Three HR megatrends for 2022

3 minute read
Ethical leadership, the rise of the grey collar worker and agile compliance: these are the three megatrends human capital management group UKG predicts will shape the industry in the year ahead
Sian Harrington

Three HR megatrends for 2022

Leaders  can no longer hope to scale shareholder value without scaling shared values. Mission and margin, profit and principle, success and significance are now inextricably linked.

This, says global provider of human capital management and workforce management solutions UKG, is why ethical leadership is one of three HR megatrends it predicts will be key for organisation success in 2022.

Issues like diversity, equity, inclusion and belonging (DEI&B), climate change and artificial intelligence (AI) mean “we are in the midst of an ethical crisis that is confronting leaders with vexing issues, profound dilemmas, and painful trade-offs. People are exhausted and looking to leaders for answers, guidance, action and hope,” UKG says.

1. Ethical leadership

Ethical leadership is no longer a nice thing to have. It’s a matter of survival. Those companies that demonstrate authentic and consistent commitment and action on transparency, trust, listening to employees and employee autonomy and ownership will remain viable in the longer term. Others, says UKG, will fail as environmental, social and corporate governance (ESG) pressures increase alongside unmet employee desires.

“Valuing the relationships and voices of employees, trusting them in the new virtual and remote world of work, putting people before profits, and over-communicating through challenging times are the first few ingredients in the recipe for ethical success,” says Jarik Conrad, vice president of human insights and HCM advisory at UKG. “Organisations that lean into these pillars, continue to invest in fostering a culture of moral leadership and commit to actionable change will continue to succeed in the new year.”

UKG believes an ESG reckoning is coming. In areas such as DEI, climate change, AI and automation and mental health token programs and philanthropic side projects have been used more for marketing and maximising short-term profits than really moving the needle on change. Organisations will eventually be held accountable and required to perform mandatory, audited and transparent reporting on ESG metrics, it says.

2. Compliance agility

The best organisations, however, do not wait for reporting such as ESG to become mandatory. Instead they pay attention to industry trends and public sentiment and understand that the long- term penalties of being viewed as laggards in the field are far worse than any short-term fines. They get ahead of the curve – and in many cases move faster than governments. 

This compliance agility, as UKG terms it, improves business outcomes and enables employee agency. “For decades, HR professionals have treated compliance as a set, fixed force, something that occasionally went through updates but was primarily stagnant. Today, due to the continuing fluidity of the workforce and increasing rates of innovation, change and regulation, we need to completely rethink our approach to compliance,” says UKG.

“Reactive compliance is avoiding the stick, not chasing a carrot; it’s a constant race to stay ahead of fines and regulations. But innovative, proactive organisations are already ahead of the game. Agile compliance means going beyond simply complying to shaping the trends themselves, delighting both customers and employees in the process.”

3. Rise of the grey-collar worker

We all talk about the so-called white-collar and blue-collar workers, implying that if you are not one you are the other. But there are many jobs that do not fit neatly into either area. These are the grey-collar workers, who often find themselves at the intersection of technology and service with hints of both white- and blue-collar aspects. Many are what we would class ‘essential’ or ‘key’ workers: police, teachers and government services workers. And, having a combination of both physical and technical skills, these jobs are difficult to fully automate. Therefore they are expected to be one of the fastest-growing demographics after the pandemic. Of the Bureau of Labor Statistics’ top 20 fastest-growing occupations, 13 fall under the umbrella of grey-collar. 

However, the pandemic together with an ageing workforce and general labour shortage has resulted in an exodus in many grey-collar industries. As a result, grey-collar sectors are facing a hiring boom and a critical talent shortage. Grey-collar workers have always been a crucial subset of our workforce, but we have often failed to take their unique needs and considerations into account in traditional workforce discussions, says UKG.

“They’ve been hiding in plain sight, but their agency, importance, prevalence and influence are growing. For too long we’ve focused our investments on retention and development of white-collar workers, regarding blue- and grey-collar workers as replaceable. But business leaders have learned the hard way that nobody is replaceable, as these are also fields where most employers are finding it extremely challenging to hire,” it says.

UKG suggests employers should rethink their approach to grey-collar workers:
• Rebrand these jobs to clearly define grey-collar workers as highly skilled, highly paid and in demand. Entice younger workers and those from other industries into these fields.

• Rethink degree requirements for certain roles. Researchers have concluded that 6.2 million jobs are currently at risk of degree inflation, including many that fall under the grey-collar umbrella. A resulting talent shortage could reach 85 million people and $8.5 trillion in unrealised annual revenue by 2030

•           Rethink standard interview processes. Make digital applications intuitive and attractive to younger candidates and include skills-based assessments.

•           Continually reskill grey-collar workers who often work in industries in which digitisation is accelerating rapidly. Consider apprenticeships, internal gig economies, learning and development opportunities and intrapreneurship. 

Published 1 December 2021
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