November 19, 2021Thoughts & Insight

5 workplace trends every business owner needs to know in 2022

As 2021 winds down, so too does the first full year of working under Covid-related conditions. The future of work looks different: hiring, retention, commuting — none of these things will be going back to the way they were before. Instead, many business owners have been forced to permanently shift their operations to adapt to new workplace trends.

While this has caused disruption for many organizations, evolving employment trends also present an opportunity for leaders to reassess and innovate. Knowing what to look for and staying ahead is key to your organization’s survival. 

5 workplace trends to watch

The top workplace trends post-Covid include: innovation in hiring, proper worker classification, the end of the two-week pay cycle, long-term remote work policies and the growing impact of inflation on workers and employers alike. 

Let’s dive into how each of these trends are shaping work in 2022 and how to set up your organization for success next year and beyond.

Trend #1: If you want workers, you’re going to have to try

One of the workplace trends everyone is talking about is the “Great Resignation.” Businesses everywhere know it’s getting harder to attract, hire and retain talent. After 4 million U.S. workers called it quits in July, America was left with nearly 11 million job vacancies to fill. Despite extended unemployment benefits expiring in September 2021, there hasn’t been a quick resolution of the worker shortage— and companies are still struggling to fill open positions.

Workers that are still looking for jobs have more leverage than they’ve had in some time. That being the case, business owners need to be cognizant that this employment trend isn’t going anywhere and adjust their hiring practices accordingly. 

A few quick opportunities leaders could implement in 2022? 

  • Make the hiring process as seamless as possible with a better mobile experience for applicants and faster response times. 
  • Consider offering unique benefits such as daily pay, tuition reimbursement or deep worker discounts. 
  • Finally, go all-in with flexibility. The pandemic has revealed workers’ preference for fluid hours, work locations and pay frequency.

Trend #2: Employee misclassification will cost you 

One of the top workforce trends is the increase of freelance workers, according to Upwork

There have never been more freelance contractors working today, as illustrated in this data by Upwork. It’s obvious the gig business model isn’t going to be one of those passing workplace trends: independent work is going to become a more permanent part of how people make money. In fact, it’s estimated that by 2027, gig workers will make up over half of the American workforce.

Over the last few years, there’s been an ongoing conversation about gig worker classification. Of course, there are already federal and state requirements outlining who to classify as an employee vs. a contractor, and the rules vary state by state. Sometimes, the state requirements are more rigid — most notably, as we’ve seen with California Assembly Bill 5 — and sometimes, they’re more flexible. Large companies that rely on these contingent workforces, like Uber, Lyft, and Postmates are actively fighting for more classification exemptions. Other businesses are struggling to know how to comply. It’s a mess. 

Gig workers are a big group and trying to fit them all into a 1099 or W-2 classification may not work long-term. It’s possible that regulators will create a new classification for these workers that’s more of a middle ground. 

No matter how the debate shakes out, as a business owner you need to be aware of the rules in the states where you do business to avoid fines and penalties. If you’re unclear how to classify your workers, it might be time to get the help of an expert, including legal counsel. You should also make sure the systems you have in place to manage workers — e.g., your payroll platform or HRIS — allows you to support both worker types. 

Trend #3: The two week pay cycle will finally be disrupted

According to the 2021 Gig Worker Survey Report, just 15 percent of contracted workers have enough savings to cover an emergency expense. In the wake of the pandemic — and just a few weeks removed from the expiration of the enhanced unemployment benefits — it follows that at least some of the folks your organization depends on are struggling financially.

Business owners have the power to put an end to outdated paydays. If employees or independent contractors are living paycheck-to-paycheck, one financial emergency may hurt worker productivity and morale. As such, being able to give workers their earnings faster is a huge deal. Doing so can help you attract more workers and decrease absenteeism. 

Instead of forcing workers to take out exorbitantly expensive payday loans or take on other short-term debt, business owners should invest in new payday loan alternatives like accelerated payments. Modern payroll platforms, earned wage access apps, and digital wallets are already driving an exciting workplace trend of putting money into the hands of workers faster — even daily. With the right tools in place, two-week pay can be a thing of the past.

Trend #4: There’s no excuse for reactive remote policies

WeWorkRemotely State of Remote Work report shows how remote hiring is a dominate workplace trend

During the pandemic, many companies rapidly transitioned to a temporary state of remote work. Remote job site, WeWorkRemotely, posted more jobs in 2020 than any other year. Now remote and hybrid work environments are here to stay, so reactive remote pay policies must solidify in 2022. 

For example, a perk of the pandemic meant someone who commanded a San Francisco salary was able to earn the same working in rural Texas. But what about the worker who lived in that same rural area all along and is earning considerably less because of it? 

Next year, organizations must confront these lopsided payment structures and share the news with employees who’ve been living large in low-cost areas. This isn’t something to enact overnight; employees need to be given enough lead time — say, six months — so they’re not blindsided by the news. This way, they’ll be able to find a new gig — or at least adjust their budgets as they get ready to live on a salary that better reflects their cost of living. 

Of course, even though it’s right for the business, this isn’t an easy conversation to have. As such, business owners should prepare for the likelihood that they’ll lose some workers.

On top of pay structures that differ across regions of the United States, international organizations will also need to think about location-based pay structures in jurisdictions across the world. Without the right tools in place, determining fair payment and dealing with country and local taxes is an incredibly challenging undertaking. 

Trend #5: Inflation will hurt workers and your business

With global supply-chain challenges and an increase in consumer spending, inflation is here to stay for the foreseeable future. No matter your line of business, inflation will have an impact on your workplace sooner or later. 

To be proactive, business owners should start to consider ways to ease the impact. For example, if you’re a consumer products company, price increases may need to be added to the roadmap. Or, you may need to focus on increasing operational efficiency, so you can make up your margins by reducing expenses.

Inflation will also have an impact on your employees’ pocketbooks, too. As their cost of living increases, they’ll expect their wages to increase too. If you don’t offer pay that’s comparable to the market, you’ll likely find yourself dealing with a less-engaged workforce — which could lead to worker churn. And that’s something your organization likely can’t afford in the current labor shortage. You’ll need to figure out how to fund wage increases — and that’s where the smart investments in technology we just talked about can be particularly helpful.

Now trending: The future of work

A silver lining to pandemic-driven workplace trends is that they’ve created an opportunity for organizations to change the way they do things and put themselves in a better position to win in the future. 

The sooner business owners accept this new reality, the faster they’ll be able to win the war for talent and and retain the people they need to help their organizations reach their full potential. By understanding the way people want to work and the benefits they need, business owners can navigating the changing world of work and ensure their organizations are ready to thrive for years to come.