Every year the HR Pulse Survey looks to identify the key HR challenges local organisations are facing and to gain insight on the priorities for people management going forward. As we stand in this point of uncertainty, with what is believed to be the brunt of the pandemic behind us and a new normal ahead of us, this survey investigates what the workforce might look like after the effects of the pandemic start to subside.
This survey also looks into how organisational priorities are changing and the long-lasting impact of the pandemic on how we work and the future of organisations. The results shed light on themes such as new working models, people concerns, recruitment in the current climate, organisation’s shifting focus on employee experience and wellbeing, and what the future of HR functions might look like in a post-pandemic environment.
COVID-19 has accelerated transformation in some areas, halted progress in others, shifted priorities, and catalysed how the future of work is evolving. This study showcases how the changes we are currently facing are undoubtedly shaping the way we will work in the future and provides a picture of how the world of work will look like moving forward.
Workplace Strategy
Prior to the onset of the pandemic, a prevailing corporate belief was that corporate offices situated in a prime real estate area with an open-plan design are key to employee engagement, retention, and productivity. The HR Pulse Survey carried out in 2020 showed that the most popular measure taken by organisations locally in light of the pandemic was initiating remote working (68%). This therefore resulted in not simply a physical change, but a deeply cultural one that many had not anticipated.
The results obtained through the 2021 survey indicate that this major transition was largely maintained over the past 12 months, with roughly 40% of respondents stating that their workforce balanced their time between working remotely and occasionally going on-site, while the employees of a further 18% worked remotely every day. This finding is even more significant when considering that 32% of respondents stated that their line of work does not enable remote work or their organisation had to close during the past 12 months. In contrast, only 8% of respondents did not introduce hybrid or remote work despite being able to.
Since the onset of the pandemic, employees have demonstrated an interest in maintaining some form of remote working. Over the past 12 months, this new way of working has proven itself feasible and various factors have supported its’ proof of concept. Respondents of this survey who have introduced or maintained hybrid working, have done so for multiple reasons, with their top three reasons being;
93%
77%
74%
Other reasons included to lessen time spent by employees commuting (54%), to tackle remote work burnout (40%), to sustain a noted increase in productivity due to remote work (30%) and to reduce overhead costs (21%).
Fundamentally the study shows that organisations are finding that hybrid working in the form of splitting time between working remotely and on-site, has been well received by their workforce and is facilitating enhanced employee wellbeing. Organisations are also experiencing added benefits such as potential access to a greater talent pool which are not limited geographically, a more motivated workforce and a reduced need or different configuration for office space.
Analysing the Effects of the Pandemic on the Workforce
How do you believe the pandemic has positively affected your organisation, if at all?
The pandemic has had considerable impact on the workforce in many ways and different organisations have employed varying ways to not only manage this, but to also leverage potential opportunities. The majority of respondents (90%) recognise that the pandemic had some positive effects on their organisation. In fact, the annual HR Pulse Survey conducted in 2020, revealed that 47% of respondents planned to implement greater flexibility in work hours and move away from a traditional eight-hour work block.
According to respondents of this year's study, the top three positive effects have been;
- improved work flexibility (65%),
- the development of a more resilient and agile workforce (55%), and
- an increased effort placed on managing employee wellbeing (49%).
Other notable improvements were an increased investment in technology and digital transformation (41%), placing more effort in retaining critical talent (35%), improvement in cascading communication across different levels (24%), heightened upskilling and reskilling effort (16%) and enhancing workforce’s skill sets (14%).
Other responses outlined that the pandemic has brought their global offices closer together, brought about a greater level of collaboration between teams, increased efficiency, and improved productivity.
People concerns with respect to operating within the changed business environment brought about by the pandemic
While organisations are reaping certain benefits as a result of the pandemic which has catalysed transformations that many had been hoping would come for years, this cannot mask the real people challenges that have inadvertently surfaced. This study found that the top three people centric concerns in relation to the changed business environment as a result of the pandemic have been;
- increased uncertainty amongst employees (41%),
- lower employee engagement (37%), and
- managers not effectively adapting to managing their staff remotely (32%).
These concerns highlight the important role leaders play within organisations during these rapidly changing times. Leaders must address the new realities created, or exacerbated, as a result of the pandemic. Organisations must ensure that their management is equipped with the required resources and training to support their employees and help tackle uncertainties and morale issues that may be surfacing.
Highlights
An evolving approach to Performance Management
Another challenge organisations may face in today’s world of work is gauging employee performance. While employee performance may have previously been measured by time dedicated to tasks, and on a more subconscious level by an employee’s visibility at the office, this is changing. In the 2020 HR Pulse survey, 60% of respondents stated that the way employee performance is measured has changed by becoming more focused on output, and less so focused on time invested in tasks.
This year’s study found that only 22% of all respondents have not updated their performance management approach and do not intend to do so. A further 28% stated the way they measure performance has not yet changed though they feel that this should take place to reflect a hybrid working model.
More than a third of respondents (35%) stated that their performance management has changed to become more output focused rather than time oriented. A further 32% stated that performance is no longer based on visibility at the office. Furthermore, 25% are now measuring performance based on teamwork, rather than individual goals.
As these significant changes take place, organisations must revamp their performance management framework to include criteria and KPIs on which performance is assessed fairly and transparently. They may also need to adopt specialised tools to monitor and track employee output. Though this shift can never be seen as purely process driven or technological only, and requires a change in culture to ensure alignment with a new performance mindset.
28% of respondents also stated that digital skills and readiness to embrace change are being prioritised. As performance management evolves, organisations must account for certain skills which are necessary today more than ever, such as digital skills, as certain human skills such as adaptability and resilience.
Recruitment Trends and their Implications
Recruitment is one area of HR that has undoubtedly been impacted and is radically transforming as a result of the pandemic. In the 2020 HR Pulse Survey, 53% of respondents stated that at the start of the pandemic all recruitment plans had been stalled.
When compared to 2020, recruitment not only reopened but 61% of this year’s respondents stated that the market shifted back from an employer’s market to an employees’ market. This implies that while in 2020, job seekers had little to no options in terms of available vacancies, today it is the employers who now face challenges finding suitable candidates. This trend can have implications on organisations retention strategies, as top talent and high performers may find themselves considering new found opportunities.
Highlights
A Double-Disruption Scenario
Over the last year, certain industries have reported that pre-existing talent shortages have worsened - most notably being in the tourism, catering, healthcare, and the construction industries. The pandemic has had a clear impact on organisation’s recruitment activity and the volume of available talent. The majority of respondents (66%), stated that they have been impacted by the lack of available talent in the past twelve months. Amongst these, 30% stated that they have been highly impacted and only 20% have not been impacted at all.
Automation, in tandem with the pandemic, has created a ‘double-disruption’ scenario for organisations. Even before COVID-19, the demand for suitable candidates with the required skills was increasing at an accelerated rate due to the fast-changing demand of the labour market. However COVID-19 has become a driver by catalysing digitalisation at a more rapid pace and by radically transforming the type of skills that are needed.
When analysing this data further, larger organisations have been disproportionately impacted by the lack of available talent when compared to smaller ones. Furthermore, the majority of organisations in the banking sector reported that they have been impacted by the availability of talent, while a stagering 80% of accommodation and food services sector organisations stated that they have been highly impacted.
The noted lack of available talent has led to organisations stepping up efforts on their employee value proposition in a bid to make themselves a more attractive employer. In fact, the pandemic and the current talent shortages have underscored the critical importance of employer branding. This involves finding ways to differentiate the organisation in the labour market through showcasing the values, qualities and ways of working that are unique and promise a particular kind of employee experience.
Only 23% of respondents stated that they have not experienced a talent gap challenge. This study further found that 39% of respondents have increased the competitiveness of their remuneration packages, and a further 25% increased their employee benefits packages to become more attractive.
On the other hand, organisations are now also increasing their efforts abroad, with a significant 32% of respondents looking into offshoring, body leasing, and outsourcing to foreign third party providers. This growing trend must be closely watched, as organisations appear to have begun directing their resources to either employing full time persons outside of Malta or contracting overseas third parties.
Highlight
A Glimpse into the Future of the Recruitment Process
One inevitable yet necessary recruitment transformation has been the shift towards a technology enabled interview process. When asked about how their recruitment processes changed in the past twelve months, 61% of respondents indicated that they experienced an increase in digitalisation of their recruitment process, such as online interviews and virtual assessments.
This study found a notable improvement from last year’s study, with a more positive outlook. Whereas in the last survey, 44% of respondents stated that they froze recruitment plans, only 14% of respondents said they stalled their recruitment plans in the past twelve months.
Moreover, when asked about the next twelve months, over half of respondents (56%) believe that the interviewing process will take place, in part or in full, virtually. Locally, this is an unprecedented shift in both the candidate and the recruiters’ experience. Though the change does not stop there, 21% of respondents stated that hiring has become more skills focused. This could signify that in today’s world of work, specific capabilities shall be more in demand over others. More than a third of respondents (37%) will be focusing their recruitment efforts more on skills than on academic qualifications.
Responses also identified an increased focus on employee experience (44%) and employee wellbeing (48%) throughout the recruitment process, signifying that the employee value proposition may now, more than ever, be prioritising physical, emotional and mental health.
Traditional recruitment is therefore radically transforming in more ways than one. Technology is being leveraged through specialised software such as application tracking systems (ATS), introducing robotic process automation (RPA), and incorporating Artificial Intelligence (AI) to facilitate enhanced decision making.
Analysing the impact on the Employee Experience
With the rise in remote and hybrid work arrangements, wellbeing is becoming an increasingly important topic for organisations. Since some employees have been away from the office, it has become more difficult for leaders to identify early signs that an employee is struggling and might not be able to act in time to safeguard their wellbeing. The increase in digital communication due to remote and hybrid work also gave rise to an ‘always-on’ culture which if left unchecked may have detrimental effects on employees’ well-being.
These may be some of the reasons behind organisation’s focus on employee wellbeing and work-life balance. In fact, over the past 12 months organisations have made considerable effort to improve the employee experience of their teams. When asked what employee initiatives have been their primary focus, the lion's share of efforts were focused on improving Employee Wellbeing and Work-Life Balance (72%). Organisations also identified ‘addressing mental health concerns’ as one of the top 3 people challenges their organisation faces in the coming 12 months.
Highlight
Upskilling and the pandemic
In this study, respondents were also asked about their upskilling plans for their workforce and the majority (81%) of respondents said they are planning to upskill their workforce in technical, digital, or soft skills.
Most of these respondents (65%) plan to upskill their workforce in soft skills, such as communication, problem solving, and adaptability. The second most popular skill set (45%) was technical skills such as project management or change management. Surprisingly, the least popular skill set, at 38% was digital skills such as data analysis, digital marketing, or programming. (Graph below)
As training academies and in-house trainers had to shift their operations as a result of the pandemic, it is to be expected that the way in which organisations upskill or reskill their employees changed too. When analysing the changes in the way organisations upskill their workforce, we see that organisations have introduced a blended learning approach (33%) for the first time. Others strived to enhance the culture of flexible learning (33%) (learning anywhere at any time), increased upskilling efforts to new areas (27%) or adopted a dedicated Learning & Development platform (23%). Almost a third (32%) of respondents stated that the way they upskill their workforce has remained the same.
The post-pandemic HR function
In many organisations, the human resources team played a crucial role in managing the immediate response to the pandemic on a workforce level - whether it was in terms of selecting the right working arrangement for the different teams or communicating ongoing developments. In fact, last year’s study found that more than half (58%) of human resources functions were well prepared to manage the situation smoothly despite it being an unprecedented event.
It is thus expected that the role of the human resource function may change as we move towards a post-pandemic environment. Most commonly, respondents believe that HR will become more proactive and focused on business strategy (56%) and will continue to play a leading role in the organisation’s response to the impact of COVID-19 (54%). Respondents also believe that HR will become more people focused than policy focused and will increase its influence to other areas of the business (51%).
In contrast, another 38% of respondents stated that they foresee the HR function becoming more of a supporting, transactional function in a post-pandemic environment. Other respondents (13%) did not envisage changes to the role HR plays within the organisation.
The study next enquired about what changes organisations are planning to implement within the HR function in the coming twelve months. The most popular changes were the need to upskill the HR function on aspects such as Change Management to support the workforce in becoming more adaptable (53%), Digitalising the HR processes, (50%), and Upskilling the HR function to become digitally savvy (38%).
In line with the aforementioned belief that HR will become more people focused than policy focused in a post pandemic world, a quarter of responses stated that they plan on providing HR with more digital tools to stay connected with employees no matter where they are working from.
Some organisations (28%) foresee an augmentation of the HR team to empower it to cope with such future events whilst others (5%) plan on decreasing the size of the function or outsourcing it altogether.
Vision for the post pandemic way of working
Whilst it is important for leaders to handle the most imminent threats confronting them, planning and preparing for what is next is equally as essential. A vision for a better future will guide employees as to what to expect from the organisation in a post pandemic world. 62% of organisations have a vision in mind, 16% of which have formalised and communicated this vision with their workforce, however the majority have not yet formalised and shared it.
Promisingly, almost all of organisations (95%) with an updated vision have a noticeable alignment amongst the organisation’s leadership, on matters such as working arrangements or flexibility levels for employees in a post pandemic environment. However 40% of respondents have not yet started developing a vision on how their organisation will operate in a post pandemic environment. This proportion of respondents is predominantly made up of organisations within the accommodation, food service sector, and the construction industry.
Conclusion
The results from this study highlight how traditional ways of working have been radically tested and that through the significant challenges faced throughout the COVID-19 pandemic, a number of beneficial transformations have taken place. In many cases, the pandemic has catalysed changes and forced organisations to introduce new working practices, such as those in relation to their employee’s working arrangements. Results depict that changes, such as the hybrid working model are now here to stay with almost half of respondents planning to have their workforce balancing their time between working remotely and on-site moving forward.
This transformative force has accelerated change in some areas of organisations while also highlighting gaps to be addressed. The findings also shed light on what local organisations perceived to be the most positive effects of the pandemic, but also their top people concerns for the future. One key priority and challenge moving forward across most sectors is in relation to the availability of talent and candidates who possess the required skills. The study depicts in further detail how organisations will be facing these concerns and what initiatives they will prioritise to combat the identified challenges.
The results also show that some HR practices, such as recruitment, performance management and employee development, have adapted to the current reality and future requirements.
HR and business leaders have also identified priorities which they believe are here to stay in the long term, such as a new found focus on employee wellbeing. These will act as the foundation for a new world of work which adapts and embraces the changes induced by the pandemic onto organisations and their workforce.
About the Survey
PwC Malta is proud to partner with the Foundation for Human Resources Development (FHRD) for the 7th year to produce this report which provides invaluable insight into key HR challenges facing local organisations and gain insight on the priorities for people management going forward.
The findings and recommendations are crucial for employers and HR professionals navigating the challenges and implementing strategies in a world that looks very different from what it did months ago.
The 2021 Malta HR Pulse Survey had a record number of participants, with 101 organisational and HR leaders offering valuable insights from a wide-range of organisations of various sizes and industries. Data for this survey was collected during the summer months of 2021, notably during August and September. The key results were presented at the 2021 FHRD Conference, ‘HR 2021 - Beyond the Pandemic’.
Endnotes
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