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HR leaders are taking on more responsibilities than ever. They’re dealing with burnt out employees, demanding Gen Z workers, and they're often responsible for rolling out AI within their own workforce. But none of those concerns even crack the top five on their list.
Ineffective leadership is the top worry for U.S. HR and risk executives this year, according to a new report from Mercer, an HR consulting firm. That’s followed by improper rewards decision making, which includes employer choices on anything provided to staffers like compensation packages or PTO benefits. Increasing health and benefits costs came in third, while worries over a lack of cybersecurity came in fourth place, misconduct placed fifth, and tech skills shortages was sixth.
“Employee trust with their leadership has eroded since the pandemic,” Stephanie Brunermer, principal of global research and solutions for Mercer, tells Fortune. She adds that executives often faltered when it came to steering their workforces through global crises. “So some of that trend around trust, following your organization and believing in them, are leading HR and risk professionals to say: ‘We need to make sure that we address this head-on through our leadership.’”
When it comes to rewards decision-making, everything from wages, to flexible schedules, retirement savings plans, and childcare are chief priorities for workers, according to Jennifer Calhoun, a senior health partner for Mercer. But most companies must pick and choose which ones to prioritize, and HR professionals need to be prudent when they decide where to spend their employee budgets. Each organization is different and there is no “one-size-fits-all” rewards package that bosses should follow, but she adds that the stakes are high.
“Benefits are [employees’] entire relationship with an organization. It's everything,” she says.
Calhoun says rising health and benefit costs are due to macroeconomic headwinds and increased employer care expectations from workers. “People are utilizing health care more post-pandemic under private plans. And in most markets around the globe, we're seeing pretty significant inflation,” she says.
Acknowledging their worries is one step in the right direction, but Calhoun says the next step is for HR leaders and risk managers to strategize solutions together. The good news is that 97% of respondents say CHROs and risk-focused executives are already working as a team. As more problems arise, this collaboration will be essential to effectively lead their workforces and businesses.
“The call to action is HR and risk can now work together to evaluate what are the common themes, diagnoses, and shared resources,” she says. “They should not work in isolation anymore.”
Emma Burleigh
emma.burleigh@fortune.com
