MainStreet Macro: What’s in and what’s out
November 15, 2021 | 5 min
ADPRI kicked off 2021 with data that showed a global workforce in flux. Three in four workers in our survey said they had changed, or planned to change, how or where they live.
Since then, we’ve seen tremendous upheaval in the labor market. In the U.S., companies are scrambling to hire and job openings are near record highs. But workers who quit in record numbers have been slow to return, and the labor market is still 5 million people smaller than it was before the pandemic.
Employers have been forced to get creative to keep up with evolving worker demands. They’ve invested in automation, raised wages, adopted flexible work arrangements, and revamped benefits.
Some of our old ways of doing business proved ineffective during the pandemic. Today, there’s a new focus on health, safety, and worker well-being, increased attention to employee engagement, and a renewed commitment to diversity, equity, and inclusion.
Here’s the cool part: There’s a wealth of new data to mine. In 2022, data will be more important than ever for employers navigating the new, dynamic workforce and evolving business landscape.
With data in mind, here’s what’s in and what’s out for workforce trends in the coming year.
In: Trust and verification
You know that boss who always seems to be looking over your shoulder? What about the walk of shame, leaving work before 5 p.m. in a dash to pick up the kids, catch an exercise class, or — heaven forbid — meet a friend for happy hour? If you’ve been there, 2022 is for you.
An ADP survey of small and mid-sized U.S. employers found that two in three have hybrid work models. Most companies now rely on employees to manage their time and workload autonomously.
Employees seem to be embracing this new-found independence. 79% of hybrid workers said they felt more connected to their teams.
Data helps companies identify what matters most for the bottom line, and it’s usually not compulsory facetime in the workplace. It’s people and how they perform. (See you at the next happy hour.)
Out: Static measures of workplace culture
In: Dynamic indicators of employee sentiment
The wider availability of hybrid work, increased trust between managers and workers, and new reliance on data are just three aspects of corporate culture that shifted during the pandemic.
Group lunches, holiday parties, and team-building all went virtual (or at least tried to). Water-cooler chit chat gave way to instant messaging and more formal team web meetings. With workers at home, even some of the most buttoned-down offices had to accept yoga pants and slippers as a form of business attire.
With coronavirus infections waning, a return to work is shaping up. But we won’t necessarily be clocking in for the old 40 hours a week. Even for work that can’t be done remotely — and most jobs fall in this category — on-site health protocols also have had an impact.
Employee sentiment about their jobs and corporate culture have taken on greater significance as companies struggle to find and retain people. As a labor economist, I typically focus on employment and wage changes as the most important indicators. But how workers feel about their jobs also has become very important.
Dynamic data can help companies manage this change by monitoring employee sentiment, including connection, resilience, and engagement. At ADPRI, my friend Marcus Buckingham and his team have developed those employee metrics, which you can find here, here, and here.
Out: One-size-fits-all HR policies
In: HR flexibility informed by real-time data
Regulation can be challenging for companies of all sizes, but it’s particularly hard on small employers that don’t have the capital or economies of scale to easily shoulder new compliance burdens.
I saw this first hand as a government economist for a financial regulator. While almost all companies would balk at the cost of new regulation, small employers frequently were at a particular disadvantage.
ADP’s HR Survey Series with HR Outsourcing found that nearly 20 percent of small U.S. companies currently face compliance and regulation challenges. That’s likely to increase.
Real-time data is helping executives navigate regulatory change, cut costs and enhance the benefits of new rules. HR strategy that’s responsive to regulatory change can drive better business outcomes.
Labor is having a moment. It is central to the post-pandemic growth story.
Yes, technology and innovation are important. But a big lesson from the tremendous upheaval of the past two years is that people power performance.
Quality data can connect technology and people to make work better. That’s what’s in for 2022.