Last year, European companies were mainly concerned with keeping on top of operational HR tasks: payroll calculation, payment and HR service to employees were seen as their main challenges. This year, the needle has shifted, and the focus is more than ever on people. UK employers now consider employee retention and attrition, as well as staff welfare and resilience as their top HR challenges for the coming year.

This is according to an annual employer survey from SD Worx, the HR and payroll specialist. ‘The Future of Work and People’ survey keeps its finger on the pulse of how entrepreneurs and HR professionals look at the future. If one thing is clear from this year’s edition, it’s that there’s a great desire for more people-centric policies across Europe.

In the UK, the top five HR challenges for 2022 are as follows:

• Employee retention and attrition – 45%
• Staff welfare and resilience – 44%
• Employee engagement & experience – 40%
• Staff planning (including flexible workers) – 35%
• Talent attraction and recruitment – 30%

“UK businesses are facing a talent shortage of epic proportions. It is no surprise then to see businesses are investing more time and efforts in their most important assets: their people,” says Colette Philp, UK&I HR Country Head at SD Worx, a leading European HR and payroll services provider.

Striking national differences across Europe
The people focus is noticeable across all European countries in SD Worx’s research survey. However, there are some noticeable national differences. For example, British companies find employee retention and attrition, and staff welfare and resilience the most challenging HR tasks for the coming year as they battle against the Great Resignation crisis. But, their peers in France and Belgium companies worry about how to attract and retain new talent, companies in Germany are concerned about sustainable employment, and Nordic organisations are focused on the welfare and resilience of their employees.

SMEs worry about sustainable employability
When comparing SMEs to mid-sized and large companies across Europe, there are some striking differences in the research. For example, the sustainable employability of employees is of much greater concern for smaller businesses. How can they ensure long, satisfying, and meaningful careers for their staff?

“This could be explained by the fact that there are fewer (vertical) career opportunities in SMEs because the organisation is smaller. That means there’s more challenge in creating meaningful development path, including horizontal and diagonal career moves,” says Cathy Geerts, Chief HR Officer at SD Worx.

Only ‘staff welfare and resilience’ scores higher on the HR challenges list of SMEs. In larger companies, there is the same people focus, but with different emphases: the organisation of teleworking and hybrid working as well as employee retention enter the top five HR challenges, while the war for talent also scores relatively higher.

“In larger companies teleworking is more common and they may have more challenges to keep the colleagues connected to the organisation. We also see more turnover in large enterprises, which explains then why the war for talent is seen as one of their top challenges”, Geerts adds.

Happy, healthy, productive
“To build organisational resilience and to generate true value, business leaders realise they’ll have to connect more directly and deeply with employees”, summarises Geert. “And as employees increasingly take their careers into their own hands, prioritise a healthy work-life balance, and expect everything to happen according to their rhythm and wishes, HR needs to pull out all the stops to keep up. Hence the people focus of today’s HR challenges. Those who can guarantee happy, productive, and healthy employees have the keys to long-term success and keep their talented employees.”