In 2017, Paychex conducted its first Pulse of HR Survey, polling 309 human resources decision makers in U.S. companies with 50-500 employees across a range of industries. Four prominent issues emerged from the research that year: stress among HR professionals, employee engagement, workplace benefits, and department size.
We performed the research again this year, and emerging trends included:
- The efficacy and versatility of HR technology;
- The growing use of artificial intelligence, such as voice recognition, chatbots, and virtual reality interfaces; and
- The continued strength of the HR profession.
Let's compare survey findings from 2017 and 2018.
The shifting role of HR
- HR as a strategic company player: In 2017 and 2018, the same number of HR leaders — 80 percent — said they believe their department is seen as a strategic partner in their organization.
- Compliance gaining importance: In 2017, just 10 percent of respondents said they dedicated time to research on handling employee issues within legal parameters. In this year's survey, that number rose to 17 percent.
Insight for 2018: Employee productivity is top of mind
HR acts as a strategic partner for all departments by providing:
- Evaluations of workplace productivity and efficiency – 90 percent
- Staff training and development programs – 88 percent
- Focusing on company culture to drive results – 85 percent
Challenges and trends
General HR challenges
The 2018 survey found that nearly half (45 percent) of HR leaders see more unqualified candidates applying for high-level jobs than in the past, which is nearly equal to the number of leaders seeing more overqualified candidates applying for lower-level jobs than in the past (44 percent). This could indicate that in today’s tightening labor market, many people are applying for any job, rather than a suitable one.
Virtual employees and contractors
This year's top five challenges revealed in the survey focus on work-from-home employees, and included:
- Management and oversight of work (29 percent)
- Security and confidentiality of information (26 percent)
- Engendering consistent productivity (25 percent)
- Benefits administration (23 percent)
- Recruiting and applicant tracking (22 percent)
- Flexible scheduling still ranks as the top nontraditional benefit, but fewer companies now provide it — 39 percent in 2018 vs. 43 percent in 2017.
- Free meals, ranked as the second-most common benefit in 2017, dropped considerably to eighth place (from 23 percent to 15 percent).
- New common benefits include employee assistance programs, career development programs, discounts to local events, student loan repayments and free wellness wearables, all of which could help attract employees in a tight labor market.
- Fast-growth companies are more likely to use application software for retirement administration (55 percent), compared with 42 percent of slow-growth and 22 percent of no-growth companies.
HR departments are seeing higher levels of staff engagement as employees show more enthusiasm for their work. In 2018, 35 percent of HR leaders estimate that 51-75 percent of their employees are engaged, compared with 20 percent thinking the same in 2017.
In 2017, HR leaders were more likely to be comfortable supporting the personnel needs of Gen Xers (born 1965-1980) and baby boomers (born 1946-1964) than millennials (born 1981-1997), but generational discrepancies have narrowed this year. In 2018, survey results show that support for all generations hovers around 51 percent, compared with 48 percent for millennials and 64 percent for Gen X in 2017.
More than half of HR departments in this year's survey — 53 percent — indicate they plan to add full-time employees in 2018. Companies today increasingly focus on expansion; just over a quarter of respondents said the same in 2017. By contrast, only 27 percent of HR departments say they plan to add part-time staff in 2018.
The 2018 survey shows that HR leaders' stress levels did not change from last year — 78 percent report feeling anxious.
Insights for 2018
The top five most-cited HR challenges in 2018:
- Keeping up with regulations (38 percent)
- Tracking employees' time (38 percent)
- Complying with regulations (35 percent)
- Offering competitive benefits (33 percent)
- Retaining talent (31 percent)
Eighty-three percent of respondents surveyed said they offer training to combat workplace discrimination and harassment. Sixty-five percent say they have updated their harassment policies within the last 12 months. These priorities are likely driven by current societal trends and publicity around these issues.
In addition, 67 percent of respondents note that they re-evaluated company pay practices to ensure gender equality over the past year.
The majority (85 percent) of respondents said they focus on company culture to push results. However, the survey shows that finding candidates who fit the company culture is the second-most cited hiring challenge (41 percent). A third of respondents — 34 percent — say they work to foster employee engagement by creating a hiring experience that conveys company culture.
More HR leaders use data analysis to understand how to communicate more efficiently with employees, from 64 percent in 2017 to 77 percent in 2018. The trend indicates that HR departments are being more analytical and strategic.
Insights for 2018
This year, 79 percent of respondents said their current automated HR solution helps them play a more strategic role in their firms, while 77 percent think it helps them increase efficiency.
Effects and applications of HR technology solutions
- HR is most likely to use application software for record-keeping (75 percent), time and attendance tracking (58 percent) and benefits administration (58 percent). Companies are most likely to use manual processes to integrate new employees into the organization (28 percent), performance management (27 percent) and travel and expense reimbursement (27 percent). This could indicate a missed opportunity for many HR leaders, since automation can save time and money, and improve recordkeeping accuracy.
- HR departments surveyed are most satisfied with user-friendly technology, with 86 percent categorizing their HR systems as easy to use, and 77 percent saying those systems improve the overall employee experience.
- Three-quarters (75 percent) of poll respondents say technology has improved HR leadership's ability to play a critical role in corporate success, but 41 percent say it's still difficult to keep up with the pace of change in HR technology.
- HR leaders polled said that the top two areas for which they'd like outside support are recruiting/hiring (26 percent) and regulatory compliance (26 percent).
Companies most often use workforce analytics to:
- Track employee benefits;
- Track time off and training (89 percent);
- Justify HR decisions to senior management (85 percent); and
- Make more informed business decisions (83 percent).
However, analytics and reporting still represent a top challenge for 25 percent of leaders polled, and 42 percent said it's difficult to keep up with the demands that empirical data place on HR.
More than half (58 percent) of companies in the 2018 survey indicate that they use artificial intelligence (AI) technology, such as voice recognition, chatbots, and virtual reality interfaces. However, only 22 percent claim they apply it effectively, and 12 percent say their use is poor or inconsistent. This means that 42 percent of respondents don't use AI at all. Nevertheless, AI is an advancing trend with a growing role in business.
Despite the profession's challenges and high stress level, nearly three-quarters (72 percent) of HR leaders polled said that they would recommend human resources as a career for someone entering the workforce today. Sixty percent of HR leaders say they receive the best HR job candidates they've ever seen.
Nearly every U.S. industry recognizes the importance of HR expertise in supporting company performance, regulatory compliance, and the bottom line. As such, the 2018 Paychex Pulse of HR Survey gives a snapshot of a dynamic profession essential to business success. Get full details by accessing the report now.
About the Paychex Pulse of HR Survey
Data included in the 2018 Pulse of HR Survey was taken from an online survey, administered by Bredin, between April 13, 2018 and April 21, 2018. This survey polled 300 HR decision makers from U.S. companies with 50-500 employees.