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HomeMy WebLinkAbouthr-HR-Trends-Report-for-20212021HRTrends Report McLean & Company is a research and advisory firm that provides practical solutions to human resources challenges with executable research, tools, and advice that will have a clear and measurable impact on your business. © 1997-2021 McLean & Company. McLean & Company is a division of Info-Tech Research Group Inc. McLean & Company2021 HR Trends Report2 02 Diversity, equity, and inclusion (DEI) is at the forefront of the conversation 03 HR, thrust into the spotlight 04 Remote work: the office of the future? 05 Digital transformation: accelerated 01 HR in McLean & Company2021 HR Trends Report3 How to read this report This report is based on data gathered from McLean & Company’s 2021 HR Trends Survey of 850 business professionals. The data was gathered in September and October of 2020. It also includes data from McLean & Company’ s 2020 Pandemic Survey.Note: Graph totals may not add up to 100% due to rounding.Highly Effective The percentage of respondents who selected 8, 9, or 10 out of 10 when asked to rate the effectiveness across various parameters. Highly Effective: Association & Relationship Any time an association or relationship is referenced in this report, it refers to a statistically significant result. Graphs or visualizations that show a difference in effectiveness based on certain practices are also only shown if they are statistically significant. These are used to indicate which practices are disproportionately used by the most-effective HR departments.Organizational Size Small: 100 or fewer employees Key terms used throughout this report include:High Performing The percentage of respondents who selected 8, 9, or 10 out of 10 when asked to rate their performance across various parameters.Medium: 101 to 2,000 employees McLean & Company2021 HR Trends Report4 54% 46%50% 33% 17%Senior Leaders Management Individual Contributors Is your workforce unionized?Top seven industries N= 850 (unless otherwise noted)Organization size Role Seniority Location Oceania 8% 8% 9% 9% 11%11%12% 14% Healthcare & Life Sciences Education Professional Services Media, Telecom &… Other GovernmentFinancial Services Manufacturing 59%25% 15%No Partially Yes NorthAmerica Europe Asia AfricaLatin America Middle East 71% 5% 8% 2% 6% 4% 4% Small Medium Large 22%52%26%Characteristics of 2021 survey respondents Voluntary Involuntary 14%9% n=598 n=573 Turnover McLean & Company2021 HR Trends Report5 Key insights Diversity, equity, and inclusion (DEI) is at the forefront of the conversation Creating and sustaining an environment of diversity, equity, and inclusion can’t be achieved with only quick-wins and band-aid solutions.Don’t overlook the importance of deeper, strategic, and ongoing work.DEI is complex and heavily nuanced. Developing a scaled and purposeful DEI strategy is key to uncovering systemic inequities and creating sustainable change. Developing a strategy to move towards a culture of DEI creates a better environment for employees, allowing them to thrive and providing numerous organizational benefits.HR, thrust into the spotlight HR’s role in business continuity planning (BCP) could be what separates the organizations that thrive despite crises from those left behind.Ensure HR has the expertise and resilience needed to contribute effectively to BCP. Being a strategic HR partner is a journey, and results won’t come overnight. It’s never too late to start. Start getting ready for McLean & Company2021 HR Trends Report6 Remote work: the office of the future?Adapt, adjust, succeed. Making structural changes to enable remote work for the mid-term is important even if permanent work-from-home (WFH) isn’t on the horizon for your organization. Remote work caused by the pandemic will continue, so why not adjust to ensure its success?It took a pandemic to show that WFH can work for many more roles than previously thought. Organizations that do not maintain this flexibility going forward will be left behind when it comes to retaining talent.Digital transformation: accelerated Digital transformation is here to stay. Quick fixes and band-aids were enough to survive last year, but long term, proactive action is required to support organizations staying digital and outperforming their peers. When HR’s involvement in selecting and implementing technology to respond to the pandemic went up, so did HR effectiveness (n=421). As more HR technologies become required for organizations, to best leverage them to support digital transformation, HR can’t afford to be left out of the selection and McLean & Company2021 HR Trends Report7 HR in 2021 HR functions have been remarkably resilient in the face of enormous disruption to operating environments, the increased urgency of diversity, equity, and inclusion (DEI) priorities, the role of HR, remote work, and digital transformation. Overall HR headcount and HR to organizational FTE ratio remain similar to the previous year. Recruiting continues to be HR’ s #1 priority, with DEI emerging as a top-five priority.In 2020, having documented strategies played a critical role in improving HR effectiveness, a testament to the value of having strategic plans in place prior to facing a crisis like the COVID -19 pandemic. Perceived HR effectiveness, while still low overall, has gone up year-over-year according to both HR and non-HR professionals. This is likely due to the important role HR played in navigating the disruptions brought on by 2020. However, there is still room for HR McLean & Company2021 HR Trends Report8 the average % of full-time employees in an HR department.Shrinking Expected Change in HR Headcount Current Average Distribution of HR’ s Time Across Activities 71% n= 477 No change Growing n=336 n=478 n=465 Despite the pandemic, HR’s headcount is not expected to decrease in 2021 the average % of HR work that is not done in-house (includingcontractors, vendors, and outsourcers). 20% n= 414 0% 20% 40%60%80%100% 2018 2019 2020 2021 Talent Acquisition Ensuring Compliance With Policies & Laws/ Regulations Strategic HR Planning Employee & Labor Relations Learning & Development Talent Management Engagement & Culture Total Rewards Organizational Development Diversity, Equity, and Inclusion Technology & Operations Other 2021 HR to FTE Ratio by Organization Sizen=436 Small Medium1: 56 1: 97 Large n= 420 1: 31 2% 4% 5% 6% 8% 8% 9% 9% 10%10% McLean & Company2021 HR Trends Report9 Recruiting remains the top priority challenge year- over-year, with DEI breaking into the top five Top priorities of organizations in 2020 Top priorities of organizations in 2021 Recruiting Developing leaders Controlling labor costs and maximizing labor spend Supporting change Providing a great employee experience Facilitating data- driven people decisions Recruiting Controlling labor costs and maximizing labor spend Diversity, equity, and inclusion Developing leaders Providing a great employee experience 0102 03 04 04 06Tie 01 02 03 04 05 Surprisingly, despite the amount of change in the past year, supporting change dropped down to number seven. n=365 N=850 Fostering an environment of diversity, equity, and inclusion was only eighth on McLean & Company2021 HR Trends Report10 HR is less effective in the eyes of non- HR respondents HR Effectiveness45%of HR respondents rate their HR department as highly effective (n=456), a 7% increase since last year (n=473),compared to just 26% of non- HR professionals ( n= 394).- 18% 18% 15% 14% 14% 12% 7% 7% 4% 3%1% 2%6%N=850 difference between HR rating and non-HR’s rating of HR departments highly effective at… Fostering collaboration within HR Fostering a positive labor relations climate Supporting change Providing a great candidate experience Providing a great employee experience Rapidly moving internal employees Developing a business continuity plan Controlling labor costs Recruiting Facilitating data-driven people decisions Enabling innovation Enabling learning & development Developing the organization's leaders Diversity, equity, and inclusion Those who are highly effective at developing and maintaining a business continuity plan and providing a great employee experience have McLean & Company2021 HR Trends Report11 Having documented strategies increases HReffectivenessHighly Effective 43%49% 55%38% 15%% with a specific functional area strategy Organizational Performance Performance goes down when there are no functional area strategies in place. n=413 15%of HR departments have no functional area strategies. n=431 50%of HR departments have an overarching talent strategy. n= 431 n= 425 n=431 66% 61% 56% 52% 52%51%45% 24% 35%31%Talent Acquisition Employee Engagement HR Analytics Diversity, Equity, and Inclusion Learning and Development Has a McLean & Company2021 HR Trends Report12 DEI is at the forefront of the conversation The surge in social action and support for Black Lives Matter, the #MeToo movement, and Indigenous rights has forced organizations to look at how their own practices reflect and perpetuate social inequities and systemic racism. The pandemic surfaced even more challenges around diversity, equity, and inclusion (DEI): childcare, accessibility in a remote world, and wellbeing are all more critical than ever before. HR has an instrumental role in challenging organizational norms and leading the shift towards DEI in the workplace that will help retain the top talent and realize the many benefits of a diverse workforce. This change won’ t happen overnight so there’s no time to waste in getting started –the time to make DEI a McLean & Company2021 HR Trends Report13 Organizations are increasingly focused on creating a diverse, equitable, and inclusive environment 2020 2021 Organizations have put a greater emphasis on DEI in the last year. In 2021, only 6%of organizations say they are not focusing on DEI, compared to 25%in 2020.Many organizations took immediate action this year to implement new practices to help create an environment of DEI. This quick response helped signal to employees and investors that the organization supports DEI and is willing to make changes. 0 10 20 30 40 50 60 Purposefully sourcing diverse groups of candidates Providing inclusion training to managers or employees Tracking and reporting on DEI metrics Creating employee resource groups Purposefully establishing diverse project teams across the organization 25%6%These few organizations that are still not taking action to create an environment of DEI are more likely to be experiencinghighervoluntary turnover.n=415n=439 n=456 n=41520202021 Focusing on increasing diversity through sourcing may seem like an easy fix for organizations, but it requires parallel action to create an inclusive culture. Without that, diverse employees will remain excluded and organizations will struggle to make true progress in DEI. What are organizations doing to create McLean & Company2021 HR Trends Report14 Yet DEI practices with the greatest impact are being overlooked The lack of focus on these critical practices suggests the increased emphasis on DEI has been largely based on speed rather than impact. However, without taking the time and effort to strategically implement the practices that target the organization’s culture of equity and inclusion in addition to diversity, little will change.Insight: Creating and sustaining an environment of DEI can’ t be done with only quick- wins and band-aid solutions. Don’t overlook the importance of deeper, strategic, and ongoing work. Change year-over-year Embedding inclusive behaviors into values or competencies 0%Evaluating inclusive leadership behaviors as part of the performance appraisal process -2%Clearly articulating the link between DEI and organizational goals -1%Identifying and addressing pay gaps (or inequities) for underrepresented groups 3%Structuring interviews to mitigate bias 4%While the previously mentioned practices do not significantly impact organizational or DEI performance, the following practices are associated with higher organizational performance and/or DEI performance.Despite these benefits, the percentage of organizations implementing these practices has barely changed McLean & Company2021 HR Trends Report15 The pandemic has created unique challenges for accessibility and inclusivity Accessibility challenges brought on by the pandemic vary for each employee depending on their individual characteristics and how those intersect ( e.g.socioeconomic status, age, physical ability, neurodiversity). While many organizations rose to the occasion by supporting their employees through challenges resulting from the pandemic, there’s still plenty of room for improvement.If you are not yet offering supports to improve accessibility, by implementing some of these practices you can improve the employee experience and DEI performance at your organization. What is your organization offering to improve accessibility during the pandemic?n=445 Support/resources for employees or candidates in roles that require internet access 51%Training for managers on accommodations or benefits to help adapt to the new working environment 36%Stipendsfor home office expenses 15%Support for employees who are unable to return or fear returning to the workplace due to the pandemic 57%New programs or services to support employees' mental health and wellbeing e.g. Employee Assistance Programs (EAP))59% These offerings are associated with a greater employee experience These offerings are associated McLean & Company2021 HR Trends Report16 Organizations rose to the challenge of expanding supports for parents during the pandemic 2020 2021 Flexible work options Counseling support (e.g. EAP)Holding jobs for parents taking on temporary childcare responsibilities due to COVID-19 restrictions Reduced hours for parents taking on temporary childcare responsibilitiesdueto COVID-19 restrictionsN/A N/A Organizations are helping parents navigate personal and business responsibilities by providing supports such as:Parents experienced a unique set of challenges. Previous arrangements for childcare were disrupted by the closing of schools, daycares, and recreation centers. Remote work is further complicated for parents who now have children at home.The negative impacts on parents are significant.Work-life balance, career progression, and earnings for those taking time off) are all challenges for parents. Furthermore, women are disproportionately impacted,with childcare expectations often falling to them. In the US, nearly 8x more women left the workforce in September 2020 than men1, suggesting they may be disproportionately taking on childcare responsibilities while schools and daycares remain closed or virtual.n=437 Organizations providing these supports are more likely to be providingagreateremployeeexperience.1 “Employment Situation Summary.” U.S. Bureau of Labor Statistics, 06 Nov. 2020, Accessed 23 Nov. 2020. 56 73%45% 62%37% 56% 76% McLean & Company2021 HR Trends Report17 However, organizational DEI practices are often compliance focused and lack leadership commitment Focusing on compliance is a good starting point, but organizations need to go beyond that given the current DEI climate. Insight: While it may help to avoid legal issues, compliance will not, on its own, create an environment of DEI. Furthermore, while isolated, ad hoc initiatives give the impression of “taking action,” they fail to challenge and change embedded norms, processes, and culture across the organization. 40%47%n=352 n=352Don’t neglect the importance of leadership’s commitment to modeling inclusive behavior. This is associated with:n=160 The DEI efforts of more than 2 out of 5 organizations are only focused on compliance and meeting legislated minimum requirements,and initiatives occur only on an ad hoc basis.Fewer than half of organizations have leadership that is committed to modeling inclusive behaviors and champions DEI efforts in the organization.Overall organizational performance Workforce productivity Social and environmental sustainability performance Ability to quickly change to capitalize on new opportunities Ability to generate and McLean & Company2021 HR Trends Report18 If DEI is truly a priority, defining a strategy helps focus efforts and achieve benefits HR effectiveness Workforce productivity DEI performance Social and environmental sustainability performance These organizations risk missing out on the many benefits a DEI strategy provides. Yet only 38% of organizations have a DEI strategy.Developing a scaled and purposeful DEI strategy is key to uncovering systemic inequities and creating sustainable change. Developing a strategy to move towards a culture of DEI creates a better environment for employees, allowing them to thrive and providing numerous organizational benefits.Insight: DEI is complex and heavily nuanced. Having a DEI strategy is associated with greater: n=431 n=165 n=164 McLean & Company2021 HR Trends Report19 What comes next? Actions and Practical ResourcesActions and Practical Resources Create a sustainable DEI strategy for your organization by focusing on employee experiences to uncover and address systemic inequities.Build on your DEI strategy by directing efforts towards embedding inclusion into your culture.Equip managers to adopt inclusive leadership behaviors and create an inclusive environment.Train employees to understand diversity, equity, and inclusion and practice inclusive behaviors with the Foundations of Diversity, Equity, and Inclusion eLearning Module.While the increased attention DEI has received over the past year is promising, creating an environment of DEI does not happen overnight. Sustaining this focus and acting strategically will be key. Start with creating a defined DEI strategy to set the tone and direction for the organization. This will anchor all DEI efforts, ensuring they’re sustained in the long term. Then, focus on incorporating inclusion into your organization’s culture to ensure the planned DEI initiatives succeed and the McLean & Company2021 HR Trends Report20 HR, thrust into the spotlight Over the last decade, organizational priorities and business models have shifted. People have increasingly been acknowledged as the driving force behind value creation, thrusting HR into the spotlight.This has only been accelerated by changes brought on by the pandemic. Employees are expecting more from their organizations, and HR’s role is consequentially more far-reaching, more meaningful, and McLean & Company2021 HR Trends Report21 In the face of unprecedented upheaval, HR's stress levels continue to rise I experience higher levels of stress related to my job as an HR professional today compared to three years ago.”HR must be aware of their limits. While it's not surprising to see increased stress levels in 2020, it's not without consequences. As stress levels increase effectiveness drops, and without the right coping mechanisms, HR risks reaching a breaking point.What is the breaking point?HR stress levels were already increasing in the period prior to the pandemic and recent events have only accelerated that trend. As stress levels rise HR effectiveness falls n= 456 of HR professionals strongly agree that theirstress levels haveincreased. 50%41%50%+ 9% McLean & Company2021 HR Trends Report22 Increased stress is not surprising given HR’s role is more strategic than ever before HR’s new role After years of plateaued involvement in strategy, the upheaval of 2020 has thrust HR into its most strategic role ever. More organizations are acting on their people-first promise and involving HR in strategy. Where that happens, organizations have higher effectiveness in quickly changing to capitalize on new opportunities and are therefore more likely to be resilient in uncertain times. Unfortunately, there are HR teams that are still not involved with strategy: 14% of HR departments in small organizations are not involved,versus 8% of HR departments in all organizations.What comes next?Is this change in partnership solely a reaction to the pandemic and social movements or have organizations finally recognized the impact HR’ s involvement in strategy can have on better preparing for the future?44%report HR as being a partner 8% increase compared to 2020. 1.7x n=745 n=758 When HR is a partner, organizations are more likely to be highly effective at quickly changing to capitalize on new ideas. 0% 10% 20%30%40%50%20172018201920202021n=718n=854n= 710n=790 n=758 How is HR involved in the broader organizational strategy?A partner in planning and executing strategy Asked for input into planning, involved in executing strategy Involved in executing strategy after it is developed Not McLean & Company2021 HR Trends Report23 HR’s role in business continuity planning is key to maintaining organizational performance ina crisis 3%65%2%31%HR is not involved in business continuity planning HR is playing a larger role than before HR is playing a smaller role than before HR is playing the same role as before of HR departments are highly effective at enabling the development and maintenance of a business continuity plan.HR has become a vital part of business continuity planning n=423 As this year has shown us, crises are an inevitable part of organizational life.These low-likelihood, high-impact events are sudden, unpredictable, and temporary. Organizations are using business continuity planning (BCP) to enable operations to resume after a disruption. BCP can no longer be solely about operations when HR’s strategic involvement is vital:42%n=759 Organizations where HR is more effective at enabling the development and maintenance of BCP also havegreater organizational performance.n=732Organizationperformance Insight: HR’s role in BCP could be what separates the organizations that thrive despite crises from those left behind. Ensure HR has the expertise and resilience needed to McLean & Company2021 HR Trends Report24 It’s not too late! To prepare for the next crisis, HR needs to incorporate scenario planning in BCP Scenario planning is a key part of BCP. It involves creating plans for different potential future scenarios. HR departments who created scenario plans more than a year ago are:1.7x 2x The organizations where HR was proactive are seeing the payoff for their efforts now. But that doesn’t mean that it’s too late to start for those who weren’t proactive in the past.HR departments who have started creating scenario plans within the past year are: 1.3x 1.5x Insight:Being a strategic HR partner is a journey, and results won’t come overnight. It’s never too late to start being strategic. Start getting ready for the next crisis now. n=362 n=342 n= 344 n= 33828%36%18%17%When did HR start creating scenario plans?More than a year ago Starting in the next year Started creating within the past year No plans to start scenario planning more likely to have a highly effective HR department more likely to be highly effective at enabling business continuity more likely to be highly effective at enabling business continuity more likely to have a McLean & Company2021 HR Trends Report25 Despite an increased involvement in strategic activities, HR's decision-making power hasn’t changed Insight: There is a disconnect on where short- and long-term HR decision-making authority lies. HR and non-HR must clarify where the decision-making power lies and empower HR to make decisions to ensure that HR is as effective as possible. Where non- HR makes HR decisions, effectiveness goes down.Most HR decisions (both day-to-day and long term) are made by leadership outside of HR.When non-HR executive leadership and management make decisions about HR, both day-to-day and long term, HR effectiveness goes down. Non-HR respondents reported that almost 25% of day-to-day and long- term HR decisions are HR’s responsibility versus HR respondents who reported that 40% of HR decisions fell to them. 30%36% 20%14%Executive leadership Management outside of HR Corporate HR Field HR 53%12% 27%8% n=799 n=801 Responsibility for day-to-day decisions about the workforce Responsibility for long-term decisions about HR programs & HR resource allocation McLean & Company2021 HR Trends Report26 Effective HR decision making has often involved prioritizing organizationaloutcomes 8% 12% 7%8% 21% 4% 15%14%2% 10%Disagree BalancedAgree 7% 13% 7%8% 24% 2% 16%13%2% 9%Disagree Balanced Agree At my organization, HR's priority is expected to be to protect and further the interest of the organization rather than to support employees.”My role as an HR professional requires me to focus entirely on employee needs rather than organizational needs.” n=456 n=455 1-3) 1-3)(8-10) 8-10)( 4-7)4-7)We’re all tired of “HR needs to get a seat at the table,” because HR is already there,but what did it take to get there? It took focusing on organizational outcomes and connecting HR’s strategy to organizational priorities. However, in the past year, the seismic shifts in society have led to more balance between McLean & Company2021 HR Trends Report27 17% 22%61%No change There is a greater focus on organizational needs There is a greater focus on employee needs But the pandemic has changed the way HR balances priorities There has been a shift towards HR balancing employee needs with organizational needs more since the pandemic. n=445 When there was a greater focus on employee needs rather than organizational needs since the pandemic, organizations were: n=426 n=421 Yet 22% of organizations have a greater focus on organizational needs over employee needs.How has the pandemic changed the way HR balances employee needs with organizational needs?1.5x More likely to be high performing in overall organizational performance 1.4x More likely to be high McLean & Company2021 HR Trends Report28 Unsurprisingly, the employee experience improves when the balance is skewed towards employee needs Insight: Employee experience isn’t just fluff –don’t risk losing the benefits of an effective employee experience. A positive employee experience is associated with: Workforce productivity Organizational performance Ability to change quickly Innovation n=834 Organizations who have highly effective employee experiences are 3.8x more likely to disagree that HR prioritizes organizational interests over employee support. n=236 This was magnified by the social upheavals of 2020, where many types of workers, who were previously marginalized,were revealed to play essential roles in keeping society functioning. The lack of total rewards and respect accorded to these employees highlighted the importance of a greater McLean & Company2021 HR Trends Report29 What comes next? Actions and Practical Resources Review best-practice solutions to identify resilience techniques that are most suitable to your organizational culture and employee needs.Proactively prepare the organization’s talent for the risks of tomorrow by uncovering HR initiatives to implement today.Navigate the pandemic with a flexible talent strategy, a practical guide to scenario planning to weather uncertainty.Create a simplified process that addresses both department-wide and individual employee development needs by systematically developing your HR department.As HR stress levels rise, and HR’s role becomes more strategic, HR needs to focus on itself, in addition to focusing on the organization.First, develop personal and team-wide resilience techniques to ensure HR is equipped to manage increasing stress levels. Next, to contribute the most to business continuity planning and strategic planning, HR needs to be prepared to recognize the talent implications for the different possible scenarios and provide strategies to address those implications.Finally, to maximize HR’s contribution to organizational performance, HR will need to clarify where the decision-making power lies for HR-related decisions and balance organizational McLean & Company2021 HR Trends Report30 Remote work: the office of the future?The pandemic and resulting emergency work-from-home measures highlighted how many roles can be performed just as well, if not better, remotely. However, the traditional approach to work is so entrenched many organizations are still resistant to making the shift permanent due to fears of impacts on culture, communication, and innovation. Employees also share mixed feelings. While the increased flexibility has been very beneficial for some, others are struggling with the loss of social connections, suboptimal work environments, and the blurred line between work and personal life.It is not realistic to expect a full return to how and where work was done pre-pandemic. As many organizations continue to offer work-from-home (WFH) options in 2021 and beyond, the conversation around remote work McLean & Company2021 HR Trends Report31 Remote work isn’t going away anytime soon What is your organization's plan for WFH in 2021?n=401 All employees WFH some days All employees WFH full- time No WFH permittedEligible employees WFH full- time36%14%9%5%Eligible employees WFH some days37%As the pandemic continues, many organizations are still reducing onsite work. Though there is no one- size-fits-all solution for WFH, more than 9 out of 10 organizations are planning on implementing or continuing some form McLean & Company2021 HR Trends Report32 A permanent shift to remote work is on the horizon for many While it’s clear remote work isn’t disappearing any time soon, will the changes be permanent? Emergency WFH challenged norms Prior to the pandemic, there were high amounts of skepticism around remote work. Myths, entrenched norms, and inertia have previously curtailed the pursuit of more permanent WFH programs. The emergency WFH measures brought on by the pandemic have challenged this perspective,proving that many roles are capable of being performed remotely. However, some leaders are still resistant There is still a lack of enthusiastic support around the prospect of permanent remote work, with 24% of senior leadership being against it (n=668). One potential cause for this resistance is the belief that the traditional approach to work is the most effective. Yet if employees have been successfully working remotely throughout the pandemic and want to continue, denying them the opportunity to do so permanently without proper justification may be perceived as unfair.Insight: It took a pandemic to show that WFH can work for many more roles than previously thought. Organizations that do not maintain this flexibility going forward will be left behind when it comes to retaining talent. Nearly half of organizations report that 50% or more of their roles are capable of being performed remotely on a permanent basis.n=428 of senior leadership at these organizations are very open to the option of some roles being performed remotely on a permanent McLean & Company2021 HR Trends Report33 Yet many organizations are not making structural changes to enable remote work are not making changes toroles, work, or teams.49%Despite many organizations continuing WFH in 2021, few are making changes to increase suitability of roles, work, or teams for remote work. Many organizations are still stuck in a reactive, short-term mindset, seeing remote work as a measure that simply needs to be waited out. However, this pandemic has changed the WFH landscape so drastically that it is highly unlikely to go back to the way it was before. Insight: Adapt, adjust, succeed.Even if permanent WFH isn’t on the horizon for your organization, making some of these changes for the mid-term will help. Remote work caused by the pandemic will continue, why not adjust to ensure its success?19% 28%12% Changes to core hours 8%Smaller satellite office Flatter structures Project-based structures (e. g. Agile)Smaller teams Organizations looking at making the following McLean & Company2021 HR Trends Report34 57%48%Some organizations kept an eye on the impact of remote work on engagement Keep an eye on the pulse…Over one in three organizations have started or increased the frequency of measuring engagement While engagement increased 13% at the beginning of the pandemic from March to May McLean & Company’s Pandemic Survey Report, 2020; N=16, 615), organizations must continue to monitor it. It is more crucial than ever to keep an eye on engagement as the novelty of remote work wears off. If engagement starts to dip, organizations must be able to catch it early,allowing HR and leaders to intervene and respond to employee needs before it begins to negatively impact performance. More than one in four are still not measuring engagement or are doing so less frequently. or risk negative consequences 56 highly effective at providing a great employee experience 9%These organizations risk negatively impacting their employee experience. Increased frequency Decreased frequency or not measuring n=421 n= 422 Just started measuring No change Not measured Decreased frequency Increasedfrequency 36% 30%7%13%14% How has measurement of employee engagement changed over McLean & Company2021 HR Trends Report35 Engaging new hires should always have been a priority, emergency WFH simply accelerated it Actions organizations have taken to acclimate new hires to organizational culture during the pandemic n=419 In 2020, over two-thirds of organizations conducted online onboarding/orientation McLean & Company’s Pandemic Survey Report, 2020; N=190). Online onboarding challenges, such as lack of social connection and difficulty learning organizational culture, can be overcome by implementing the actions on this slide to acclimate new hires.Still, over one in four organizations aren’t taking any additional actions. These organizations need to proactively look at making these changes and prepare for a more virtual future or risk disengagement and turnover with their new hires. Associated with agreater employeeexperience 30%42% 26%34%Implementing a mentor/buddy system Formalizing cultural norms through training, policies, or other documentation Increasing the number of formal social touchpoints with peers Increasing the amount of interaction new hires have with senior leaders No additional actions taken to McLean & Company2021 HR Trends Report36 The new reality of work demands revisiting your employee value proposition (EVP)An EVP provides many benefits if it is an accurate depiction of the employee experience. As organizations continue to adapt working environments to the pandemic and shift towards remote work, it is important to update the EVP to reflect the new reality.n=371 Not planning to revisit the EVP Recently revisited the EVP ( in the past year)Planning to revisit the EVP in the long term 6 months out)Planning to revisit EVP in the next6 months 29%18%18%35%71% of organizations with EVPs have recently revisited or are planning to revisit their EVP due to recent changes in working environment.Yet 29% are not revisiting their EVPs and risk misrepresenting the organization. This may result in attracting the wrong candidates or hiring people whose expectations won’t be met. Most organizations realize the importance of keeping their McLean & Company2021 HR Trends Report37 What comes next? Actions and Practical Resources Create a planned, integrated, and supported program to sustain WFH in the new normal.Equip managers to effectively manage virtual teams to ensure remote employees are supported.Protect organizational viability in the short and long term by maintaining employee engagement during the COVID-19 pandemic.Develop solutions to adapt your onboarding process to a virtual environment.Attract and retain the right talent by updating or uncovering the organization’s employee value proposition to highlight strengths such as a WFH program.The emergency WFH measures taken at the beginning of the pandemic are not sustainable in the long term. With remote work continuing into 2021 and beyond for many organizations, changes must be made to ensure success.First, organizations must transition existing short-term emergency WFH arrangements into a clearly defined and integrated long-term WFH approach.Next, ensure the approach is supported by keeping an eye on employee engagement and adjusting related programs such as onboarding to suit the new virtual environment.Finally, revisit how the organization positions itself in its employee value proposition and employer brand to ensure it accurately reflects the new way 38McLean & Company2021 HR Trends ReportDigital transformation: accelerated Digital transformation, the investment or adoption of new technology or business models, has been trending for the past few decades. Experts have been predicting widespread digital transformation each year. Who could have imagined that it would take a pandemic to accelerate digital transformation? Last year, our 2020 HR Trends Report found 30% of HR respondents were not taking any action to support digital transformation (n= 419). In 2021, inaction is no longer an option. Digital transformation is here, and if not faced head on, your organization will 39McLean & Company2021 HR Trends ReportQuick fixes have supported digital transformation, but to survive long term HR will need to do more What is HR doing to support digital transformation? 46%38%38%28%26%24%24% 21%21%22% Training on virtual communication and teamwork Supporting change management of digital disruption Providing training on virtual people management Creating a new HR strategy Supporting technologies for digital collaboration Analyzing the employee skills gap Developing employees on new competencies Training employees in specific new skills Equipping leaders to lead in agile environments Nothing n=414 Associated with:Facilitating data-driven decisions Innovation Supporting change Insight:Digital transformation is here to stay. Reactive quick fixes and band-aids were enough to survive 2020, but long term, proactive action is required to support organizations staying digital and 40McLean & Company2021 HR Trends ReportNow is not the time to pause; HR needs to continue supporting digital transformation In 2020, the third most common HR action to support digital transformation was taking no action at all!While the number of HR departments not acting has decreased from 30% to 22%, there has also been a decrease in other HR actions. Most significantly, 8% fewer organizations are creating a new talent strategy. n=414 36% 30%28%22%Creating an HR strategy Taking no action In the disruption of 2020, seeing a decline in long-term actions like creating a talent strategy is not surprising as organizations relied on short-term solutions to address immediate needs. However, long-term actions like analyzing the skills gap and training employees on the new skills will provide even greater benefits: higher performance in innovation, supporting change, and data- driven 41McLean & Company2021 HR Trends ReportSudden digital transformation put competencies to the test 13%significant decrease over 2020 Highly Proficient Year-over-year, we continue to see low proficiency in the competencies of the future. These competencies can enable the implementation of new technologies and processes –critical to navigating uncertainty.Change management decreased significantly since last year.While some organizations may have considered themselves highly proficient during normal times, when faced with great uncertainty the proficiency in change management required is much higher than anticipated.Change fatigue is another possible cause of decreased proficiency. HR needs to combat organizational change fatigue with a change sustainment plan and help improve proficiency levels of change management to reap the benefits. Digital Literacy Resilience Inclusion 25% 26% 29%25%25%Not asked in 2020 Change Management Emotional Intelligence Agile Scrum Methodology Design Thinking 21% 15% 18% 16% 16% 13% 14% 2021 2020 Average Proficiency 2021 Innovation Data- driven decision making Employee experience n=418 High change management proficiency is correlated with: 13%6. 1 6.3 6. 0 5. 1 5. 0 5. 6 5. 42McLean & Company2021 HR Trends ReportEmployee-centric competencies drive performance Design Thinking n=400 From user experience to employee experience, design thinking is about designing moments that matter and is correlated with:Innovation Developing the organization’s leaders Insight: Digital transformation competencies that enable a deeper understanding of individual employee needs (e.g. inclusion, design thinking, emotional intelligence) have the greatest impact on performance. Drive performance by focusing the organization on employee-centric competencies. Inclusion n=429 Ensuring accountability by embedding inclusion into work practices, behaviors, and values throughout the organization is correlated with:Emotional Intelligence n=427 Helping leaders become better leaders by getting them to understand how uncertain times can have an impact on employees is correlated with: Innovation Employee experience Developing the organization’s leaders Fostering an environment of DEI Employee experience Developing the 43McLean & Company2021 HR Trends ReportAllocating time dedicated to learning Supporting the creation of individual development plans (IDP) Implementing a continuous learning competency Encouraging leaders to role model this behavior Significantly investing in L&D Enabling employee access to knowledge sharing platforms Providing formal coaching to leaders Providing individual flexible continuous education funds Not a focus20% 40%60%0%Continuous learning is foundational to a digitally mature workforce To improve proficiency on the competencies of the future, a focus on continuous learning is required. In fact, not focusing on enabling continuous learning is negatively correlated with proficiency on all the competencies of the future (n=406). Unfortunately, HR actions to enable continuous learning have decreased across the board year-over-year, except for actions that put the onus on employees for continuous learning (see *on chart). HR shouldn’t discount other actions, which have benefits such as:Greater effectiveness at enabling learning & development (n=437).Greater effectiveness at developing the organization’s leaders ( n=435). 2020 n=456 2021 n=445 What is HR doing to enable continuous learning in your organization?Insight: Ultimately, continuous learning is what's going to help organizations be successful in this new world of work. It’ s time for HR to redouble its efforts on learning and development so the benefits of continuous learning 44McLean & Company2021 HR Trends ReportHR technology is now mainstream – leverage it to support digital transformation of HR Departments With Investment or Planned Investment in HR Technology n=438 HR technology expands again: Certain HR technologies have become staples (e.g. HRIS) and investment and planned investment in other technologies is rising.The shift to remote work has accelerated the investment in many technologies year-over- year, with the greatest increases occurring in technologies directly connected to working remotely:HR’s involvement in HR technology is critical: Despite being the main users of the technology and ultimately facilitating its adoption and use, one in five HR teams were not involved in the selection and rollout of technology to respond to the pandemic (n=421).Insight: Where HR’s involvement in selecting and implementing technology to respond to the pandemic went up, so did HR effectiveness (n=421). As more HR technologies become required for organizations, to best leverage them to support digital transformation, HR can’t afford to be left out of the selection and implementation process. 43%23%increase year-over- year in learning technology systems increase year- over-year in 45McLean & Company2021 HR Trends ReportWhat comes next?Actions and Practical Resources Use ready-to-deploy tools to develop key competencies of the future like design thinking, change management, inclusion, and resilience.Take a proven approach to driving HR effectiveness through learning by developing a holistic L& D strategy and adopting continuous learning.Effectively prepare for the changing business landscape by embedding an iterative process to identify the future skills needed and the gap with current skills in the workforce to execute organizational and talent strategies.Adopt a holistic perspective of HR systems. Evaluate the current state of your organization’s HRIS, understand pain points, and identify ideal processes prior to choosing a solution.With remote work stretching out into the future and digital transformation here to stay, HR will need to take a more proactive approach to address impacts of the accelerated move online. First, identify and prioritize the competencies that will best support digital transformation and drive performance, such as change management, emotional intelligence, and inclusion. Identify the competencies that fit best for your organization by analyzing the skills gap.Next, improve continuous learning to enhance the effectiveness of leadership development initiatives and increase workforce proficiencies in the prioritized competencies.Finally, support the technologies that drive digital collaboration and productivity as these are the HR actions that will best McLean & Company2021 HR Trends Report46 Leverage feedback to drive performance Optimize the HR Department for Success HR Stakeholder Management Survey Align HR initiatives with business strategy and stakeholder needs.HR Management & Governance Improve HR’s core functions and drive project success. Improve Employee Experience and HR Processes New Hire Survey Ensure recruiting and onboarding programs are effective by surveying new employees.Employee Engagement Move beyond measuring job satisfaction with a comprehensive view of engagement. McLean Employee Experience Monitor Evolve to leader-driven engagement with a real- time dashboard and results. Employee Exit Survey Understand why people leave the organization in order to proactively retain top talent.360 Degree Feedback Empower employees with a holistic view of their performance to prioritize development.DEI Diagnostic: Leverage DEI data to inform your evidence-based DEI strategy and initiatives Build an evidence -based HR strategy while gathering insights throughout the employee lifecycle. View our diagnostic McLean & Company2021 HR Trends Report47 McLean & Company is a research and advisory firm providing practical solutions to human resources challenges via executable research, tools, and advice that have a clear and measurable impact on your business.Our research team uses a rigorous research process to identify and hone best practices; create practical tools, templates, and policies; and supply clients with the insight and guidance of our subject matter experts. McLean & Company applies this proven research approach to both human resources and company management teams, creating complete solutions that supply the tools you need to get each project done right.McLean & Company analysts bring real-world experience to the table and apply their knowledge to solving the challenges faced by our clients on a daily basis. This process is informed by the participation of a client base that includes over 30,000 members and by an evolving client-driven research agenda.McLean & Company is a division of Info- Tech Research Group Inc. London, ON Corporate Headquarters 345 Ridout Street North London, Ontario, N6A 2N8 Toronto, ON 888 Yonge Street Toronto, Ontario, M4W 2J2 Las Vegas, NV 3960 Howard Hughes Parkway,Suite 500 Las Vegas, NV, USA, 89169 Sydney, Australia Level 4, 20 Hunter Street Sydney, NSW, Australia 2060 North America: 1-877-281-0480 International: + 1-519-