficiency by connecting HR information systems to the CFO’s office.
ServiceNow tools such as the Employee Experience Pack makes it easy for companies to accomplish the four tips mentioned above. The Employee Experience Pack that sits on top of ServiceNow makes it easy to capture data and information across the organization and deliver it in an easy-to-consume manner without your employees having to search all over creation or call a help desk to find what they need.
You can also customize their experience based on generational demographics, department, geographic location, and a whole host of other factors. This means that employees can easily find opportunities for advancement within your organization and get access to content that builds their skill sets.
The Employee Experience Pack also facilitates easy communication across your organization. You can give and receive kudos, recognize employees for a job well done, and personalize your team member’s experience based on several variables.
Leveraging the Employee Experience Pack has allowed organizations to transform the employee experience in ten (10) weeks.