Latest findings from PwC’s Pulse Survey
As the country heads into 2021, CHROs are taking on a new, unprecedented role: moral compass. They’re leading their organizations on the most pressing issues of the day, from addressing employee safety and upskilling to tackling complex issues like mental health and racial intolerance. But with organizations facing new challenges — including a rising wave of COVID-19 infections and the promise of policy changes under a new presidential administration — CHROs will need to be in lockstep with leaders in other business units. And that may not be easy.
Our latest Pulse survey shows that CHROs see a greater sense of urgency on workforce issues than leaders in other areas of the business, including CFOs and COOs, likely because they’re more plugged into workforce needs. Human Resource leaders consistently differ from other business leaders on everything from the importance of a federal stimulus package to the need for additional benefits for employees. For example, 84% of CHROs plan to offer increased support for mental health and well-being to their workforce in the absence or delay of a federal economic stimulus for individuals — likely because they see a greater sense of urgency to address the issue. That percentage is well above the 72% of all business leaders.
For CHROs to make headway on their people agenda and for business leaders to accelerate the organization's recovery, they’ll need to work together to collectively align expectations and priorities. CHROs have an opportunity to leverage their newfound influence within their organization to become a strategic partner to the business and help other leaders understand the needs and desires of the workforce. They’ll also need leaders across the organization to tackle immediate needs, like addressing mental health and practicing inclusive leadership to unite a divided workforce, while also preparing for longer-term challenges like policy changes and managing a hybrid workplace.
108 CHROs from Fortune 1000 and private companies, along with other C-suite executives, weighed in on policy-related issues in our latest PwC Pulse Survey, fielded November 9 to November 13, 2020. In the ongoing survey, HR leaders also shared their perspectives on other top-of-mind issues, including employee well-being, upskilling and an ambitious 2021 agenda.
The COVID-19 outbreak. A shaky economy. Social unrest as the country confronts systemic racism. A divisive election. These stressors — and dozens of others that have cropped up in 2020 — are taking their toll on the workforce, sapping productivity and leaving employees tense and anxious. For example, our November Workforce Pulse survey found that their ability to be productive and do their best work has been impacted by factors such as feeling physically unsafe at work due to COVID-19, a lack of inclusivity at work, and stress and anxiety.
These are sensitive issues, but CHROs recognize that tackling them is important for society as well as critical to the business. For example, 36% of CHROs see issues related to racial inequality and social justice as a top concern with respect to operating in the current business environment. To make strides towards racial equality, CHROs plan to increase diversity and inclusion training for employees (52%) and create new opportunities for employees to have conversations about difficult social issues (41%). In addition, 71% are also planning to make changes around their human capital reporting, such as pay equity.
To address employee wellness, 84% of CHROs plan to roll out additional support for mental health — something employees see as critical. Though the vast majority of CFOs (84%) say their company is successfully addressing mental health and morale, employees disagree. Our latest Workforce Pulse survey found that only 31% of employees strongly agree that their company has successfully addressed employee well-being, including mental health.
There’s a clear urgency for CHROs to help other leaders understand the stresses employees are under as they navigate work and life in a pandemic and how that may be affecting their productivity, motivation and morale. Sharing employee sentiment data may help illustrate the problem and give leaders more insight into what employees need and how leaders can help provide more support.
With Biden’s election, optimism surged among CHROs about prospects for growth. Across the board, the majority of CHROs are more optimistic now than before Biden’s election about sources of growth that are significant for their organization, including organic growth in the domestic market (63%), new products and services (57%) and international markets (56%). They also appear confident about job creation, reflected by the 76% of CHROs who are already planning for competition for talent as economic recovery gets underway.
As part of the growth agenda, it’s critical that CHROs have plans in place to upskill employees to develop new skills and reskill employees as jobs and technology changes. More than half (58%) of CHROs say they plan to implement upskilling initiatives in the absence or delay of a federal economic stimulus for individuals; another 33% are either considering a plan for upskilling or have a plan in place but have not yet started it.
In addition, as firms continue to accelerate their digital transformations and sectors reinvent how they do business based on consumer preferences and social norms, they’ll need to hire, onboard, reskill and re-engage employees. CHROs will need to stay closely aligned with other business leaders on workforce strategy.
HR leaders will also have to reconcile with other leaders on the right level of resource allocations for the workforce. Only about half of CFOs (52%) expect to change resource allocations for workforce investments in 2021. But far more — 79% — of CHROs expect an increase. This could be because CHROs anticipate significant changes in the needs of the workforce, such as additional benefits like mental health support, or because they anticipate more hiring: Nearly 60% of CHROs said in our October Pulse survey that they expect a headcount increase under a Biden administration. There’s a disconnect between the CHROs’ needs and desires for resources and what the organization will be able to finance when prioritizing all the business needs in a constrained environment. CHROs will need to reconcile the differences with CFOs and the rest of the C-suite.
Concerns that a rising wave of COVID-19 infections could shut down businesses top the list of concerns of both CHROs and other leaders. But while these leaders are confident they can keep employees safe, whether that’s because they’ve modified the layout of their physical worksite to allow for social distancing or because of other measures, employees don’t agree. Only 19% of CHROs say they’re concerned about a lack of employee confidence in their ability to keep them safe, but nearly half of employees (48%) say they feel forced to sacrifice their personal safety to stay employed, according to our most recent Workforce Pulse Survey.
CHROs can help address employee fears by ramping up communication about what the business is doing to help protect people. Measures such as only bringing people into the office selectively and implementing clear health and safety protocols may also help. In addition, it’s important to try to understand people’s individual health constraints, such as an employee who is afraid of exposing a vulnerable family member to the virus, and work to make appropriate accommodations. In terms of getting the funding to provide more support, CHROs will need to work with CFOs and other leaders to help them understand the urgency and employee sentiment driving the need for additional employee support.
HR leaders will be at the center of return-to-the-office planning and designing a hybrid work atmosphere. They’ll also be a key part of helping other leaders define the need for future real estate, though companies appear split on what that might look like in the long term. While 7% of chief operating officers (COOs) said they expect their total office space needs to decrease by at least 25% in the next three years, 5% say they expect an increase by at least 25%.
CHROs appear ready to take the lead on helping address workforce problems for more than their own organizations. The majority (89%) of CHROs say they want to engage with elected officials to raise awareness of President-elect Joe Biden’s campaign tax proposals on their business operations. That’s compared with 78% across all business leaders.
The experience and insight gained from helping to lead on issues like employee wellness, morale, productivity, protecting jobs, upskilling and other issues puts HR leaders in a prime role to help influence policymakers and work with them on sustainable solutions for the country. That includes addressing issues such as skills development and mobility, immigration, tax credits, reskilling and workforce development, and stimulus to protect jobs.
How prepared are you for the business impacts of potential policy and regulatory shifts? Register to receive our on-demand webcast featuring the results of the latest PwC Pulse survey. You’ll receive a link to watch at your leisure, beginning November 24.