As published on Medium.com
In today’s market, human resources (HR) professionals have never been more important. And their jobs have never been more difficult.
According to the most recent data, U.S. GDP growth continues to miss market expectations, while inflation remains high, and the employment picture worsens. Given all these factors, the U.S. economy is at serious risk of a recession and entering a period of stagflation (worst case scenario).
As the dollar loses value, consumers reduce spending, the global energy outlook remains uncertain, and company margins shrink across most industries, management teams continue to cut costs wherever they can in an attempt to weather this storm and boost their respective bottom lines.
Unfortunately, this has led to mass layoffs, especially in traditionally “high-growth” and “discretionary” sectors, such as tech, luxury goods, autos, and entertainment. In tech alone, layoffs to date — 170,000 — have already outpaced 2022’s previous full-year record.
This leaves the economy between a rock and a hard place. Recent estimates put the number of available jobs at roughly 2 for every 1 job seeker. However, many of the individuals finding themselves newly unemployed are not a match for the industries desperate for new workers (e.g., “Education and Health Services,” Leisure and Hospitality,” or “Trade and Transportation”).
Interestingly, this puts companies on both ends of this equation in a similar position. Companies cutting costs and shrinking their workforces must drive efficiency from the employees they retain, while making sure the increased workload and reallocation of resources doesn’t push even more to voluntarily exit.
Similarly, companies that need workers must realize that the labor shortage in their industry has been a going concern for several years now and ensure they keep the workers they do have, while boosting employee efficiency to fill any gaps.
Based on this analysis, HR professionals are indispensable in today’s economy, and they have a unique challenge in front of them. Coupled with the economic backdrop they must address as it affects their own employers, expectations of both current employees and new job seekers have dramatically changed over the past several years.
In addition to record-high salary expectations, workers (especially younger millennials and Gen Z) are prioritizing flexibility (hybrid and remote work), a transparent and supportive culture, as well as meaningful opportunities for growth and development when evaluating employers. And with over half of young employees willing to change jobs if their expectations aren’t met, a significant onus is on businesses to evolve their workplaces… and evolve quickly.
HR departments are the glue that keeps nearly every operation together, and HR professionals are increasingly being tasked with the job of implementing the changes that will attract new talent and keep existing workforces intact. To do this, industry best practices must innovate faster than the overall market to stay ahead of the curve, and bold, creative strategies must be implemented to satisfy employers and employees alike.
Gone are the days of the standard, benchmark raise at the end of each year or being in the office every day, rain or shine. Successful companies are replacing traditional bureaucratic hierarchies with collaborative teams that encourage input and feedback from all members. Employees aren’t willing to just “pay their dues” in the hopes of an eventual promotion — they want learning and growth opportunities, and they want them now. And if we’ve learned anything over the past several years or in the current market, throwing more money at the problem simply isn’t a sustainable strategy.
Instead, peer recognition programs, noncash performance incentives, and rewards for achieving new learning or qualification milestones are all ways to deliver employees the empowerment and transparency they seek. Today’s workers need to feel “seen” by supervisors and tangibly supported in their career journeys. Thankfully, these strategies are a win-win for employers, too. Higher-performing, better qualified, and more satisfied employees are both more efficient and more likely to stick around.
In celebration of International HR Week, managers should take a step back and appreciate the difficulty of the past several years for their HR departments, understand the current issues they face, and support their HR employees in the same new and creative ways that these professionals are attempting to do with the rest of the workforce.