STATE OF HR

REPORT 2021
Find out how thought leaders and industry experts are
assessing the year that was and the year that will be

SPONSORED BY:

HREXCHANGENETWORK.COM
Introduction
Human resources leaders have experienced a reckoning
since the start of the pandemic in 2020. To begin, HR
suddenly became a front-and-center player in just about
every organization. The burdens upon their shoulders were
large. They were charged with helping to immediately
transition people from in-office to remote work, figure out
the best tech for these new work structures, determine
how to do more with less, handle layoffs and furloughs and
uncertainty, tend to the emotional needs of the workforce,
and keep employees engaged and productive under the
worst of circumstances.
In 2021, those tall orders kept coming. In the last year, HR
leaders had to navigate vaccine mandates, COVID safety
protocols, and the rise of breakthrough cases. They had
to deal with a raging debate about returning to the office
or staying remote. When many organizations opted for a
middle-of-the-road, hybrid solution, HR leaders were the
ones to determine how to make that kind of workforce
function efficiently and productively.
Most importantly, HR leaders are struggling to win the talent
wars as they face a historic labor shortage. Employees and
recruits are demanding higher wages, better benefits, more
respect, more meaningful work, and more empathy from
their employers. Unlike any other time, employees have the
power. They are also asking for their bosses to address their
mental health and wellness with both increased benefits
and programs.
State of HR Report 2021
2
In addition, they want their employers to go beyond paying
lip service and start making inroads to issues that matter to
them like sustainability and diversity, equity, and inclusion
(DEI). And C-suite executives are not always on the same
wavelength, so HR leaders have to balance the needs of
both groups.
HR Exchange Network recently conducted a survey of 433
senior HR leaders to assess the state of Human Resources
at the end of 2021. At mid-year, HR leaders similarly had
taken stock of the state of affairs. At that time, employee
engagement was the biggest challenge. Quickly, recruitment
and retention became the number one priority.
A record one in four workers quit their jobs in 2021 as of
October, according to data from Visier, a people analytics
firm. Visier pointed out that the number of quitters was
still rising. In addition, young people, who are notorious for
quitting often as they try to find the best fit, were not alone
this year. Employers aged 30 to 50 have also increased their
resignation rates by more than 38%.
Respondents to the HR Exchange Network State of HR 2021
Survey expressed great concern about the labor shortage,
and provided insight into the top priorities of leaders going
into 2022. What we learned is that most people agree the
winners for talent and business will be those who embrace
change rather than fight it, listen to their employees rather
than talk over them, and lead with both their head and heart.
About the Respondents 3

HR Exchange Network surveyed 433 experts and leaders from a wide range of organizations around the world. Consider the
breakdown by job title, job function, company size, industry, and region.

Job Title
9% 10%

8%
Assistant/Analyst/Student C-Level
18%

Specialist/Business Partner SVP/VP

Coordinator/Manager 29% Director/Head

25%

Job Function
Analytics 2%
Compensation & Benefits 3%
Compliance 2%
Employee Engagement/Experience 4%
Diversity 1%
Human Resources 41%
Learning & Development 15%
Recruitment and Talent Acquisition 6%
Safety 1%
Shared Services 2%
Talent Management 3%
Technology/Other/Vendor/Solution Provider 19%
0% Respondents (%) 45%

Company Size
1-500 1,001-5,000 10,000+

49% 12% 17% 5% 17%

501-1,000 5,001-10,000

State of HR Report 2021

 About the Respondents 4

Region

North America 52% 7% Europe

5% Middle East

Africa 8% 23% Asia-Pacific

South America/Central America 5%

Industry

Automotive 2%
Education 12%
Financial Services/Banking/Insurance 6%
Government 7%
Healthcare/Life Sciences 11%
Manufacturing 9%
Retail/CPG 4%
Technology/Software 14%
Telecom/Media 4%
Travel/Tourism/Hospitality 4%
Utilities/Oil/Gas/Energy 5%
Other 21%

0% Respondents (%) 25%

State of HR Report 2021

New Challenges 5

In this third survey during the pandemic, HR leaders are focusing on finding solutions related to the labor shortage and
retaining talent. Mental health and wellbeing, remote work, and budget cuts are still top of mind, too.

The Biggest Problems for HR Leaders

Labor shortage 16%

Retaining talent 15%
Mental health and wellbeing 13%
Shifting to remote work 12%
Budget cuts 12%
Employee safety 6%
Closing skills gap 5%
Layoffs and furloughs 4%
Company culture 3%
Internal communication 3%
Agility 2%
Diversity, equity, and inclusion (DEI) 2%
Implementing new technology 2%
Other 4%

0% Respondents (%) 20%

Since the mid-year report, the labor shortage has grown.
Some thought unemployment benefits would run out and
people would run back to work. But that was not the case.
The pandemic gave people a chance to rethink their life,
including their career. For many, it was time to move on and
look for more professional satisfaction and work-life balance.
“The shortage is the key issue,” says Paul Pittman, the
Founder and President of the Human Well. “There are so
many more opportunities and new types of roles that interest
people. We’ve broadened their horizons.”
Pittman believes this shift in culture will have significant
ramifications on Human Resources but that employees will
eventually lose their grip on the hiring process. After all, these
things tend to be cyclical and capitalism favors business over
the individual.
Still, HR leaders have to understand the difference between
Baby Boomers, who are entering retirement, and younger
people from Generations Y and Z. They see their jobs as a
transaction to finance their lifestyle, says Pittman.
“The leaders will be 10 or 15 years younger,” he adds. “We’ve
been putting people in leadership who know less about the
job and more about empathy.”
In the short-term, employers will turn to untapped groups to
fill in gaps. For example, those on the autism spectrum bring
diversity and often can be taught a myriad of skills. High
school graduates might also get jobs that previously were
only for college graduates. Immigration and automation are
other tools to get through the shortage, says Pittman. But
he warns that no matter how leaders choose to address the
problem, they have to retool themselves and embrace all the
changes afoot or they will find themselves redundant.

State of HR Report 2021

Prioritizing Mental Health and Wellness 6

Seizing the moment is easier said than done, however. Change is tough for people, and HR leaders are facing another major
challenge, burnout. In fact, the majority of respondents said burnout was the greatest consequence of the pandemic.

Consequences of the Pandemic

19%
Burnout 18%
Changing culture
20% 17%
Loss of engagement
Changing business priorities 13%
Respondents (%)
Increased pressure on leadership
8% 8%
Market uncertainty 7%
Lost jobs 5%
Failure to address employee safety 3%
2%
Loss of trust
Other 0%

Challenges to Employee Engagement

28% 28%
Blurring of work and personal life 30%
Burnout
Respondents (%)

Communication
Leadership not engaging employees directly
12%
Too many distractions
10% 9% 7%
Lack of career pathing
3% 3%
Roles shifting
Other 0%

Certain industries have experienced more burnout than
others. Think of healthcare workers at the height of the
pandemic and as spikes continue to come and go. As
more Americans quit their jobs, those who stay in their roles
inevitably end up taking on more work. This can easily lead
to high levels of stress and the potential for burnout.
“Employees feel out of control because, to a large degree,
they are,” writes Erika Lance, chief human resources officer
for KnowBe4, in an article for Entrepreneur.com. “They
have no control over the virus, or over government and
employer mandates that threaten to impact both their lives
and livelihoods. And they don’t know what to expect next
because, in truth, no one knows what to expect next.”
Employers are doing something about burnout and mental
health and wellness in general. Respondents said employee
assistant programs (66%), training in resiliency and stress
management (46%), and health insurance that includes
mental health coverage (44%) are among the solutions
they are offering employees. Other efforts include access to
wellness apps, mental health days, and virtual therapy.

State of HR Report 2021

Hybrid Is the New Normal 7

In some ways, HR leaders are providing a sense of structure
and security. They have developed some norms that will
carry over into the post-pandemic workplace. Flexible work
hours, hybrid workplaces, and online learning top the list of
pandemic policies that HR leaders say they will keep even
after the pandemic is a memory.
A little less than 80% of C-level executives believe
businesses will benefit from increased flexibility, according
to Adecco. The report’s writers concluded that the world
is “ready for hybrid working” because 51% of employees
who responded called for an in-office model, whereas 49%
wanted remote work.
The biggest priority for respondents to the HR Exchange
Network survey, in fact, is employee engagement, followed
by flexible work culture and hybrid workplaces. And flexible
work hours and hybrid workplaces are the big winners
when it comes to the pandemic policies that employers are
planning to keep well into the future.

Top Priorities

Employee experience and engagement 30%

Flexible work culture 14%
Hybrid workplaces 12%
Focus on organizational agility 11%
Developing future preparedness 9%
Employee wellness 8%
Creation of safe work environments 6%
Analysis of HR effectiveness 5%
Greater investment in technology 3%
Collaboration with IT 3%
Other 3%
0% Respondents (%) 30%

State of HR Report 2021

 Hybrid Is the New Normal 8

Remote work – whether on its own or as part of a hybrid And I think it’s going to take a lot of experimentation as to
workplace – is here to stay. HR leaders have to make it their what are the best communication methods.”
business to help connect teams that could be working from
home in their slippers, in different geographies, and time Some companies are leaving it up to individual departments
zones. This phenomenon was already happening before the to decide whether to return to the office or not and how to
pandemic, but now there is no turning back. What is changing schedule hybrid work. The New York Times cited LinkedIn,
is that there are more people returning to an office, too. which scrapped its plans to return to the office when the
Delta variant began wreaking havoc in the United States.
In October, the number of employed people working The company put the onus on individual managers to decide
remotely dropped to 11%, which was the lowest since from where their teams worked. LinkedIn was one of 60 major
the pandemic began, according to the Bureau of Labor companies allowing some form of flexibility to employees,
Statistics (BLS). With more people demanding flexibility, according to The Times.
however, hybrid work is becoming the likely model for
workplaces. It comes with its own set of challenges. But HR leaders are stressing about productivity monitoring
and employee engagement of their remote workers.
“I’m actually quite worried about how we’re going to
navigate to a hybrid environment. It’s going to get a lot more
complicated,” said GoFundMe CEO Tim Cadogan, according
to Time. “The situation where everyone has got one screen,
in a sense, it’s been a great leveler. Everyone’s got a screen,
everyone’s on the same playing field. Going to a world where
there are three people in the room, two people on a call. It’s
going to be pretty difficult trying to find the right balance.

Pandemic Policies to Remain

62% 56% 43% 37% 30% 23%

Flexible Hybrid Online Wellness Mental health Increased face time

work hours workplace learning programs coaching with leadership

16% 14% 10% 4% 3%

Increased access Companywide Child care/ None of Other

to benefits days off education support the above

State of HR Report 2021

 Hybrid Is the New Normal 9

Challenges of Remote Work

25% 23% 23%

Productivity monitoring

Respondents (%)
Employee engagement
Cybersecurity
13%
Sense of belonging for employees
10%
Time management 9% 9%
6%
Performance management 5%
Employee wellness
2%
Online training
Other 0%

Only 8% of respondents said they would be working remotely
full time. A whopping 42% said they plan to be back in the
office a few days per week in 2022. Being in the office makes
safety an issue and puts COVID-19 vaccinations front and
center. The overwhelming majority of respondents or 47%
said they will enforce vaccine mandates at their offices.
About 24% of respondents will have no vaccine mandate
and no penalties for the unvaccinated, and about 19%
were undecided. About 6% said they will not require a
vaccine but will penalize the unvaccinated without firing
them. In those instances, some employers require frequent
testing and may refuse to pay for sick leave should an
employee contract COVID-19.

Vaccines make going back inside an office safer. But removing

remote options is a risk, too. It could drive some employees
to quit. After all, many people moved during the pandemic
and their lifestyles changed. During the labor shortage, the
message about a need for more flexibility has been clear.

Still, companies are gearing up to anticipate attrition. Most of

the respondents to the HR Exchange survey said their budgets
will either remain the same or increase in the next year, and
their priorities for investment have a story to tell. Data is going
to be a driving force in Human Resources moving forward.
Indeed, 107 or about 31% of respondents said they will be
investing in analytics in the next six to 12 months.

Although some experts have said that HR is late to the data

analytics game, they are recognizing how data can be used
to identify those with the potential for promotion or those
thinking about quitting, for example. The point is that HR
leaders are looking to have forecasting at their fingertips.
Perhaps, they are trying to avoid the surprises that have
caught them off guard during the pandemic.

State of HR Report 2021

 Hybrid Is the New Normal 10

The top 5 priorities for investment

1 2 3 4 5

Analytics HR Management Learning Management Performance Remote Work

System System Management Technology

Recognizing that some form of remote work is inevitable in this new world, employers are going to hang onto certain
technology in which they invested when transitioning from in-office to remote work.

Technology for Keeps

Team chats

67%
Video chats

59%
VR/AR

4%
Social media

26%
Wellness apps

26%
Project management tools

27%
Virtual collaboration tools

46%
Virtual collaboration tools

7%

0% Respondents (%) 70%

State of HR Report 2021

Shift in Culture 11

Changing employee expectations and shifts in the talent pool So, there is great pressure to improve company culture to
top the list of happenings that respondents believe will have keep people on the team. Helping them to collaborate,
the biggest impact on Human Resources in 2022. This new regardless of where they are, is an important task.
normal with the employees having more leverage is changing
the culture of workplaces. The majority of respondents, 37%,
expect their employees to be less engaged in 2022.

Priorities to Improve Culture

Facilitate collaboration 50%

Increase transparency 45%
Provide greater flexibility and autonomy 38%
Transform training and development efforts 35%
Create new leadership development pathways 29%
Invest in new DEI initiatives 13%
Other 7%
0% Respondents (%) 50%

State of HR Report 2021

 Shift in Culture
DEI Efforts Expected in 2022
Create a dialogue about inequity 25%
Conduct surveys about DEI
perception v. reality
Ensure equity in pay
Respondents (%)
Unconscious bias training
Provide DEI metrics transparently
Have a chief diversity officer
Other
0%
One of the ways companies have been improving culture is
by increasing diversity. These concerted efforts are a must
because prevailing research indicates that diversity on
your team translates to better business outcomes. Having
a team that represents society is also the right thing to do.
However, many are still determining what DEI efforts have
the most impact.
As the Black Lives Matter movement gained ground the
world over, employers focused on what they could do to
support better understanding and influence societal change.
Women are leaving the workforce in droves to the detriment
of businesses, so there is an effort to win them back. Diversity
of thought is a priority across the board.
Orly Lynn, Global Vice President, Head of Diversity, Equity,
and Inclusion at Contentsquare, says her organization
State of HR Report 2021
12
23% 23%
13%
10%
9% 9%
5%
and others are addressing the positive effects of change
management beyond performance.
“In 2022 I see HR professionals, not just at Contentsquare but
across organizations, taking on very strategic approaches
from a growth, transformation, and culture perspective...
From a DEI standpoint, Contentsquare continues to cultivate
a workplace that is inclusive, where respect in the workplace
and a sense of belonging are our core. As we evolve our
DEI strategy, we are taking steps to continue bringing
awareness to inclusion, equity and diversity, and engaging our
employees in a scaleable and consistent way,” says Lynn.
Organizations are working to determine the best ways to find
harmony in their diverse teams and take advantage of all
the associated benefits. Not surprisingly, creating a dialogue
is a preferred way to address DEI.
The Future
Clearly, HR leaders, along with everyone else, have to
adapt to transformational change. It’s no easy task, but
those who are up for it can win the talent war during this
unprecedented labor shortage. Hybrid workplaces are going
to be the norm, and getting used to them is going to take
time and lots of communication.
Dealing with burnout is going to be a priority, and helping
employee’s maintain mental health and wellness will remain
an important part of HR moving forward. Building a culture
of achievement, inclusion, and empathy with a dash of
flexibility will be a must. Motivating employee development
and upskilling are top priorities for respondents of the survey.
It means that companies recognize they have to prepare
their workforce for what’s coming, whatever that might be.
“I remember my early roles in the personnel department. HR
as we know it today was an administrative function. We were
responsible for completing forms, hiring employees, and the
most senior roles were held by operations executives,” says
Resources
Four Things We Learned About the Resignation Wave – and
What to Do Next (Visier)
https://www.visier.com/blog/trends/four-things-we-learned-
about-the-resignation-wave-and-what-to-do-next/
A record 4.4 million people quit in September as Great
Resignation shows no signs of stopping (CNBC)
https://www.cnbc.com/2021/11/12/a-record-4point4-million-
people-quit-jobs-in-september-great-resignation.html
How to Stamp Out Employee Burnout (Entrepreneur.com)
https://www.entrepreneur.com/article/387358
Resetting Normal: Defining a New Era of Work (Adecco Group)
https://www.adeccogroup.com/future-of-work/latest-
research/reset-normal/
State of HR Report 2021
13
Eric Torigian, Vice President and Assistant General Manager
of Global Human Resources at Akebono Brake Corporation.
“Over the past 30 years that has transformed, and HR
is now seen as a true strategic partner. While HR took a
central role during the COVID pandemic, I believe that we
are at an inflection point. HR was thrust to the forefront
of leadership as we shutdown offices, established work-
from-home practices, supported remote work, and now
facilitating the orderly return. It will be critical for us to take
this newfound responsibility and do something meaningful.
The real measure will be what HR is able to accomplish over
the next 18 months.”
Clearly, leaders in Human Resources have their work cut
out for them. HR leaders said that changing employee
expectations will have the biggest impact in 2022. Certainly,
the end of 2021 points to that being true. Employees, not to
mention recruits, are in the driver’s seat. Employers who get
on board will arrive at their destination.
Remote Work Is Fine. The Real Thing Scaring CEOs? Hybrid
Work (Time)
https://time.com/6117090/tim-cadogan-gofundme-ceo-
interview/
Bureau of Labor Statistics
https://www.bls.gov/opub/mlr/2020/article/ability-to-
work-from-home.htm
The Worst of Both Worlds: Zooming from the Office (The New
York Times)
https://www.nytimes.com/2021/11/16/business/return-to-
office-hybrid-work.html
 Q&A with Oracle
Cara Capretta
Vice President – HCM Transformation Practice for Oracle
Cara Capretta, Vice President – HCM
Transformation Practice for Oracle, has more than
25 years of experience in the HR space. She is a
recognized speaker and thought leader in the field
of talent management. She is regularly featured
at Argyle, Evanta, Conference Board, and HR Tech
Conference, as well as Oracle events. Capretta
leads a team of former HR executives who are
evangelists for HR transformation and share HR best
practices with Oracle clients in North America.
The labor shortage and retention of top talent are the
biggest challenges facing employers today. Employee
expectations and the nature of the market as organizations
continue to confront the challenges associated with the
pandemic are rapidly changing. Organizations have
to quickly adapt and adjust strategies. What are some
solutions for businesses trying to recruit and retain talent
amid this evolution?
Recruiting efforts have become far more experiential and
social in nature. Candidates care more about the culture
of the company and alignment to their values. A boring job
description won’t cut it. Organizations are doing a better
job of “telling their story” to entice candidates. Candidates
are looking for community in an organization. Can they
easily find others who are like them or care about the same
causes? Transparency into diversity and continual progress in
diversity efforts have become mission critical.
Some organizations have decided to throw money at
recruiting efforts. The trucking industry is offering drivers
$10,000 sign-on bonuses to stay competitive. Hourly
employment like quick service food and grocery stores are
offering $500 to $1,000 sign-on bonuses for new hires.
The real ROI sits with retention. It is expensive and time
consuming to hire and onboard new talent. Therefore,
State of HR Report 2021
14
retention efforts need to improve. Many organizations are
hyper focused on career mobility. Some are calling it an
“open talent marketplace”, “internal marketplace” or good
old-fashioned career development.
One of the lowest scored items on most engagement surveys
is “Is your promotion and career path clear to you?” If it’s not
clear, people will look elsewhere and ultimately leave. Most
research says about 75% of employees want opportunity for
career growth. Therefore, we need to do more.
Organizations are turning to AI to help employees match
their skills and experiences to other opportunities in the
organization. Employees can’t depend on their boss for their
next career move, especially in big organizations. It needs to
be easier to find a job on the inside of your organization than
it is on the outside.
The culture of a company needs to adjust to make this
happen. Leaders need to be willing to let go of their people
to make cross-functional moves. It’s much better to lose
talent to yourself than a competitor.
Among the top priorities of employers is employee
engagement and productivity. If organizations remain
all-remote or hybrid workplaces, which many expect
will be the case, how do you suggest businesses improve
employee engagement, so that employees can be
more productive?
Most companies are surveying employees to get feedback
on the future of work. The pandemic created A-HA
moments for leaders and organizations regarding the
productivity of remote work. Many companies suggest they
will be identifying intermittent required work onsite for key
project, planning, innovation, etc., but will be embracing
remote work for the unforeseeable future. However, as the
“Great Resignation” continues, it will be important for new
employees to meet their colleagues to develop relationships,
build trust, and form community. We have to find ways to still
have fun and to eliminate Zoom fatigue.
 Q&A with Oracle 15

Remote work isn’t going anywhere. Even if people end up
heading into the office a few days per week, they will likely
do some of their work exclusively online. Every organization
has to be ready to return to a remote workplace in case of
emergency. What would you say is the biggest lesson about
maintaining a remote or hybrid workplace? Why?
The biggest lesson has to be that productivity did not drop
during the pandemic. In fact, most studies indicate people
are working more hours and are more productive because
drive time, get ready time, etc. decreased significantly. Many
workers in big cities gained four hours of their life back a day!
Despite the many challenges of the pandemic (stress, loss
of work, anxiety, mental health), working from home allowed
many people to be “present” with their family, whether
sharing meals or attending activities they normally missed,
etc. In addition, many people took up new wellness routines -
sales of Peloton and Mirror spiked.
After more than 19 months since the pandemic turned
lives upside down, burnout has become a major problem
for employees. HR leaders are looking for ways to take off
the pressure and address the wellbeing of individuals and
the organization. What are some innovative solutions for
affecting change and addressing burnout?
Many CHROs I’ve talked to have “pushed” employees to use
their PTO. Some even changed their PTO policies to make
sure employees were getting the “down time” they needed.
Many benefits packages are increasing access to “tele-heath”
solutions that are focused on mental health resources because
access is not evenly distributed, especially in rural areas.
Broadcast this as an aspect of your company culture. “We
will invest in you”. This is a great recruiting tool that will
resonate especially with anyone who has been downsized,
left the workforce for a while or who has been in the same
job/company for a long time and not current.
What do you see around the corner? What do you think will be
the biggest challenge and solution for employers in the next
year? In other words, what might we be talking about then?
Recruiting efficiency. Recruiters are stressed and
overwhelmed trying to find talent. We have to keep finding
ways to make it as easy as possible for them to process
candidates before they lose them to another opportunity.
I also think there will continue to be a lot of focus on culture.
The Great Resignation has all ages and all tenures of people
leaving their companies. Those cultures will change with
their departure. Longer tenured leadership is predictive of
slowness in change.
On the flip side, the culture of companies with lots of new
hires will change.
Customer Support – Turnover has the potential to impact
customer satisfaction. New employees will have a learning
curve. Clients will be losing many of the account execs/reps
they are used to working with. We will need to keep an eye
on customer temperature.
Onboarding will need to be refined and easily accessible.

The skills gap is real. Businesses are having a hard time hiring
people with the skills fit for the future (even the near future).
Data analytics, cybersecurity, blockchain, AI, and more are
among the specialty skills that few possess and many will
need or already need. As a result, even before the pandemic,
businesses were looking for ways to reskill and upskill
employees. Now, job applicants are looking to get hired by
companies that are investing in them and their career growth.
What’s your advice for companies aiming to enhance learning
and development and use L&D programs as a recruiting tool?

State of HR Report 2021

About Oracle 16

Part of Oracle Cloud Applications, Oracle Cloud

HCM enables HR professionals to make work
more human by improving the entire workplace
experience. Oracle provides organizations a
complete solution connecting every human
resource process from hire to retire—including
global HR, talent management, workforce
management, and payroll. It’s also the most Learn more at www.oracle.com/hcm
connected solution across the enterprise, with one
cloud unifying HCM across finance, supply chain,
and customer experience.

State of HR Report 2021

Contributors 17

Eric Torigian
Orly Lynn
Vice President and Assistant
Global Vice President, Head of Diversity,
General Manager of Global Human
Equity, and Inclusion at Contentsquare
Resources at Akebono Brake
Corporation

Paul Pittman
Founder and President of
the Human Well

About the HR HR Exchange

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State of HR Report 2021