While 2021 wasn't easy for anyone, many HR teams faced up to some of the biggest challenges of their careers. In this article, we'll look at the top three challenges of 2021, the workplace forecast for 2022, and three competencies that will help today's HR teams prepare for the future.

Top 3 HR Challenges of 2021

There was no shortage of difficulties for HR to tackle in 2021, but fair workplace practices, employee wellness, and talent optimization topped the list.

Diversity, equity, and inclusion

Most workplaces acted to fast-track diversity, equity, and inclusion (DEI) activities in 2021. A WorldatWork study found that 83% of organizations acted on DEI initiatives in 2021, and almost one-third of those were taking action for the first time.

There are both moral and business reasons for supporting DEI. A Glassdoor survey found that 76% of employees and job seekers consider a diverse workforce to be an important factor when evaluating companies and job offers, and 37% would not apply to a job at a company where employee satisfaction ratings are different among ethnic or racial groups. Similarly, a McKinsey study found that employers were perceived as non-inclusive, they risked losing 39% of job applicants.

Employee wellness

In year two of the pandemic, levels of stress among employees were understandably high, and HR teams took note. The Future Workplace 2021 HR Sentiment survey found that 68% of senior HR leaders rated employee well-being and mental health as a top priority, and Wellable research showed that 37% of employers planned to increase their investment in health and well-being programs, with 90% planning to invest more in employee mental health. Overall, corporate wellness is expected to become an $87.3B industry by 2026.

Talent optimization

Turnover hit a historical high this year, layoffs were the lowest in 30 years, and according to McKinsey, 40% of employees say they are contemplating leaving their current job in the next 3-6 months. Many HR professionals had to get creative about how they sourced, retained, developed, and deployed talent, including using competencies to assess and develop talent on a more granular level and creating cross-functional tiger teams that brought diverse talents together in powerful ways to accomplish specific goals.

What Will 2022 Look Like for HR?

The year ahead will share many of the same challenges as the year we leave behind. DEI and employee wellness will continue to top the priority list. HR professionals will also be called on to cope with continued fallout from the "Great Reshuffle," along with the challenges of hybrid or remote work, flexible scheduling, and ongoing employee burnout.

But the most complex issue facing HR in 2022 will be the lack of talent and a growing need to optimize existing talent. Focusing on competencies instead of degrees, diplomas, and past experiences will help HR teams improve the way they identify, redeploy, and develop the talent they need from internal sources. Investing in programs and resources that support assessments, upskilling, reskilling, internal mobility, and career pathing will help organizations fill talent gaps, retain employees longer, and make the most of their talents.

Three Essential Competencies for HR in 2022

If the past year has taught talent leaders anything, it's that the future is never entirely predictable. But no matter what 2022 brings, these competencies will be critical in helping HR teams manage scarce talent more effectively.

Change management

The change management competency involves conducting change readiness and change impact analyses, preparing communication and employee engagement plans, and developing strategies to address organizational change and related change management issues.

The pace of cultural, operational, and technological change continues to accelerate. As these forces reshape the organization, HR must take the lead in helping the workforce navigate those changes and understand how their knowledge, skills, and abilities support organizational adaptability and resilience.

Visioning and alignment

The visioning and alignment competency involves actively shaping and communicating the organizational vision and values to ensure understanding and alignment throughout the organization.

HR leaders are living in a time when visioning is critical. They are facing new and unexpected challenges daily as the workforce continues to evolve and respond to new pressures. Talent managers need to understand where the organization is going so that they can develop their talent in alignment with those needs.

Acting with empathy and compassion

Acting with empathy and compassion competency involves genuinely seeking to understand and respect others’ perspectives and emotions, and encouraging a culture of compassion, empathy, and support within and beyond the organization.

The past two years have shown us that workers are humans with complex lives and competing priorities. They need well-rounded support to help them bring their best selves to work, and they are looking to HR to provide it. Not only is it the right thing to do for employees, but it's also the right thing to do for the organization.

According to Gartner, when employers support employees with their life experience, they see a 20% increase in the number of employees reporting better mental and physical health and a 21% increase in the number of high performers.

Prepare for the Year Ahead

Prepare yourself and your team for success in 2022 with online training from the Competency Academy at HRSG. Learn the essentials of competency-based management or enhance your competency practice with advanced courses in the ongoing series.