What’s New for 2022? Workplace Trends for the New Year

Quick Look: SMB employers are updating policies and processes to respond to shifts in employee preferences, changing legislation, and the realities of an enduring pandemic. Here are some of the top workplace trends we see for the year ahead.

Small- and medium-sized businesses (SMBs) have shown remarkable resilience over the last few years. Dramatic social changes and the realities of an ongoing pandemic have caused many SMBs to examine their business’ strengths and which systems and processes need improvement. Stakes are high and budgets are tight. Employers can’t afford to return to “business as usual.”

Based on our experience providing expert HR support to businesses in multiple industries, here are some of the top trends we see for SMB employers in the coming year.

Strong focus on employee engagement and workplace culture

Most leaders already know that employee engagement has a direct impact on an organization’s financial health and profitability. Per McKinsey, 51% of workers said “not feeling a sense of belonging at work” contributed to their decision to leave. Culture is integral to every business—but is especially important for SMBs. If the organization lacks the resources to offer high wages, positive company culture and engagement programs are two areas where the company can still stand out.

Every company’s culture will differ and should reflect the values and priorities of all employees, not just upper management. Employees want to feel valued and respected; they want to know that their work is appreciated, and that their opinions are heard. SMB employers should actively solicit input from staff via employee satisfaction surveys, anonymous suggestion boxes, and frequent one-on-one check-ins with HR. Company leaders can seek support from their broker or PEO company to develop survey questions and interpret the results.

Successful SMBs must be willing to take an honest look at what is working well and what needs improvement. Failure to address weak or toxic company culture will result in the business falling behind competitors with a more positive working environment.

Remote and hybrid work models

Work-from-home arrangements are still going strong. Many workers today not only embrace the remote working model—they demand it. According to Owl Labs’ study, “The State of Remote Work in 2021,” 1 in 3 employees would quit their job if they could no longer work remotely in some capacity after the pandemic.

What may have initially been a temporary arrangement is taking strong roots for many SMBs. On the plus side, remote work models mean employers now have access to a much wider talent pool. However, these businesses must navigate tricky employment laws unique to each jurisdiction where employees reside.

SMB leaders should consult their legal counsel or the HR experts at their PEO company to ensure compliant company policies for hiring, pay equity, time and labor, and tax reporting, and more.

Competition for top talent

Ah, the great resignation. Between April and August 2021, nearly 20 million American workers left their current positions—some moving to new jobs, some switching careers, and others leaving the workforce entirely.

High turnover and new minimum wage mandates have resulted in big spikes in compensation. This hyper-inflation has disrupted the compensation status quo, so last year’s wage budgets may now be woefully out of balance. In years past, wages generally increased by about 2.5-3% annually. That number may be up to double now, with some industries showing close to a 6% increase.

We are also seeing more roles being poached at higher rates. Technology was an industry where poaching has always been high, but now the competition is heating up in other industries such as HR, finance, and marketing.

SMB employers must be extremely attentive to their hiring practices and employee retention strategies to maximize budgets and keep quality employees on the team.

Investing in existing talent

According to Glassdoor, the average cost to replace an employee is $4,000 and takes nearly two months. This may be why 56% of employers consider building critical skills and competencies to be their top priority heading into 2022.

Daily job satisfaction is an important reason employees leave, but many workers depart because they cannot see a clear forward trajectory from their current position. In the coming year, SMBs must establish solid training and development programs, increase visibility with a proven HRIS management technology, and have the right personnel in place to support it all.

Many SMBs lack the internal resources to quickly develop and roll out employee development programs, so they opt to partner with a PEO company or other dedicated HR experts. This specialized support helps SMBs hit the ground running with an improved strategy for employee development.

Creative benefits offerings

Employees are paying close attention to benefit packages when deciding whether to sign with a new company or remain in place. Companies are enhancing the standard suite of benefits with creative offerings designed to improve employees’ lives, both at work and away from the office.

According to Forbes, here are some of today’s top trending benefits:

• Childcare and family benefits
• Home office expenses
• Mental health support
• Remote work and flexible schedules
• Employee resource groups

As hybrid and remote work stays in place, the lines between work life and home life remain blurred for many employees. Benefits designed to support staff outside the workplace reflect employer commitments to help employees alleviate some of the stress in their personal lives. Thoughtful benefits like these play a role in attracting top talent who want to work for companies that care.

Increasing Diversity, Equity, and Inclusion (DEI) efforts

According to a recent Willis Towers Watson survey, 4 out of 5 employers will take steps to promote DEI over the next three years. Employers recognize the value of diverse perspectives in building a resilient, responsive company. Though many businesses have not prioritized DEI in the past, it’s never too late to get started.

Even with positive intentions, SMB employers must take a careful approach to DEI initiatives. Sweeping changes to interview processes, hiring, and promotions could result in inadvertent compliance violations.

Instead, SMB leaders should work with HR experts at a PEO company to review current business practices. Their knowledge of anti-discrimination laws, recruiting expertise, and use of sophisticated workforce management software like ExtensisHR’s DEI Dashboard—which evaluates hires from previous years and compares real-time information regarding employee turnover, promotions, pay equity, and more—can help companies take a careful and effective approach to DEI.

Adapting to COVID-19 regulations

As the world enters yet another year of living with the effects of COVID-19, SMB employers have discovered the only constant is change. Federal and state requirements continue to shift as SMBs struggle to keep up.

Many SMB employers have difficulty navigating the nuances of testing, vaccination, and developing compliant company policies to address it all. Employers must be vigilant about anticipating—and responding to—changes in the law to ensure compliance with ADA and anti-discrimination legislation.

Working with a PEO company helps SMB employers advance through these tough times more smoothly. For example, ExtensisHR launched its COVID-19 Data Tracker application, which is part of our ExtensisHR Work Anywhere® portfolio of modern workforce solutions. ExtensisHR’s COVID-19 Data Tracker enables employees to easily and securely upload vaccination proof (or ongoing testing requirements) and supply vaccine information.

Laws will surely change in the coming year, so SMB employers should continue to pay close attention to regulatory requirements and work with their broker or PEO partner to revise policies as needed.

Expert HR support always helps

As in 2020 and 2021, there are no hard and fast playbooks for what’s ahead. SMB employers are doing the best they can to stay profitable and keep employees engaged. With their hands full managing the day-to-day—and a landscape seemingly shifting by the day—SMBs recognize the value of partnering with experts who are dedicated to HR management.

Augmenting internal HR departments with support from specialists instantly advances SMBs to the leading edge of human resource management. Support from a PEO company delivers stability in a time of change, provides guidance managing compliance details, and access to experts with clear answers to complex questions.

SMBs remain in the middle of a massive changes to the modern workplace. However, ingenuity has always been at the heart of organizational resilience. As 2022 unfolds, we expect to see lots of challenges—but also lots of exciting opportunities—for workers and SMB employers alike.

Make 2022 the year your company reaches its HR goals. Contact ExtensisHR today and we’ll help you get there smoothly.