Quick look: The SHRM Research Institute has released its annual State of the Workplace Report, identifying areas where U.S. businesses were successful in 2022, collective challenges they faced, and how they’re prioritizing workplace issues in 2023. As SMBs continually navigate these changes, they must adjust their plans accordingly to ensure they don’t get left behind.
Though the COVID-19 pandemic sits (hopefully) squarely in the rearview, small- and medium-sized businesses (SMBs) are still feeling its lingering effects. The economic and cultural shakeup of the past few years has caused significant workforce adjustments to emerge. SHRM’s 2022-2023 State of the Workplace Report highlights the current state companies are in, as well as how business leaders are handling the transition.
Perhaps, unsurprisingly, inflation was deemed the fastest-growing HR concern in 2022, rising 13% from 2021. Additionally, managing employee engagement and overall company morale was also listed as a high business priority headed into 2023. To better understand modern workforce demands, here’s an overview of other key findings from the report and how working with a professional employer organization (PEO) partner can help employers respond effectively.
80% of HR professionals are focused on inflation
Business leaders are concerned about how the economy will affect their companies. 48% worry about the potential need for budget cuts, and 86% are unsure how to face the consequences inflation has on their employees’ lives. Yet, even in this fragile economic state, 74% expect their workforce to expand in 2023, making recruitment and retention an ongoing priority.
However, attracting top talent has proven to be its own obstacle. 80% of HR professionals cited labor shortages as a top concern in 2022. Challenges stemmed from a lack of qualified candidates, as well as a push for companies to keep up with competitive compensation. Add to it the spike in living costs and what remains is still an employee-controlled market as people hold out for job offers with the highest salaries and most relevant benefits.
35% of employers are bringing the workforce back in person
As of May 2023, COVID-19 will no longer be designated as a public health emergency, but it was still a part of the conversation in 2022, particularly with regards to workplace environments. The SHRM survey reports 47% of employers were focused on bringing their workforce back in person last year, but now only a little over a third of employers have it billed as a main priority. A determining factor in this percentage decline is the popularity of remote work. What once was a pandemic protocol has now become a significant recruiting strategy. After being forced to adjust to stay-at-home situations in 2020, many acclimated to the transition by 2021. Then, headed into 2022, a majority of employees found they actually preferred the flexibility of the option, with Pew Research Center revealing 64% have found better balance due to teleworking.
72% cited mental health as one of the greatest external challenges
Another post-pandemic demand is mental health benefits. This pressing workplace issue has become a crucial part of a recruiting and retention strategy. Over 80% of employees prefer to work for companies offering support for mental health concerns. However, despite the overwhelming call for more inclusive benefits, only 38% of HR professionals said they believed to have effectively supported employees experiencing mental health challenges in 2022.
Therefore, in 2023, mental health has skipped to the front of the line as a must-have initiative. Employee burnout can be costly for businesses in more ways than one. Untreated stress and anxiety can have residual workplace effects leading to loss in productivity, increased employee absenteeism, and higher employer turnover, to name a few. Now over half of HR professionals are making the pivotal move to implement better mental health benefits to keep companies competitive and employees feel well cared for.
Prioritizing next steps with a PEO partner
Keeping up with the costs of inflation while also maintaining an engaged and productive workforce is a full-time effort. The last few years may have accelerated certain changes, but there’s no sign of a slowdown any time soon. Therefore, SMB leaders seek flexible solutions to stay agile and support company growth, which has led many to believe working with a PEO partner as critical to their strategic, long-term advantage.
A PEO like ExtensisHR offers SMBs premium benefits at an affordable cost. It also saves SMBs time and money through a comprehensive portfolio of services, guiding business leaders through present-day industry concerns and preparing them for future challenges. Among the HR services offered include:
By tailoring a benefit solution to each SMB’s unique needs, it ensures compensation packages are competitive and relevant to an ever-evolving workforce. A PEO also tracks benefit enrollment, IRS and state regulations, and market demand to establish cost-effective solutions necessary to recruit and retain quality talent.
While other PEOs typically offer recruiting as an a la carte service, ExtensisHR delivers a 45-day talent management and recruiting solution at no additional cost as part of our complete list of HR offerings. We leverage our network to attract and secure the best candidates for your company’s open positions and provide interview assistance, offer letter consultations, and more.
With time-saving technology, ExtensisHR’s Work Anywhere® platform allows SMB leaders to conveniently manage pertinent HR tasks. Our technology focuses on key areas to support business growth while saving SMBs valuable time and money. It also provides important work performance insights to identify areas of improvement and streamline strategies, as well as a sleek mobile app for managers and employees to access their HR data on-the-go.
Knowing what to prioritize now as well as how to plan for what’s next is easier with a PEO partner. Our team of HR experts focus on industry updates and how they specifically apply to your company to support your continued success.
We simplify HR and make it work as part of your strategic plan. Contact ExtensisHR today to learn how we can support you.