Quick look: Many HR challenges arose during the years since the pandemic began, and 2022 was no different. HR Dive’s latest Identity of HR Survey reviews the top obstacles facing U.S. HR professionals today. Here, take a closer look at these challenges and how brokers can join forces with a PEO to help clients succeed.
Human resources (HR) departments have faced several unexpected challenges since the COVID-19 pandemic began. But what exactly has changed during the past year, and what is the state of HR today?
Industry publication HR Dive answers these questions in its second annual Identity of HR Survey, which polled nearly 400 U.S. HR professionals. In the survey, these experts answered questions regarding their role’s top priorities, stresses, and habits in 2022. It’s clear the role of an HR professional is evolving, and this gives brokers the opportunity to offer more resources to help clients solve these pain points.
1. More responsibilities
This year has been busy for HR professionals, and many businesses encountered a rising need to outsource HR tasks.
HR Dive’s survey findings reflected this. According to the data, HR service vendor use increased in nearly every category:
- Payroll services jumped 15% year-over-year (from 53% of respondents using the services in 2021 to 61% this year)
- Staffing services experienced an approximate 11% increase (from 37% to 41%)
- Executive recruiting services rose almost 8% (from 26% to 28%)
- Benefits outsourcing and consulting increased by nearly 4% (from 54% to 56%)
Why such steep climbs? The survey describes how businesses are facing shrinking HR departments, prompting the need for outsourcing vendors to help manage essential HR functions. Some departments may be the same size but instead decide to spend their time on more strategic work, while others manage the bulk of the administrative tasks and outsource strategic projects to consultants.
The survey also explored which businesses were implementing which outsourcing services. Data shows that smaller HR teams were more likely to outsource their HR functions. Interestingly, small businesses with HR departments with a headcount between one and five employees were more likely to use payroll vendors. On the contrary, organizations with larger HR departments were more likely to contract out staffing, executive recruiting, and diversity, equity, and inclusion planning.
It’s no wonder more businesses are turning to HR outsourcing partners like professional employer organizations (PEOs). Leaning on these providers enables companies to scale quickly and affordably by offloading administration tasks, strategic projects, and more.
2. Ongoing recruiting struggles
Talent acquisition continues to be a problem for many businesses. Per HR Dive’s survey, 36% of HR professionals claim that finding and acquiring talent is their top stressor, compared to training (8%), compliance (7%), and HR technology (also 7%).
This problem likely comes from two directions: the ongoing wave of workers switching jobs, commonly referred to as the Great Resignation, and an increase in people entering retirement. Today’s employees are more selective when choosing where to work—they want flexibility and learning and development opportunities—and since they are in high demand, they’re liable to be scooped up by a competitor before you can even get a job offer out to them.
On the other hand, many workers are retiring from their careers. According to recent Congressional Research Service data, in March 2022, 19% of working-age U.S. citizens were retired (up from 16% a decade ago).
Business leaders also faced pandemic-specific hiring challenges. Nearly half of the surveyed professionals stated that contactless recruiting, virtual I-9 documentation management, and remote onboarding were the most challenging aspects of HR during the pandemic. This is compared to just 22% of the responders who said budget and financial concerns topped their list.
3. Cultural changes
Almost three years ago, a large portion of the workforce unexpectedly began working from home, and now many still do. This significant, sudden shift has not come without cultural challenges.
The survey reports that managers have been trying to determine the best ways to create an engaging and consistent employee experience, whether those workers report to the same office or are located in different regions.
Employers should emphasize communication, transparency, and open, honest conversation to foster a welcoming, involving culture. Leadership can encourage managers to regularly check in with their team members and ask how they’re doing (both professionally and personally, as appropriate). Employers can also offer mental health benefits like health insurance with mental health coverage, access to an employee assistance program (EAP), and more.
4. HR departments’ reputations
Many things have shifted during the past year regarding HR, including how other internal departments view these professionals.
HR Dive’s report found that there was a slight decrease in how valued these departments feel by their organization’s leadership:
- 58% of HR departments said they felt highly or very valued (compared to 60% in 2020)
- 34% felt somewhat valued
- 8% didn’t feel valued at all
As mentioned above, HR experts have had their hands incredibly full during the pandemic era. From navigating vaccine policies to designing hybrid work schedules, there are many reasons to be thankful for these departments (and outsourcing partners). These efforts seem to have been noticed by other employees (that are not leadership):
- 27% of HR departments felt employees viewed their team very favorably
- 59% felt they were perceived somewhat favorably
- 12% thought they were viewed unfavorably
- 2% believed they were seen in a very unfavorable light
Help clients conquer it all
HR challenges continue to morph and show no sign of stopping. Luckily, brokers can set their small- and medium-sized business (SMB) clients up for success by partnering with a PEO.
PEOs, like ExtensisHR, are comprehensive and trusted HR outsourcing providers. Whether your clients need help with day-to-day tasks or bigger-picture projects, a PEO can assist with it all. For example, ExtensisHR offers:
- Fortune 500-level benefits at a competitive price
- Payroll management and tax administration
- Risk and compliance services
- Dedicated HR guidance
- Full cycle recruiting services (at no extra charge)
Unlike other PEOs, ExtensisHR also maintains a broker-centric philosophy. With your business objectives and clients’ success in mind, we help you grow your book by providing flexible, cost-efficient, and full-service PEO and HRO solutions.
Give your clients the tools they need to navigate today’s most complex HR challenges. Contact ExtensisHR’s broker team today.