- By Alex Gaw
- September 12, 2022
As economic headwinds swirl through markets and industries, uncertainty hangs over the workplace today with employees continuing to quit while companies freeze hiring and rescind job offers, according to a new report from performance management company 15Five.
In a July 2022 survey of 500 human resources (HR) leaders and 1,000 U.S. adults with full-time employment, 15Five and its report partner, market research firm Propeller Insights, asked about work-life balance, preferred work environments, the likelihood of quitting, the specter of layoffs, and other concerns about the current and future economic climate. The results from the survey show that work-life balance remains a top priority for employees in the country; that attrition rates are slowing down but continuing; and that HR leaders are facing pressure from all sides as they try to navigate a tumultuous environment.
“We are seeing economic shifts driving some companies to downsize their workforces, especially in the tech sector, while other businesses are still dealing with high attrition and difficulty hiring in a competitive labor market,” says Jennie Yang, vice president of People & Culture at 15Five. “But no matter the state of the economy or talent market, it is vital to first gather data on employee sentiment and performance and then take action. Tech solutions can help HR leaders to identify top performers and then equip managers to bolster employee engagement, productivity, and morale.”
San Francisco-based 15Five is the developer of employee engagement and performance management software for organizations worldwide. The 15Five product suite aligns with solutions that HR professionals require to gather performance data for driving engagement as companies seek to improve business results.
Work-life balance a top priority
The survey reveals that work-life balance is a top concern for employees, behind only pay and health benefits. Employees also feel strongly about downtime, which many workers say seems to be diminishing—if not vanishing outright. Remarkably, HR is in agreement.
Overall, HR continues to weigh existing or available options to resolve issues involving work-life balance and disappearing downtime. One option picking up steam in larger organizations—those with more than 500 employees—is the four-day workweek. Nearly 60% of HR leaders say they are likely to advocate a shorter workweek.
Attrition rates slow down but continue
Because the economy could potentially downshift, as many are forecasting, attrition rates will likely slow but not stop altogether. While most employees (56%) say economic factors would influence their decision to leave, nearly one-third still plan to quit or are considering leaving in the next six to 12 months. The possibility that there may be fewer available jobs after a worker quits made no difference to the overall picture.
Among HR leaders, 44% report that more employees left their jobs during the first half of 2022 compared to the first half last year. Results from the survey confirm that the top reasons employees are leaving include better pay at a new job, stress at the current place of work, and more flexible work options.
Meanwhile, nearly one in five HR leaders plan to implement layoffs, with solid majorities acknowledging that the economic downturn has significantly impacted revenue (59.8%) and their ability to hire (68.0%). More than one-third (35.8%) say that unexpected hiring freezes have led to rescinded job offers; the companies rescinding offers were those with a workforce of 500 or more employees. The hiring freeze, however, has heightened HR efforts to upskill workers. Nearly half (49.6%) plan to introduce manager training and add performance management software (46.4%) in the second half of 2022 and beyond.
In considering layoffs, performance ratings are key, HR executives say. Performance is evaluated through quarterly reviews (25.8%), manager feedback (22.6%), and annual reviews (20.4%).
Related Article: Oracle Cuts 5,000 Jobs in CX Division and in Marketing
HR leaders feel the pressure
The upheaval confronting employees is also occurring in HR. Leaders in the field are experiencing pressure from all sides, with upper management imposing financial constraints even though organizations continue to require the replacement of those who leave. HR professionals also have the difficult task of communicating and implementing layoffs. As a result, 42.2% report having anxiety, 30.2% feel burnt out, and 16.8% have quit altogether.
Yang, the vice president at 15Five, says HR is often required to take on Herculean tasks in a highly tumultuous environment. “The fluctuating economy means HR must be prepared for either retraction or growth while ensuring top talent does not quit. HR is also expected to support managers in keeping their employees engaged and productive despite any upheavals happening internally within the organization or externally within society. We have found that HR teams that leverage data and insights are finding success navigating this volatile environment.”
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