HR HR Trends Report For 2021

2021
HR Trends Report
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human resources challenges with executable research, tools, and advice that will have a
clear and measurable impact on your business. © 1997-2021 McLean & Company.
McLean & Company is a division of Info-Tech Research Group Inc.
2021 HR Trends Report
01
HR in 2021
02
Diversity, equity, and inclusion (DEI)
is at the forefront of the conversation
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03
HR, thrust into the spotlight
Table of
04
Remote work: the office of the future?
2
Contents 05
Digital transformation: accelerated
How to read this report
This report is based on data gathered from McLean & Company’s 2021 HR Trends Survey of 850
business professionals. The data was gathered in September and October of 2020. It also includes
data from McLean & Company’s 2020 Pandemic Survey.
Note: Graph totals may not add up to 100% due to rounding.
Key terms used throughout this report include:

Organizational Size
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Small: 100 or fewer employees Medium: 101 to 2,000 employees Large: 2,001+ employees
High Performing
The percentage of respondents who selected 8, 9, or 10 out of 10 when asked to rate their
performance across various parameters.
Highly Effective
The percentage of respondents who selected 8, 9, or 10 out of 10 when asked to rate the
effectiveness across various parameters.
Highly Effective: Association & Relationship

Any time an association or relationship is referenced in this report, it refers to a statistically
significant result. Graphs or visualizations that show a difference in effectiveness based on
certain practices are also only shown if they are statistically significant. These are used to
indicate which practices are disproportionately used by the most-effective HR departments.
3
Characteristics of 2021 survey respondents
N=850 (unless otherwise noted)
Organization size Turnover rates Role Top seven industries

Manufacturing 14%
Small 22% Non-HR HR Financial Services 12%
Government 11%
46% Other 11%
Medium 52% 14% 54% Media, Telecom &… 9%
9% Professional Services 9%
Education 8%
Large 26% Voluntary Involuntary
n=598 n=573 Healthcare & Life Sciences 8%
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Seniority Location Is your workforce unionized?

50% North America
15%
Senior Leaders 8% Europe
71%
Middle East 2% 4% Asia
33% 25% 59%
Management
Latin America 5% 6%
Africa 4% Oceania
17%
Individual Contributors No Partially Yes
4
Key
insights
Diversity, equity, and inclusion (DEI) is at the forefront of
the conversation
Creating and sustaining an environment of diversity, equity, and inclusion can’t be achieved
with only quick-wins and band-aid solutions. Don’t overlook the importance of deeper,
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strategic, and ongoing work.
DEI is complex and heavily nuanced. Developing a scaled and purposeful DEI strategy is key
to uncovering systemic inequities and creating sustainable change. Developing a strategy
to move towards a culture of DEI creates a better environment for employees, allowing
them to thrive and providing numerous organizational benefits.
HR, thrust into the spotlight

HR’s role in business continuity planning (BCP) could be what separates the organizations
that thrive despite crises from those left behind. Ensure HR has the expertise and resilience
needed to contribute effectively to BCP.
Being a strategic HR partner is a journey, and results won’t come overnight. It’s never too
late to start. Start getting ready for the next crisis now.
5
Key
insights
Remote work: the office of the future?
Adapt, adjust, succeed. Making structural changes to enable remote work for the mid-term
is important even if permanent work-from-home (WFH) isn’t on the horizon for your
organization. Remote work caused by the pandemic will continue, so why not adjust to
ensure its success?
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It took a pandemic to show that WFH can work for many more roles than previously
thought. Organizations that do not maintain this flexibility going forward will be left behind
when it comes to retaining talent.
Digital transformation: accelerated

Digital transformation is here to stay. Quick fixes and band-aids were enough to survive last
year, but long term, proactive action is required to support organizations staying digital and
outperforming their peers.
When HR’s involvement in selecting and implementing technology to respond to the

pandemic went up, so did HR effectiveness (n=421). As more HR technologies become
required for organizations, to best leverage them to support digital transformation, HR can’t
afford to be left out of the selection and implementation process.
6
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HR functions have been remarkably resilient in the face of enormous disruption to operating
environments, the increased urgency of diversity, equity, and inclusion (DEI) priorities, the role of
HR, remote work, and digital transformation. Overall HR headcount and HR to organizational
HR
FTE ratio remain similar to the previous year. Recruiting continues to be HR’s #1 priority, with
DEI emerging as a top-five priority.
In 2020, having documented strategies played a critical role in improving HR effectiveness, a
testament to the value of having strategic plans in place prior to facing a crisis like the COVID-19
in 2021
pandemic. Perceived HR effectiveness, while still low overall, has gone up year-over-year
according to both HR and non-HR professionals. This is likely due to the important role HR
played in navigating the disruptions brought on by 2020. However, there is still room for HR to
grow and improve.
7
Despite the pandemic, HR’s headcount
is not expected to decrease in 2021

Expected Change in HR Headcount Current Average Distribution of HR’s Time
100% Growing Across Activities
80%
No change Talent Acquisition 16%
60%
Shrinking Ensuring Compliance
40% With Policies & Laws/Regulations 13%
20% Strategic HR Planning 10%
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0%
2018 2019 2020 2021 Employee & Labor Relations 10%
n=336 n=478 n=465 n=420
Learning & Development 9%
the average % of HR work that is not Talent Management 9%

the average % of full-time done in-house (including contractors,
71% employees in an HR department. 20% vendors, and outsourcers). Engagement & Culture 8%
n=477 n=414
Total Rewards 8%
2021 HR to FTE Ratio by Organization Size Organizational Development 6%
Diversity, Equity, and Inclusion 5%

Small Medium Large Technology & Operations 4%
1:31 1:56 1:97
Other 2% n=494
n=436
8
Recruiting remains the top priority
challenge year-over-year, with DEI

breaking into the top five
Top priorities of Top priorities of
organizations in 2020 n=365 organizations in 2021 N=850
01 Recruiting 01 Recruiting
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02 Developing leaders 02 Developing leaders
03 Controlling labor costs and maximizing labor spend 03 Controlling labor costs and maximizing labor spend
04 Supporting change 04 Diversity, equity, and inclusion

Tie
04 Providing a great employee experience 05 Providing a great employee experience
06 Facilitating data-driven people decisions
Fostering an environment of diversity, equity, Surprisingly, despite the amount of change in the
and inclusion was only eighth on the list in 2020. past year, supporting change dropped down to
number seven.
9
HR is less effective in the eyes of
non-HR respondents
% difference between HR rating and non-HR’s
rating of HR departments highly effective at… N=850
Diversity, equity, and inclusion 6%

HR Effectiveness Developing the organization's leaders 2%
45%
-1% Enabling learning & development
-3% Enabling innovation
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-4% Facilitating data-driven people decisions

-7% Recruiting
-7% Controlling labor costs
-12% Developing a business continuity plan
of HR respondents rate their HR -14% Rapidly moving internal employees
department as highly effective (n=456), -14% Providing a great employee experience
a 7% increase since last year (n=473), -15% Providing a great candidate experience
-18% Supporting change
compared to just 26% of non-HR -18% Fostering a positive labor relations climate
professionals (n=394). -23% Fostering collaboration within HR
Those who are highly effective at developing and maintaining a business

continuity plan and providing a great employee experience have greater
organizational performance.
10
Having documented strategies increases
HR effectiveness
66%
61%
<50%
of HR departments have an
56%
51% 52% 52% overarching talent strategy.
% Highly Effective
45% n=431
35%
31%
15%
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Has a strategy 24%
Does not have a of HR departments have no

strategy functional area strategies.
n=431
Talent Acquisition Employee HR Analytics Diversity, Equity, and Learning and

Engagement Inclusion Development n=425
Organizational
% with a specific
Performance
Performance goes down when
functional area 43% 49% 15% 38% 55% there are no functional area
strategy
strategies in place.
n=431 n=413
11
The surge in social action and support for Black

Lives Matter, the #MeToo movement, and
Indigenous rights has forced organizations to look
at how their own practices reflect and perpetuate
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social inequities and systemic racism.
The pandemic surfaced even more challenges

around diversity, equity, and inclusion (DEI):
DEI is at the
childcare, accessibility in a remote world, and
wellbeing are all more critical than ever before. HR
has an instrumental role in challenging
forefront of the
organizational norms and leading the shift towards
DEI in the workplace that will help retain the top
talent and realize the many benefits of a diverse
conversation
workforce. This change won’t happen overnight so
there’s no time to waste in getting started – the
time to make DEI a strategic priority is now.
12
Organizations are
increasingly focused on
creating a diverse, equitable,
and inclusive environment
Organizations have put a greater
Many organizations took immediate action this year to implement new practices to help create an environment emphasis on DEI in the last year. In
of DEI. This quick response helped signal to employees and investors that the organization supports DEI and is 2021, only 6% of organizations say
willing to make changes. they are not focusing on DEI,
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What are organizations doing to create an environment of DEI? compared to 25% in 2020.
60 2020 2021
50 n=456 n=415
40
30 25% 6%
20
10
0 2020 2021
n=439 n=415
Purposefully sourcing Providing inclusion Tracking and reporting on Creating employee Purposefully establishing
diverse groups of training to managers or DEI metrics resource groups diverse project teams
candidates employees across the organization
These few organizations that are
still not taking action to create an
Focusing on increasing diversity through sourcing may seem like an easy fix for organizations, but it environment of DEI are more likely
requires parallel action to create an inclusive culture. Without that, diverse employees will remain excluded to be experiencing higher voluntary
and organizations will struggle to make true progress in DEI. turnover.
13
Yet DEI practices with the greatest
impact are being overlooked

While the previously mentioned practices do not significantly impact organizational or DEI
performance, the following practices are associated with higher organizational performance
and/or DEI performance. Despite these benefits, the percentage of organizations implementing
these practices has barely changed since 2020:
Change year-over-year
Identifying and addressing pay gaps (or inequities) for

3%
Organizational
performance
underrepresented groups The lack of focus on these critical practices

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suggests the increased emphasis on DEI has been

largely based on speed rather than impact.
Embedding inclusive behaviors into values or competencies 0% However, without taking the time and effort to
strategically implement the practices that target the
organization’s culture of equity and inclusion in
Evaluating inclusive leadership behaviors as part of the addition to diversity, little will change.
-2%
DEI performance
performance appraisal process
Insight: Creating and sustaining an

Clearly articulating the link between DEI and
organizational goals -1% environment of DEI can’t be done with
only quick-wins and band-aid
solutions. Don’t overlook the
Structuring interviews to mitigate bias 4% n=415
importance of deeper, strategic, and
ongoing work.
14
The pandemic has created unique
challenges for accessibility and inclusivity

New programs or services to support employees' mental
59% health and wellbeing
(e.g. Employee Assistance Programs (EAP))
Accessibility challenges brought on by
Support for employees who are the pandemic vary for each employee
57% unable to return or fear returning to the depending on their individual
workplace due to the pandemic characteristics and how those
What is your
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organization intersect (e.g. socioeconomic status,

Support/resources for employees age, physical ability, neurodiversity).
offering to improve 51% or candidates in roles that require
accessibility during internet access
the pandemic? While many organizations rose to the
occasion by supporting their
n=445 Training for managers on accommodations or employees through challenges
36% benefits to help adapt to the new working
resulting from the pandemic, there’s
environment
still plenty of room for improvement.
15% Stipends for home office expenses If you are not yet offering supports to
improve accessibility, by implementing
some of these practices you can
These offerings are associated These offerings are associated improve the employee experience and
with a greater employee experience with higher DEI performance DEI performance at your organization.
15
Organizations rose to the challenge of
expanding supports for parents during

the pandemic
Parents experienced a unique set Organizations are helping parents navigate personal and
of challenges. business responsibilities by providing supports such as:
Previous arrangements for childcare were disrupted by
the closing of schools, daycares, and recreation 2020 2021
centers. Remote work is further complicated for
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parents who now have children at home. 56 Flexible work options

56% 73%
76%
%
The negative impacts on parents
are significant.
Work-life balance, career progression, and earnings 45%
45% 62%
64% Counseling support (e.g. EAP)
(for those taking time off) are all challenges for
parents. Furthermore, women are disproportionately
impacted, with childcare expectations often falling to Reduced hours for parents taking on temporary childcare
N/A 37%
38%
them. In the US, nearly 8x more women left the responsibilities due to COVID-19 restrictions
workforce in September 2020 than men1, suggesting Holding jobs for parents taking on temporary childcare
N/A 36%
they may be disproportionately taking on childcare responsibilities due to COVID-19 restrictions
responsibilities while schools and daycares remain
closed or virtual. Organizations providing these supports are more likely
n=437
1“Employment Situation Summary.” U.S. Bureau of Labor Statistics, to be providing a greater employee experience.
06 Nov. 2020, Accessed 23 Nov. 2020.
16
However, organizational DEI practices
are often compliance focused and lack

leadership commitment
Fewer than half of organizations have leadership The DEI efforts of more than 2 out of 5 organizations are only
that is committed to modeling inclusive behaviors 47% focused on compliance and meeting legislated minimum
and champions DEI efforts in the organization. n=352 requirements, and initiatives occur only on an ad hoc basis.
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40%
n=352 Focusing on compliance is a good starting
Don’t neglect the importance of leadership’s
commitment to modeling inclusive behavior. point, but organizations need to go beyond
This is associated with: that given the current DEI climate.
Overall organizational performance Insight: While it may help to avoid legal

issues, compliance will not, on its own, create
Workforce productivity an environment of DEI. Furthermore, while
Social and environmental sustainability performance isolated, ad hoc initiatives give the impression
of “taking action,” they fail to challenge and
Ability to quickly change to capitalize on new opportunities change embedded norms, processes, and
culture across the organization.
Ability to generate and implement new ideas (innovation) n=160
17
If DEI is truly a priority, defining
a strategy helps focus efforts

and achieve benefits
Workforce productivity n=162
Having a DEI DEI performance n=164

strategy is
associated
with greater: HR effectiveness n=165
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Social and environmental sustainability performance n=160
Yet only 38% of organizations

have a DEI strategy. n=431
These organizations risk missing out on the many benefits a DEI strategy provides.
Insight: DEI is Developing a scaled and purposeful DEI strategy is key to uncovering systemic
inequities and creating sustainable change. Developing a strategy to move
complex and towards a culture of DEI creates a better environment for employees, allowing
heavily nuanced. them to thrive and providing numerous organizational benefits.
18
Actions and Practical Resources

What
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Actions and Practical Resources
comes next? Create a sustainable DEI strategy for your organization by

focusing on employee experiences to uncover and address
systemic inequities.
While the increased attention DEI has received over the past year is promising, Build on your DEI strategy by directing efforts towards
creating an environment of DEI does not happen overnight. Sustaining this embedding inclusion into your culture.
focus and acting strategically will be key.
Equip managers to adopt inclusive leadership behaviors and
Start with creating a defined DEI strategy to set the tone and direction for the create an inclusive environment.
organization. This will anchor all DEI efforts, ensuring they’re sustained in the
long term. Then, focus on incorporating inclusion into your organization’s Train employees to understand diversity, equity, and inclusion
culture to ensure the planned DEI initiatives succeed and the value of a diverse and practice inclusive behaviors with the Foundations of
workforce is realized. Diversity, Equity, and Inclusion eLearning Module.
19
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HR, Over the last decade, organizational priorities and business

models have shifted. People have increasingly been acknowledged
thrust into
as the driving force behind value creation, thrusting HR into the
spotlight.
This has only been accelerated by changes brought on by the
the spotlight
pandemic. Employees are expecting more from their
organizations, and HR’s role is consequentially more far-reaching,
more meaningful, and more stressful than ever.
20
In the face of unprecedented
upheaval, HR's stress levels

continue to rise
+9% 50%
41%
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50%
of HR professionals What is the breaking point?
strongly agree that their HR stress levels were already increasing in the
stress levels have period prior to the pandemic and recent events have
increased. only accelerated that trend.
“I experience higher levels of As stress levels rise

stress related to my job as an HR effectiveness falls
HR professional today HR must be aware of their limits. While it's not
compared to three years ago.” surprising to see increased stress levels in 2020, it's
2020 2021 not without consequences. As stress levels increase

effectiveness drops, and without the right coping
mechanisms, HR risks reaching a breaking point. n=456
n=469 n=456
21
Increased stress is not surprising
given HR’s role is more strategic

than ever before
How is HR involved in the broader
organizational strategy?
HR’s new role
After years of plateaued involvement in strategy, the 44%
report HR as being a partner
50% upheaval of 2020 has thrust HR into its most strategic role
ever. More organizations are acting on their people-first
8%
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40%
promise and involving HR in strategy. Where that happens,
30% organizations have higher effectiveness in quickly changing increase compared to 2020.
n=758
to capitalize on new opportunities and are therefore more
20%
likely to be resilient in uncertain times. Unfortunately, there
10% are HR teams that are still not involved with strategy: 14%
of HR departments in small organizations are not involved, When HR is a partner,
0%
2017 2018 2019 2020 2021 versus 8% of HR departments in all organizations. organizations are
1.7x more likely to be

n=790 n=710 n=854 n=718 n=758
What comes next?
A partner in planning and executing strategy
Is this change in partnership solely a reaction to the highly effective at quickly
Asked for input into planning, involved in executing strategy
pandemic and social movements or have organizations changing to capitalize on
Involved in executing strategy after it is developed finally recognized the impact HR’s involvement in strategy new ideas.
Not involved with the strategy can have on better preparing for the future? n=745
22
HR’s role in business continuity planning
is key to maintaining organizational

performance in a crisis
HR has become a vital part of business As this year has shown us, crises are an inevitable part of
continuity planning organizational life. These low-likelihood, high-impact events are
sudden, unpredictable, and temporary.
31% 3%
Organizations are using business continuity planning (BCP) to enable
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HR is not involved in business continuity planning operations to resume after a disruption. BCP can no longer be solely
about operations when HR’s strategic involvement is vital:
HR is playing a larger role than before
n=423
HR effectiveness at
Organizations where HR is more
enabling business
HR is playing a smaller role than before effective at enabling the
continuity
development and maintenance of
HR is playing the same role as before
BCP also have greater organizational
2% performance.
65%
Organization performance n=732
42% of HR departments are highly Insight: HR’s role in BCP could be what separates
the organizations that thrive despite crises from
effective at enabling the development those left behind. Ensure HR has the expertise and
and maintenance of a business continuity plan. n=759 resilience needed to contribute effectively to BCP.
23
It’s not too late! To prepare for the next
crisis, HR needs to incorporate scenario

planning in BCP
Scenario planning is a key part of BCP. It involves
creating plans for different potential future scenarios.
Insight: Being a strategic HR partner is a journey, and results won’t come overnight.
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It’s never too late to start being strategic. Start getting ready for the next crisis now. The organizations where HR was proactive are seeing
the payoff for their efforts now. But that doesn’t mean
that it’s too late to start for those who weren’t
When did HR start creating proactive in the past.
scenario plans?
HR departments who created HR departments who have started
More than a year ago 17% scenario plans more than a year creating scenario plans within the past
ago are: year are:
Starting in the next year 18%
Started creating
within the past year
36%
1.7x more likely to have a highly
effective HR department n=362 1.3x more likely to have a highly
effective HR department n=344
No plans to start
scenario planning
28%
2x more likely to be highly effective at
enabling business continuity n=342 1.5x more likely to be highly effective
at enabling business continuity n=338
24
Despite an increased involvement in
strategic activities, HR's decision-making

power hasn’t changed
Most HR decisions (both day-to-day and long term) are 14%
made by leadership outside of HR. 30%
Responsibility for
Non-HR respondents reported that almost 25% of day-to-day and long-term HR decisions are
20% n=801 day-to-day decisions
HR’s responsibility versus HR respondents who reported that 40% of HR decisions fell to them. n=823
about the workforce
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Where non-HR makes HR decisions, 36% Executive leadership

effectiveness goes down. Management outside of HR
When non-HR executive leadership and management make decisions about HR, both day-to-day Corporate HR
and long term, HR effectiveness goes down. n=823 Field HR
8%
Responsibility for
long-term decisions
Insight: There is a disconnect on where short- and long-term HR 27%
n=799 53%
about HR programs &
decision-making authority lies. HR and non-HR must clarify where the HR resource
allocation
decision-making power lies and empower HR to make decisions to ensure 12%
that HR is as effective as possible.
25
Effective HR decision making has often
involved prioritizing organizational

outcomes
We’re all tired of “HR needs to “At my organization, HR's priority is expected to be to protect
get a seat at the table,” because and further the interest of the organization rather than to
HR is already there, but what did support employees.”
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24%
it take to get there? 16% 13% 13% 9%
7% 8% 7%
2% 2%
n=455
It took focusing on organizational outcomes Disagree Balanced Agree
and connecting HR’s strategy to (1-3) (4-7) (8-10)
organizational priorities.
“My role as an HR professional requires me to focus entirely on
However, in the past year, the seismic shifts employee needs rather than organizational needs.”
21%
in society have led to more balance between 15% 12% 14% 10%
8% 8% 7%
organizational and employee needs. 4% 2%
n=456
Disagree Balanced Agree
(1-3) (4-7) (8-10)
26
But the pandemic has changed
the way HR balances priorities

How has the pandemic changed the way HR balances
employee needs with organizational needs?
When there was a greater
There has been a shift towards HR balancing focus on employee needs
There is a greater focus
61% employee needs with organizational needs rather than organizational
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on employee needs
more since the pandemic. needs since the pandemic,
organizations were:
Yet 22% of organizations have a
There is a greater focus
1.5x
22% greater focus on organizational More likely to be high performing in
on organizational needs
needs over employee needs. overall organizational performance
n=426
1.4x
No change 17%
More likely to be high performing
in workforce productivity
n=445 n=421
27
Unsurprisingly, the
employee experience
improves when the balance
is skewed towards
employee needs
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Organizations who have highly effective

employee experiences are 3.8x more likely
to disagree that HR prioritizes Insight: Employee experience isn’t just
organizational interests over employee fluff – don’t risk losing the benefits of an
support. n=236 effective employee experience. A positive
employee experience is associated with:
This was magnified by the social upheavals
of 2020, where many types of workers, who Workforce productivity
were previously marginalized, were
revealed to play essential roles in keeping Organizational performance
society functioning. The lack of total
rewards and respect accorded to these Ability to change quickly
employees highlighted the importance of a
Innovation
greater focus on employee needs. n=834
28
What
comes next? Actions and Practical Resources
Review best-practice solutions to identify resilience
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As HR stress levels rise, and HR’s role becomes more strategic, HR needs to techniques that are most suitable to your organizational
focus on itself, in addition to focusing on the organization. culture and employee needs.
First, develop personal and team-wide resilience techniques to ensure HR is Proactively prepare the organization’s talent for the risks of
equipped to manage increasing stress levels. tomorrow by uncovering HR initiatives to implement today.
Next, to contribute the most to business continuity planning and strategic Navigate the pandemic with a flexible talent strategy, a
planning, HR needs to be prepared to recognize the talent implications for the practical guide to scenario planning to weather uncertainty.
different possible scenarios and provide strategies to address those
implications. Create a simplified process that addresses both
department-wide and individual employee development
Finally, to maximize HR’s contribution to organizational performance, HR will needs by systematically developing your HR department.
need to clarify where the decision-making power lies for HR-related decisions
and balance organizational needs with employee needs.
29
The pandemic and resulting emergency work-from-home

measures highlighted how many roles can be performed just as
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well, if not better, remotely. However, the traditional approach to

work is so entrenched many organizations are still resistant to
making the shift permanent due to fears of impacts on culture,
Remote work:
communication, and innovation. Employees also share mixed
feelings. While the increased flexibility has been very beneficial
for some, others are struggling with the loss of social
the office of
connections, suboptimal work environments, and the blurred line
between work and personal life.
It is not realistic to expect a full return to how and where work
the future?
was done pre-pandemic. As many organizations continue to offer
work-from-home (WFH) options in 2021 and beyond, the
conversation around remote work is far from over.
30
Remote work isn’t going
away anytime soon

What is your organization's plan for WFH in 2021? n=401
37% Eligible employees WFH some days

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36% Eligible employees WFH full-time
14% All employees WFH some days
As the pandemic continues, many

All employees
5% WFH full-time
organizations are still reducing onsite work.
Though there is no one-size-fits-all solution

No WFH
9% permitted for WFH, more than 9 out of 10 organizations
are planning on implementing or continuing
some form of WFH in 2021.
31
A permanent shift to
remote work is on the

horizon for many
While it’s clear remote work isn’t Emergency WFH challenged norms
disappearing any time soon, will Prior to the pandemic, there were high amounts of skepticism around remote work. Myths,
the changes be permanent? entrenched norms, and inertia have previously curtailed the pursuit of more permanent WFH
programs. The emergency WFH measures brought on by the pandemic have challenged this
perspective, proving that many roles are capable of being performed remotely.
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Nearly half of organizations

report that 50% or more of However, some leaders are still resistant
their roles are capable of There is still a lack of enthusiastic support around the prospect of permanent remote work, with
being performed remotely 24% of senior leadership being against it (n=668). One potential cause for this resistance is the
on a permanent basis. n=428 belief that the traditional approach to work is the most effective. Yet if employees have been
successfully working remotely throughout the pandemic and want to continue, denying them
the opportunity to do so permanently without proper justification may be perceived as unfair.
of senior leadership at these
organizations are very open Insight: It took a pandemic to show that WFH can work for many more roles than previously
57% to the option of some roles thought. Organizations that do not maintain this flexibility going forward will be left behind
when it comes to retaining talent.
being performed remotely
on a permanent basis. n=188
32
Yet many organizations are not making
structural changes to enable remote work

Flatter structures
Changes to
core hours
19% 12% Smaller teams

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9% Despite many organizations continuing WFH in 2021, few are

making changes to increase suitability of roles, work, or
teams for remote work. Many organizations are still stuck in a
28% Organizations
reactive, short-term mindset, seeing remote work as a
measure that simply needs to be waited out. However, this
looking at making 8% pandemic has changed the WFH landscape so drastically that
the following it is highly unlikely to go back to the way it was before.
Project-based changes Smaller
structures (e.g. Agile) n=568 satellite office
Insight: Adapt, adjust, succeed.
Even if permanent WFH isn’t on the horizon for your
49%
organization, making some of these changes for the mid-term
are not making changes will help. Remote work caused by the pandemic will continue,
to roles, work, or teams. why not adjust to ensure its success?
33
Some organizations kept an eye on the
impact of remote work on engagement

Keep an eye on the pulse… How has measurement of
employee engagement changed
56 Over one in three organizations have started or increased over the past 12 months?
% the frequency of measuring engagement
Just started
measuring
While engagement increased 13% at the beginning of the pandemic from March to May Decreased
(McLean & Company’s Pandemic Survey Report, 2020; N=16,615), organizations must continue frequency
McLean & Company
to monitor it. It is more crucial than ever to keep an eye on engagement as the novelty of Not measured 7%
13%
remote work wears off. If engagement starts to dip, organizations must be able to catch it early,
allowing HR and leaders to intervene and respond to employee needs before it begins to 14%
negatively impact performance.
Increased
30% n=422
…or risk negative consequences % highly effective at providing frequency
a great employee experience n=421
More than one in four are still
not measuring engagement or 57% -9%
are doing so less frequently. 48%
36%
These organizations risk negatively impacting their No change
employee experience. Increased frequency Decreased frequency
or not measuring
34
Engaging new hires should always have
been a priority, emergency WFH simply

accelerated it
Actions organizations have taken to acclimate new hires to In 2020, over two-thirds of
organizational culture during the pandemic n=419 organizations conducted online
onboarding/orientation
(McLean & Company’s Pandemic Survey Report, 2020;
McLean & Company
N=190). Online onboarding challenges, such as lack of

social connection and difficulty learning organizational
42% 29%
30% culture, can be overcome by implementing the actions on
this slide to acclimate new hires.
34% 26%
Still, over one in four organizations
aren’t taking any additional actions.
These organizations need to proactively look at making
Increasing the number Increasing the amount of
these changes and prepare for a more virtual future or risk
of formal social interaction new hires have disengagement and turnover with their new hires.
touchpoints with peers with senior leaders
Formalizing cultural norms No additional actions
through training, policies, or Implementing a taken to acclimate Associated with a greater
other documentation mentor/buddy system new hires employee experience
35
The new reality of work demands
revisiting your employee value

proposition (EVP)
Most organizations realize the
importance of keeping their
EVP up to date
29%
McLean & Company
Not planning to revisit the EVP

71% of organizations with EVPs
35% have recently revisited or are
Recently revisited the EVP (in the past year) planning to revisit their EVP due to
Planning to revisit the EVP in the long term recent changes in working
(>6 months out) environment.
Planning to revisit EVP in the next 6 months
18% 18% Yet 29% are not revisiting their
EVPs and risk misrepresenting the
organization. This may result in
attracting the wrong candidates or
An EVP provides many benefits if it is an accurate depiction of the employee experience. hiring people whose expectations
As organizations continue to adapt working environments to the pandemic and shift won’t be met.
towards remote work, it is important to update the EVP to reflect the new reality. n=371
36
What
Create a planned, integrated, and supported program to
McLean & Company
The emergency WFH measures taken at the beginning of the pandemic are not sustain WFH in the new normal.
sustainable in the long term. With remote work continuing into 2021 and
Equip managers to effectively manage virtual teams to
beyond for many organizations, changes must be made to ensure success.
ensure remote employees are supported.
First, organizations must transition existing short-term emergency WFH Protect organizational viability in the short and long
arrangements into a clearly defined and integrated long-term WFH approach. term by maintaining employee engagement during the
COVID-19 pandemic.
Next, ensure the approach is supported by keeping an eye on employee
Develop solutions to adapt your onboarding process to
engagement and adjusting related programs such as onboarding to suit the new
a virtual environment.
virtual environment.
Attract and retain the right talent by updating or
Finally, revisit how the organization positions itself in its employee value uncovering the organization’s employee value
proposition and employer brand to ensure it accurately reflects the new way proposition to highlight strengths such as a WFH
work is being done. program.
37
Digital transformation, the investment or adoption

McLean & Company
of new technology or business models, has been

trending for the past few decades. Experts have
been predicting widespread digital transformation
Digital
each year. Who could have imagined that it would
take a pandemic to accelerate digital
transformation?
transformation:
Last year, our 2020 HR Trends Report found 30% of
HR respondents were not taking any action to
support digital transformation (n=419). In 2021,
accelerated
inaction is no longer an option. Digital
transformation is here, and if not faced head on,
your organization will be left behind.
38
Quick fixes have supported digital
transformation, but to survive long term

HR will need to do more
What is HR doing to support digital transformation?
46%
McLean & Company
38% 38%
28% 26% 24% 24% 21% 21% 22%
Training on virtual Supporting change Providing training on Creating a new HR Supporting Analyzing the Developing Training employees Equipping leaders to Nothing
communication and management of virtual people strategy technologies for employee skills gap employees on new in specific new skills lead in agile
teamwork digital disruption management digital collaboration competencies environments
Associated with: Facilitating data-driven decisions Innovation Supporting change
Insight: Digital transformation is here to stay. Reactive quick fixes and band-
aids were enough to survive 2020, but long term, proactive action is required to
support organizations staying digital and outperforming their peers. n=414
39
Now is not the time to
pause; HR needs to
continue supporting digital
transformation
In 2020, the third most common HR action
36% to support digital transformation was taking
30% no action at all! While the number of HR
McLean & Company
28% departments not acting has decreased from

22% 30% to 22%, there has also been a decrease
in other HR actions. Most significantly, 8%
fewer organizations are creating a new
talent strategy. n=414
Creating an HR strategy Taking no action 2020 2021
In the disruption of 2020, seeing a decline in long-term actions like creating a talent strategy is not
surprising as organizations relied on short-term solutions to address immediate needs.
However, long-term actions like analyzing the skills gap and training employees on the new skills will
provide even greater benefits: higher performance in innovation, supporting change, and data-driven
decision making.
40
Sudden digital transformation
put competencies to the test

Year-over-year, we continue to see low
High change management
proficiency in the competencies of the future.
proficiency is correlated with: These competencies can enable the
Change Management Innovation implementation of new technologies and
processes – critical to navigating uncertainty.
13%
13%
21% 5.4 Data-driven decision making Change management decreased significantly
since last year. While some organizations may
*significant decrease over 2020 Employee experience have considered themselves highly proficient
during normal times, when faced with great
McLean & Company
Digital Literacy Emotional Intelligence uncertainty the proficiency in change

management required is much higher than
25% 15% anticipated.
26% 6.1 18%
5.6 Change fatigue is another possible cause of
decreased proficiency. HR needs to combat
Resilience Agile Scrum Methodology organizational change fatigue with a change
sustainment plan and help improve
25% 16% proficiency levels of change management to
29% 6.3 16%
5.0 reap the benefits.
% Highly 2021
Inclusion Design Thinking Proficient 2020
25% 13%
Not asked in 2020
6.0 14%
5.1 Average
Proficiency 2021 (1-10)
41
n=418
Employee-centric
competencies
drive performance
Emotional Intelligence n=427
Helping leaders become better leaders by getting
them to understand how uncertain times can have an
impact on employees is correlated with:
McLean & Company
Innovation
Inclusion n=429
Employee experience Ensuring accountability by embedding inclusion into
work practices, behaviors, and values throughout the
Developing the organization’s leaders organization is correlated with:
Fostering an environment of DEI Insight: Digital transformation

competencies that enable a deeper
Employee experience
Design Thinking n=400 understanding of individual employee
From user experience to employee experience, design Developing the organization’s leaders needs (e.g. inclusion, design thinking,
thinking is about designing moments that matter and emotional intelligence) have the
is correlated with: greatest impact on performance. Drive
Innovation performance by focusing the
organization on employee-centric
Developing the organization’s leaders competencies.
42
Continuous learning is foundational to
a digitally mature workforce

To improve proficiency on the competencies of the future, a focus on continuous What is HR doing to
learning is required. In fact, not focusing on enabling continuous learning is
negatively correlated with proficiency on all the competencies of the future (n=406). enable continuous learning
in your organization?
Unfortunately, HR actions to enable continuous learning have decreased across
0% 20% 40% 60%
the board year-over-year, except for actions that put the onus on employees for
McLean & Company
Allocating time dedicated to learning

continuous learning (see * on chart). HR shouldn’t discount other actions, which
Supporting the creation of individual
have benefits such as: development plans (IDP)
Implementing a continuous
Greater effectiveness at enabling learning & development (n=437). learning competency
Encouraging leaders to
role model this behavior
Greater effectiveness at developing the organization’s leaders (n=435).
Significantly investing in L&D
* Enabling employee access to

knowledge sharing platforms
Insight: Ultimately, continuous learning is what's going to help Providing formal coaching to leaders
organizations be successful in this new world of work. It’s time for
HR to redouble its efforts on learning and development so the *continuous
Providing individual flexible
education funds
benefits of continuous learning can be realized. Not a focus
2021 2020
n=445 n=456
43
HR technology is now
HR technology expands again:

Certain HR technologies have become
staples (e.g. HRIS) and investment and
planned investment in other technologies mainstream – leverage it to
is rising. The shift to remote work has
accelerated the investment in many support digital transformation
technologies year-over-year, with the
greatest increases occurring in
technologies directly connected to
% of HR Departments With Investment or Planned
working remotely: Investment in HR Technology n=438
increase year-over-year in learning

43% technology systems
McLean & Company
increase year-over-year in
23% workforce management software
HR’s involvement in HR
technology is critical:
Despite being the main users of the
technology and ultimately facilitating
its adoption and use, one in five HR Insight: Where HR’s involvement in selecting and implementing technology to respond to the pandemic
teams were not involved in the went up, so did HR effectiveness (n=421). As more HR technologies become required for organizations, to
selection and rollout of technology to best leverage them to support digital transformation, HR can’t afford to be left out of the selection and
respond to the pandemic (n=421). implementation process.
44
What
Use ready-to-deploy tools to develop key competencies of the
With remote work stretching out into the future and digital transformation here future like design thinking, change management, inclusion, and
McLean & Company
to stay, HR will need to take a more proactive approach to address impacts of resilience.
the accelerated move online.
Take a proven approach to driving HR effectiveness through
First, identify and prioritize the competencies that will best support digital learning by developing a holistic L&D strategy and
transformation and drive performance, such as change management, emotional adopting continuous learning.
intelligence, and inclusion. Identify the competencies that fit best for your
organization by analyzing the skills gap. Effectively prepare for the changing business landscape by
embedding an iterative process to identify the future skills needed
Next, improve continuous learning to enhance the effectiveness of leadership and the gap with current skills in the workforce to execute
development initiatives and increase workforce proficiencies in the prioritized organizational and talent strategies.
competencies.
Adopt a holistic perspective of HR systems. Evaluate the current
Finally, support the technologies that drive digital collaboration and productivity state of your organization’s HRIS, understand pain points, and
as these are the HR actions that will best enable digital transformation. identify ideal processes prior to choosing a solution.
45
Leverage feedback
to drive performance
Optimize the HR Department for Success
HR Stakeholder Management Survey
Align HR initiatives with business strategy and stakeholder needs.
HR Management & Governance

Improve HR’s core functions and drive project success.
McLean & Company
Improve Employee Experience and HR Processes

New Hire Survey
Ensure recruiting and onboarding programs are effective by surveying new employees.
Employee Engagement
Move beyond measuring job satisfaction with a comprehensive view of engagement.
McLean Employee Experience Monitor

Evolve to leader-driven engagement with a real-time dashboard and results.
Employee Exit Survey

Understand why people leave the organization in order to proactively retain top talent.
Build an evidence-based HR
strategy while gathering insights 360 Degree Feedback
throughout the employee lifecycle. Empower employees with a holistic view of their performance to prioritize development.
View our diagnostic programs for DEI Diagnostic:
more information. Leverage DEI data to inform your evidence-based DEI strategy and initiatives
46
London, ON
Corporate Headquarters
345 Ridout Street North
London, Ontario, N6A 2N8
Toronto, ON
888 Yonge Street
McLean & Company is a research and advisory firm providing practical solutions to human Toronto, Ontario, M4W 2J2
resources challenges via executable research, tools, and advice that have a clear and
measurable impact on your business. Las Vegas, NV
3960 Howard Hughes Parkway,
McLean & Company
Our research team uses a rigorous research process to identify and hone best practices; Suite 500
Las Vegas, NV, USA, 89169
create practical tools, templates, and policies; and supply clients with the insight and
guidance of our subject matter experts. McLean & Company applies this proven research Sydney, Australia
approach to both human resources and company management teams, creating complete Level 4, 20 Hunter Street
solutions that supply the tools you need to get each project done right. Sydney, NSW, Australia
2060
McLean & Company analysts bring real-world experience to the table and apply their
knowledge to solving the challenges faced by our clients on a daily basis. This process is
informed by the participation of a client base that includes over 30,000 members and by an
evolving client-driven research agenda. North America: 1-877-281-0480
International: +1-519-936-2659
McLean & Company is a division of Info-Tech Research Group Inc. mcleanco.com
47

HR HR Trends Report For 2021

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2021

Note: Graph totals may not add up to 100% due to rounding.

Key terms used throughout this report include:

Highly Effective: Association & Relationship

N=850 (unless otherwise noted)

Organization size Turnover rates Role Top seven industries

Seniority Location Is your workforce unionized?

strategic, and ongoing work.

HR, thrust into the spotlight

Digital transformation: accelerated

When HR’s involvement in selecting and implementing technology to respond to the

is not expected to decrease in 2021

the average % of HR work that is not Talent Management 9%

2021 HR to FTE Ratio by Organization Size Organizational Development 6%

Diversity, Equity, and Inclusion 5%

challenge year-over-year, with DEI

02 Developing leaders 02 Developing leaders

04 Supporting change 04 Diversity, equity, and inclusion

04 Providing a great employee experience 05 Providing a great employee experience

06 Facilitating data-driven people decisions

Diversity, equity, and inclusion 6%

-4% Facilitating data-driven people decisions

Those who are highly effective at developing and maintaining a business

Has a strategy 24%

Does not have a of HR departments have no

Talent Acquisition Employee HR Analytics Diversity, Equity, and Learning and

The surge in social action and support for Black

social inequities and systemic racism.

The pandemic surfaced even more challenges

impact are being overlooked

Identifying and addressing pay gaps (or inequities) for

underrepresented groups The lack of focus on these critical practices

suggests the increased emphasis on DEI has been

performance appraisal process

Insight: Creating and sustaining an

challenges for accessibility and inclusivity

organization intersect (e.g. socioeconomic status,

expanding supports for parents during

parents who now have children at home. 56 Flexible work options

are often compliance focused and lack

Overall organizational performance Insight: While it may help to avoid legal

a strategy helps focus efforts

Having a DEI DEI performance n=164

Social and environmental sustainability performance n=160

Yet only 38% of organizations

Actions and Practical Resources

Actions and Practical Resources

comes next? Create a sustainable DEI strategy for your organization by

HR, Over the last decade, organizational priorities and business

This has only been accelerated by changes brought on by the

upheaval, HR's stress levels

“I experience higher levels of As stress levels rise

2020 2021 not without consequences. As stress levels increase

given HR’s role is more strategic

1.7x more likely to be

is key to maintaining organizational

crisis, HR needs to incorporate scenario

strategic activities, HR's decision-making

Where non-HR makes HR decisions, 36% Executive leadership

involved prioritizing organizational

the way HR balances priorities

Organizations who have highly effective

The pandemic and resulting emergency work-from-home