From the great resignation to HR transformation: navigating the new landscape of work

Jason Celino, Director, Equity Research Analyst, KeyBanc Capital Markets, May 2022

<p>From the great resignation to HR transformation: navigating the new landscape of work</p>

In the wake of the COVID-19 pandemic, labor shortages and intense competition for talent created by “The Great Resignation” have challenged companies across industries and geographic regions. After a record number of workers voluntarily quit their jobs in 2021, business owners must now work harder than ever to recruit—and retain—the talent necessary to keep their operations running smoothly.

KeyBanc Capital Markets (KBCM) Director and Equity Research Analyst Jason Celino moderated a panel of C-suite executives in the HR technology space at the 2022 KBCM Emerging Technology Summit to discuss The Great Resignation and its implications for businesses. Adam Clayton, CFO, Proliant; Scott Dussault, CFO, Workhuman; Vivek Khanna, Chief Client Partner, Neeyamo; and Josh Peirez, CEO, Sterling Check, shared salient insights on loyalty, workplace culture, employees’ evolving expectations and their predictions and advice for navigating the new landscape of work.

 

Redefining loyalty in the workplace

Until recently, businesses could provide annual pay raises and periodically recognize their people for their hard work – and then count on them to stay with their employers for many years. But today, the labor market has shifted. Workers are loyal first and foremost to their own interests, and their commitments to their jobs can change quickly if their needs are not being met. “Loyalty is a two-way street,” says Khanna. “Employers need to be loyal to workers and sensitive to their needs if they expect loyalty in return.” Peirez agrees that the days of employees spending their entire careers at one or two organizations are gone. Where he once hesitated to interview candidates who had gaps on their resumes or had left jobs after less than a year, these days he is “thrilled to find someone who’s been with the same employer for 10 months.”

 

Dussault adds that in a market where 38% of employees are looking for a new job (according to research by Workhuman), companies looking to retain talent need to invest in employees’ well-being, prioritize diversity and inclusion and offer flexibility. “Regardless of when the pandemic ends, we’re not going back to 2019,” he notes. “Employees are not going back into the office from 9:00 a.m. to 5:00 p.m. Monday through Friday.” The panelists agreed that in today’s competitive and dynamic talent market, developing a strong and positive company culture is one of the main keys to cultivating a loyal workforce.

 

Creating a culture that prioritizes flexibility

The pandemic forced thousands of companies to embrace remote or hybrid work, and demand among employees for these flexible working models remains high, even as offices reopen. “Employees will want some time in the office because they miss the interaction with their colleagues, but they want it on their own terms—not the employer’s,” says Peirez.

 

As companies move forward with more flexible work models, they need to rethink their culture accordingly. Spontaneous interactions, impromptu coffee meetings and organic opportunities for learning and mentorship are much less likely to happen in a distributed or remote workforce, so management needs to be more thoughtful and deliberate about creating professional development opportunities – especially for junior staff. On the bright side, remote work can help level the playing field for employees from underrepresented groups who may not have felt included in a traditional office environment. A remote setting drives parity – everyone in the organization must actively build relationships and seek out opportunities for mentorship and professional development.

 

Finally, Clayton notes that while employees working remotely or with flexible schedules often claim to be more productive, that’s not always the case. To maintain productivity in a partially or fully remote workforce, leaders need to demonstrate buy-in for the policy and create a strong culture of teamwork and accountability regardless of when and where work is performed.

 

Satisfying employees’ evolving expectations

Beyond flexible work arrangements and a supportive company culture, employees’ expectations are evolving quickly. In particular, younger generations are looking for intangible benefits, beyond a paycheck and health insurance. Dussault points out that millennials and members of Gen Z currently make up more than half of the U.S. workforce, and that percentage will increase in the coming years. These employees seek to derive a sense of meaning and purpose from work, and many will prioritize working for companies whose missions resonate with their own values. For instance, Dussault recalls interacting with a young candidate at a previous job who turned down an interview opportunity due to a lack of diversity among the company’s board of directors.

 

Peirez notes that issues like corporate social responsibility and diversity, equity and inclusion have moved to the forefront of conversations about work, which empowers employees to talk about them more openly. “They probably always thought about it, but it wasn’t okay to say anything. Now, it’s more than okay – it’s expected that workers will voice those things.”

 

The panelists also articulated a shift in employee expectations around communication and feedback in the workplace. “Consistent, clear, open communication is the new normal,” says Dussault. Employees don’t want to wait until their annual review in February to hear feedback on a project they completed the previous June. Rather, Clayton says, companies need to evaluate employees early and often and share the value they deliver to the organization. He suggests that even a daily two-minute email check-in from a manager goes a long way toward keeping workers engaged.

 

Looking beyond the Great Resignation

When it comes to the implications of the Great Resignation and the future of the workplace, the experts on KeyBanc Capital Markets' panel pointed to major transformations within companies, and particularly for their HR organizations. Khanna says that the world is undergoing a “distinct shift in how work is going to happen, and companies that adapt will have fewer challenges than those that resist change.” Clayton predicts that as companies learn how to navigate the “new normal” and make adjustments to their operations accordingly, the Great Resignation (and the uncertainty it has wrought for businesses) will begin to subside.

 

According to Peirez, the Great Resignation will transform the HR function, requiring professionals to become more tech-savvy, more aware of their employees’ experiences, and better equipped to recruit and retain top performers. He also predicts that expertise in behavioral science will become a requirement for CHROs and their teams. Lastly, Dussault predicts that we are on the cusp of a “huge HR tech investment cycle” as the discipline navigates a digital transformation and invests in tools that leverage artificial intelligence and automation to support a more distributed, tech-driven workforce.

 

The Great Resignation highlights how the pandemic accelerated workplace trends that were already underway. As businesses respond to both short-term changes and long-term shifts, many are turning to technology to help them better manage their organizations’ evolving needs. To learn more about opportunities for investors in this space, contact your KeyBanc Capital Markets investment banker at key.com/experts.

 

To learn more about attending one of our conferences, email the Corporate Access team.

 

About the 2022 Emerging Technology Summit

The 2022 Emerging Technology Summit attendees included 800+ institutional investors, 115+ private equity/venture capital and corporate development investors, 38 public companies and 110 private companies. The agenda included 68 Fireside Chats/Presentations, 10 thematic panels and 5 Keynotes.

This article is for general information purposes only and does not consider the specific investment objectives, financial situation, and particular needs of any individual person or entity.

KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp® and its subsidiaries, KeyBanc Capital Markets Inc., Member FINRA/SIPC, and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and its licensed securities representatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A.

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