The 2022 Workplace Trends That Business Leaders Must Address

January 31, 2022

Contributor: Brian Kropp

Executives will have to contend with unfairness in the employee experience, COVID-19 vaccinations, the war for talent and employee well-being.

In short:

  • With continuing changes around hybrid, annual compensation and societal issues, work will continue to be volatile in 2022.
  • We’ve identified the top trends that will shape the workplace in the year ahead.
  • Leaders across the organization should be mindful of and get out ahead of these trends if they wish to retain employees, maintain business continuity and achieve strong performance. 

In 2021, many people expected the world to return to “normal,” including employees going back to the office. In fact, work in 2021 was more volatile than anyone could have predicted, with new COVID-19 variants, major divisions around vaccination, a massive war for talent and quit rates reaching an all-time high.

Volatility will continue to increase in 2022 amid continuing changes around hybrid work, annual compensation and societal issues — and these five trends that will shape the workplace.

Watch now: 11 Trends That Will Shape Work in 2022 and Beyond

No. 1: Fairness and equity will be the defining issues for organizations.

Debates that have fairness at the core have become flashpoints in society. According to our analysis of S&P 500 earnings calls, the frequency with which CEOs talk about issues of equity, fairness and inclusion has increased by 658% since 2018. Questions include:

  • Who has access to flexible work, even within the same organization?
  • Should organizations adjust compensation for employees who move to locations with a lower cost of living?
  • As new employees command a compensation premium, is it fair to pay them significantly more than their established peers?
  • With companies offering new, targeted investments for specific segments of their workforce (e.g. additional financial resources to support employees with children), what should other employees receive in-kind?

In 2022, executives need to address how they are managing fairness and equity across the increasingly varied employee experience. In fact, this is the No. 1 priority for HR executives this year. 

No. 2: Despite a strong push from the Biden administration, a significant number of employers will not adopt a vaccine mandate and instead will rely on testing.

In January 2021, our benchmarking survey revealed less than 2% of companies were planning to implement a COVID-19 vaccine mandate. That number steadily increased throughout the year before plateauing at the end of 2021 at less than 50%. Even with the rise of the Omicron variant, 2022 will not see a significant increase in the number of companies putting a mandate in place. Instead, concerns around a vaccine mandate connected to mass turnover, court battles and personal liberty will lead roughly half of large employers to maintain a testing option in order to comply with the Biden administration’s rules.

Learn more: The Future of Work Reinvented

Trend No.3

No. 3: To compete in the war for talent among knowledge workers, some companies will shorten the work week rather than increase pay.

Gartner research reveals that in the U.S., 2021 salary increases averaged more than 4%, compared to a historical norm of 2%. However, when we also consider inflation, real wages have declined. 

Rather than trying to win the war for talent by increasing compensation, some employers will reduce the number of hours employees work to justify keeping compensation flat. This gives less liquid employers a better chance to compete with organizations that offer higher overall compensation but don’t offer reduced hours.

No. 4: Employee turnover will continue to increase as hybrid and remote work become the norm for knowledge workers.

Flexibility around how, where and when people work is no longer a differentiator; it’s table stakes. Employers that don’t offer flexibility will continue to see increased turnover as employees move to roles and companies that offer a value proposition that better aligns with their desires. 

Unfortunately for many organizations, increasing flexibility will not slow turnover in today’s tight labor market. Employees who work in hybrid or fully remote capacities have fewer friends at work, and thus, weaker social and emotional connections with their colleagues, which makes it easier for them to quit their jobs. Plus, hybrid and remote work will expand the pool of potential employers as the impact of geography decreases. The Great Resignation will shift to the “Sustained Resignation.” 

No. 5: Managerial tasks will be automated, creating space for managers to build more human relationships with their employees.

The manager-employee relationship has become more important than ever. For hybrid and remote workers, managers are the primary connection to their employer and play a significant role in their employee experience. Managers are also the first line in surfacing and elevating fairness concerns, and they can be the difference between highly public walkouts and co-created solutions to employee concerns. 

At the same time, HR tech vendors have been creating products that replace a number of repeatable managerial tasks, such as scheduling, approving expense reports and monitoring direct reports’ completion of tasks. The next generation of technology will start to provide performance feedback and support employees in building peer-to-peer connections, for example.

With this growth in automation, companies will be faced with a choice: Decrease the number of managers or change the expectations of what it means to be a manager.

For six more trends we predict will shape work in 2022 and beyond, click here.

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