Predictions for 2022: Everything Is About To Change
Well, it’s time to talk about predictions for 2022, and the number one theme is change.
And in a sense, everything is about to change.
If you think back about where we are, it has been 14 years since the 2008 financial crisis, and we’ve been through digital transformation, economic hyper-growth, a stock market boom, extremely low interest rates, and an enormous availability of capital. We’ve witnessed huge investments in the tech industry, the emergence of cryptocurrency and blockchain, the birth of 5G telecommunications, widespread use of electric vehicles and charging stations, and mobile devices more powerful than supercomputers.
Personally, we have video cameras on every device and our homes have become movie studios. On the downside, we’ve lived through disruptions to our political system, threats to our sense of inclusion and belonging, a growing problem of homelessness, and a sense that income inequality may be worse than ever (three billionaires flew into space for fun this year.)
On the positive side, we’re seeing an increase in the standard of living as flexible work and new employment models go mainstream, and wages are definitely rising. Companies are discovering that paying people more does not reduce profits. Even penny-pinching companies like Amazon.com are raising wages.
What’s going to happen in 2022? Let me mention four big trends.
First, It’s clear to me that we’re going to be in a very tight labor market.
Today there are close to 14 million jobs open in the United States and there could be 20 million open in 2022. It’s going to be very hard to hire and as we discuss in the Predictions Report, you will be focusing your recruiting efforts on internal hiring, redeployment of people inside the company, upskilling, and what I call “human-centered recruiting.” You’ll be hiring people based on skills and fit, not just experience.
The labor market will change. The massive number of opportunities will draw people into the labor market, driving the labor participation rate up. And that means you’ll have a more diverse range of candidates to source from. That doesn’t mean hiring will be easy, because people feel very empowered.
Remember also that training is more important than ever. New EMSI research shows that even for essential workers, over the last two years there was a 40% increase in the share of postings offering on-the-job training. You will need to hire for fit and capability, then train people as they arrive. (A 330% increase in supply chain jobs that require no experience at all.)
Second, we are about to witness the unleashing of the most incredible technology I’ve ever seen. Not only do we have AI under the covers of every HR too, but Talent Intelligence systems are also getting incredibly good at matching, predicting, and selecting people. We have virtual reality and augmented reality tools, avatars, microlearning, and an entire industry of online AI-powered coaching.
For employees, we now have amazing new tools for learning discovery and learning experience, employee experience platforms for designing a better workplace, employee survey and listening tools that can pick up sentiment and open feedback, and all sorts of organizational analysis tools to find out where people are unhappy (or unproductive). To say nothing of an endless number of tools for wellbeing.
As an HR professional or an HR leader or a talent leader, you have to pay attention to technology, and I haven’t even mentioned self-service technology, speech recognition tools, and digital adoption tools that every employee and call center agent use. So you’re going to be very involved in selecting and implementing new technology.
The third big change is a new conversation about culture. I believe we’re going to have a stock market correction, a series of interest rate rises, and a lot of angst about inflation. For me, we’ve been in an inflationary period for a long time. I’ve always felt that the Bureau of Labor Statistics data about inflation is incorrect. Where I live in California, we’ve been an inflationary economy for a decade. Housing prices are at a ridiculously high level and so is everything else.
And thanks to the media, inflation is becoming something people are talking about a lot. What inflation does is reduce people’s sense of security. It gives you this feeling that everything you base your decisions on is suddenly changing under your feet. It’s like living on shifting sand … something you wanted to buy yesterday became more expensive today, and maybe you can’t buy it tomorrow. And that creates a sense of uncertainty added to the continuing lagging problem of the pandemic.
So we’re going to see a work and business environment where employees look for predictability. They’re looking for safety. They’re looking for security. They’re looking for a company they can trust.
And there’s even more. Employees want to work for a company that cares about global climate change, environmental issues, and sustainability. They’re looking for a company that cares about its people. So the issues of culture, trust, and employment brand are going to be huge in 2022. And the stress of the pandemic is not over: new research by Mercer points out that almost 40% of workers are using mental health or coaching benefits. (The Global Wellness Institute believes workplace mental health will grow at 9.8% annually over the next five years.)
Our recruiting research points this out, by the way. In Q1 we launch our new research on talent acquisition and you’re going to see that employment brand is the biggest predictor of hiring great people. And recruiting is the most important thing you do. If you don’t get the right people into the company, it doesn’t matter how well your management team can operate. So I think 2022 will be a big year of talking about culture, trust, human-centered leadership, and your employment brand.
The fourth thing that I want to highlight is the changed role of HR.
We’ve been through two years of the pandemic and it feels like an eternity. And all the issues we face, whether they be talent mobility or capability academies or skills models or recruiting or leadership development, are not new. They’ve been around forever.
But something big did change: the role of HR has been elevated. Nobody’s having any problems with a seat at the table.
Most of you have been deeply involved in remote work, hybrid work, back to work, safe work, and critical policies at the senior executive level over the last two years. But behind the scenes, your operations and structure of HR have not changed fast enough.
So the fourth thing in 2022 is to take a serious and sober look at the HR function, the skills and capabilities of your HR team, and the level of development you’re doing for each of the members of the HR organization. And this includes the business partners, the specialists, the call center agents, the consultants, the designers, the tech people, and the staff. And it’s time to think about the HR function as a professional services organization: one with consultants, product managers, service delivery, and technology all in one. And you’ll see that you have a lot of interesting opportunities ahead.
We learned a lot during the pandemic. We learned that it’s okay to change jobs. It’s okay to work on cross-functional projects. It’s okay to implement digital tools quickly. We don’t have to wait years and years to turn new things on. People learn how to use them pretty quickly. So apply all those disciplines to HR, and I think you’ll see 2022 will be pretty cool.
Please read our research report. It is designed as a guide to help you decide what you want to do and prioritize your investments. I will be speaking on these topics quite a bit over the next few weeks and certainly into the new year.
Have a fantastic holiday. And we look forward to working with you in 2022. We will be here to guide you along the way.