SHRM Research: HR Gets Mixed Report Card for 2021 Performance

​HR departments in the U.S. received passing grades for their overall 2021 workplace performance—mostly B's and C's. A majority of workers agreed their organizations did a good job dealing with the COVID-19 pandemic and other health care issues, according to the Society for Human Resource Management's (SHRM's) 2021-2022 State of the Workplace report.

Findings are based on a survey conducted with 1,737 HR professionals in the U.S. in December 2021, who were asked to rate how U.S. organizations performed on key workplace issues in 2021 and what they saw as key issues for 2022. A separate survey was conducted with 642 U.S. workers in December.

Rating their organization's performance during 2021 from among 24 areas, workers and HR professionals said their organizations were especially effective at:

1. Navigating COVID-19's continued impact on their workforce and safety practices.
2. Providing affordable, comprehensive health care coverage.
3. Adjusting to the administration's policy changes.

"Each of the three areas are COVID-related," said Mark Smith, director, HR Thought Leadership Research at SHRM. He noted both employees and HR professionals agreed that "managing the various aspects of COVID were big successes for organizations in 2021."

Labor Shortages Play a Role

HR professionals said their three biggest hiring challenges were a lack of well-qualified candidates, noncompetitive compensation and limited work flexibility.

It was clear, according to the survey, that the lack of qualified applicants was the greatest challenge on the recruiting side. While labor shortages were a major issue across the board, they were more deeply felt by those with in-person (87 percent) and hybrid (83 percent) workforces than those with primarily remote (75 percent) workers. 

"These differences may reflect the trend of workers seeking more flexibility in their work arrangements amid COVID-19 effects," said SHRM researcher Katie Merlini, Ph.D., "and the desires of many to prioritize their personal lives over their employer. Organizations without remote options—or potentially adequate remote options—are likely feeling the brunt of these worker desires."

A record number of employees quitting their jobs in 2021 added to HR's hiring challenge. Most of those exits happened at large employers, according to HR professionals responding to SHRM's survey—53 percent at large organizations reported increasing quit rates versus 26 percent at small organizations.

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The findings from HR professionals also showed that primarily remote organizations differed from in-person and hybrid workplaces in some areas.

In-person

Those working at fully in-person organizations were more likely to report the following recruitment challenges:

• Lack of well-qualified applicants.
• Limited to no flexibility in work.

HR professionals at primarily in-person organizations were more likely to indicate labor shortages as a concern but were less likely to indicate diversity, equity and inclusion as a concern than those at primarily remote or hybrid workplaces.

Remote

Employers with a primarily remote workforce received better ratings from HR professionals than those with a mostly in-house or hybrid workforce at finding, recruiting and retaining people with the skills organizations want, supporting caregivers' needs, providing fair and competitive pay for new employees, and maintaining employee morale.

HR professionals at remote organizations had greater effectiveness ratings than those at in-person organizations for:

• Finding and recruiting talent with the necessary skills.
• Maintaining employee morale and engagement.
• Retaining top talent.

Employer Size a Factor

HR professionals at small employers were more likely than those at large ones to give their organizations high marks for:

• Providing fair and competitive compensation to new hires.
• Supporting the needs of employees with caregiving responsibilities.
• Retaining top talent.
• Maintaining employee morale and engagement.
• Using freelance or gig workers.

An organization's size also seemed to influence HR professionals' self-evaluation. Large organizations appeared to be pushing their HR departments harder, with more professionals at bigger employers reporting they are working too hard and without enough HR staff.

"Smaller organizations are likely more easily able to adjust to individual employee needs and environmental changes—they often have less bureaucracy," Merlini noted. "And, if under a certain size, are subject to fewer regulations" and the resulting repercussions of employment-related decisions. 

Larger organizations, she pointed out, have more people to manage; more policies to implement or modify; and more compliance issues, such as government mandates.

Plans for 2022

Moving into 2022, the vast majority of HR professionals—regardless of workforce size—
report that their organizations plan to:

• Train people managers on their roles in supporting the organization's talent management strategy—82 percent.
  
• Hire more employees—78 percent.
• Improve their people managers' soft skills, such as empathy, compassion and communication—77 percent.

Only 13 percent of HR professionals said their organization will transition more of its workforce to full-time remote work in 2022.