Following a summer of booming travel, conferences, and events, employees are relieved to finally reconnect in person. Yet for companies, change seems unrelenting. The plans they’ve put in place to attract and retain their next-gen workforce are still very much evolving—from identifying a return to office model that’s right for the business to mitigating trends like burnout, attrition, and “quiet quitting.”
The latest conversation permeating the C-suite? Accelerate category leadership while bracing for economic change.
To remain competitive and overcome these challenges, executives must be prepared for anything. If the lessons of 2020 taught us anything, it’s that navigating uncertainty can’t be done alone—there’s power in numbers. That’s the ethos behind CPOHQ, a community of 2,000+ Chief People Officers (CPOs) that come together regularly to share winning playbooks, pressure-test new strategies, and write the future of work.
In this guide, we’ll explore what’s top of mind for these people leaders today.
1. Retention takes a toll as CPOs struggle to keep employees engaged
We are undoubtedly in a confusing job market that regularly blurs the lines between low unemployment, mass layoffs, and continued attrition. Employers are looking for new ways to keep up with millennials and Gen Z, the generations that make up the majority of today’s workforce, but their traditional approaches aren’t cutting it.
Meanwhile, employment hasn’t just surpassed pre-pandemic levels but is now at a historic, all-time high. Despite global fears of a potential recession (more on that later), it’s still very much a candidate’s market. And candidates aren’t just looking to expand the size of their wallets—they’re getting their cherry-pick of roles at workplaces that balance performance expectations with candidate needs.
Perhaps that’s why 62% of software company CPOs and executives reported an annualized attrition rate of 16% or higher this June—already 3% higher than what LinkedIn reported during the so-called height of the Great Resignation from 2021 to 2022. All this despite predictions earlier in the year that the impacts felt by the Resignation will taper off. So how are people leaders addressing retention and attrition in the face of steep talent competition?
While retention bonuses—a payment or reward to incentivize employees to stay at the company—have been leaned on in the past, most CPOs agree that they should be used sparingly (and only to buy time in moments of despair). Instead, visionary CPOs in the CPOHQ community are exploring proactive equity grants and shared project bonuses tied to performance as possible retention strategies, especially to reward high performers.
Others are doubling down on non-monetary incentives they’ve found work best, like conducting “stay” interviews to address engagement concerns and surface common reasons for attrition before they become pervasive problems.
Across the board, employers are prioritizing incentives that support talent in ways they prefer to be supported. For example, 61% of today’s employees say that greater work-life balance and better personal well-being are very important to them in the workplace.
CPOs and executives agree, with 40% of those polled in CPOHQ reporting that they offer company-wide mental health days (5% offer them monthly, while another 5% offer them quarterly). People leaders are realizing that mental health days aren’t just a lever to curb burnout—they elevate their total benefits package and bring them one step closer to authentic inclusivity by prioritizing those who may be struggling behind closed doors.
"Through our research, we found a mismatch between what support employees want from their employers and what is actually being offered," said CPOHQ member and Calm's CPO Scott Domann. "More than 66% of employees don't feel comfortable talking about their mental health with their manager. Starting and encouraging space for those conversations is critical to building cultures that prioritize employee wellbeing."
But it isn’t just mental health and wellness benefits that prospective employees look for. They’re also looking to people leaders to effectively guide the return to the office, and take into account their values, which brings us to the next trend to watch out for.
2. Navigating hybrid work and the return to office manifesto
Remote work may have peaked during the pandemic, but the conversation on how to show up to work may still be heating up. Some companies, like Alphabet, have formally opted for an office-first culture, while others are piloting a hybrid approach. (Another notably announced that employees could work anywhere in the world.)
Regardless of the approach, an important factor when considering a job for 43% of US employees is whether the company’s COVID-19 vaccination policies align with their values. A year later these sentiments continue to shape return to office plans.
For employers that have reopened their offices or resumed in-person meetings—64% say their companies still require proof of COVID-19 vaccination to come into the office or meet in person, except for religious or medical reasons (and with reasonable accommodations factored in).
These landmark policies help mitigate concern from employees around health and safety and gives them greater control over what they disclose. While safeguarding employee health remains a top concern, that’s not the only factor. Employee engagement, productivity, and work-life balance are taking center stage.
And for employers that have found hybrid to work best, they’re discovering ways to remain competitive and support their people wherever they are through stipends or subsidies for home office setups, phone, and internet.
Considering that 74% of employers polled in CPOHQ don’t offer an internet stipend, benefits like these could be a strong differentiator.
It’s important to note that not every generation views these policies similarly, and as workforce demographics evolve over the coming years, so will the strategies required of people leaders to respond to shifting generational perspectives. Knoetic CPOHQ member and CPO of Suzy, Anthony Onesto, for example, says “COVID-19 proved that jobs can’t only be done in one way, at a desk. Offering more flexibility, and remote or hybrid options helps draw Gen Z attention who have a desire to work on their terms.”
Flexible work arrangements, work-from-home stipends, and transparency into COVID-19 policies could alleviate employee stress. But employees aren’t the only ones feeling pressure… leadership is, too.
3. Recession or not, CPOs are being proactive to get ahead
Stymied by a rise in inflation and despite an unrelenting hiring market, the US economy is at a tipping point. Investors are tightening their wallets (some are preparing their portfolio of companies to avert the ‘death spiral.’), and executives are questioning what the next few years might mean for their business.
Will they rise to the occasion and become leaders in their category, as Airbus and Apple did during the Great Recession of 2008? Or will they become displaced by new disruptors, like Microsoft and Boeing?
To influence the most promising outcomes, companies are increasingly becoming proactive, reorienting their goals and workforce toward sustainable growth coupled with disciplined financial management—sentiments that are echoed by the executives and CPOs in the CPOHQ community.
From May to June 2022, 3x more CPOs and executives said they anticipated an economic downturn and were actively planning for it. The majority of people leaders expect an imminent and lasting market change, and as a result, are conducting exercises and scenario planning to extend their runway and protect high performers, engagement, and morale.
That said, headcount has remained largely unaffected, with 3 in 4 companies not predicting layoffs at this time, indicating a priority from executives and people teams to sustain their workforce until cuts are necessary. From a recruiting perspective, there are still almost two jobs open for every person looking for work, and while big tech slows or freezes hiring, other companies are taking advantage to court top talent.
With these cost-cutting measures in mind, how can HR teams continue to compete for talent, plan for a return to the office, and navigate a mild or enduring recession? HR teams can get ahead by aligning with their leaders on what’s best for their business and embracing innovation and change without adding on resources.
4. People analytics will support critical business decisions
Another trend we’ll see come to fruition over the next year is the rise of people analytics—and how that’ll influence every area of the business. Thanks to the digital transformation teams have experienced over the past two years, departments are now more data-driven than ever before. And their executives are knocking on HR’s door looking for greater insight into their people.
According to HR expert, Josh Bersin, companies with advanced people analytics are 7.3x more likely to engage and retain their employees and 2.6x more likely to exceed their financial targets, even though 4 in 5 companies have yet to adopt advanced people analytics. Instead, these teams dedicate hours every week to build time-consuming reports or their own, costly data warehouses to parse through people trends.
This has led to operational inefficiencies during a time when CEOs have developed a heightened interest in their people. HR is being tasked with doing more and answering 100s of questions for the business. A robust people analytics engine can help uncover those trends in minutes—not hours—and democratize that information to others in a compliant way so that they’re also able to make quick and thoughtful decisions.
Discover what drives your people with Knoetic
People teams typically rely on up to a dozen (if not more) tools to manage HR processes such as recruiting, compensation, performance, engagement, etc. These solutions might give you visibility into a particular slice of each employee, but they won’t provide a full picture into everything behind an employee’s story.
With Knoetic, you can discover what drives your people to come, stay, and feel valued at work. By integrating with 50+ providers across your HR tech stack, Knoetic harnesses the power of your unique HR ecosystem to surface the insights that matter most to you.
As teams everywhere explore opportunities to cut costs, consolidate work, and prioritize impact, people teams can remain ahead by empowering themselves to reduce busy work like aggregating manual reports and uncover people trends fast. And instead of being a reporting service center, these teams can enable other business leaders with unique insight into their teams by sharing custom reports on Knoetic.
When leaders are not busy uncovering trends about their people in Knoetic, they’re networking, sharing knowledge, and learning from their peers on CPOHQ. Whether you’re quantifying your outcomes or coming up with creative and innovative people solutions, learn how Knoetic is a CPO’s headquarters. Apply to join community of CPOs >