Related Solution
HCG HR Solutions
hunel · JaDE · talenx — we propose the right HR solution for your organization.
Solve Complex HR Challenges with HCG
Talk to our experts
Insights
2021 was undeniably Korea's year. From BTS to Squid Game, Korea showcased its strength as a cultural power to the world, and its economic growth rate remained at the top of the G20 advanced economies. Considering that every G7 country except the United States and Canada posted negative growth rates due to COVID, Korea's economic resilience was remarkable.
A large part of this comes down to how well Korean companies responded. True to a nation that is strong in a crisis, they moved quickly — adopting new ways of working, flexible hours, and continuous performance management — to protect their employees from the virus and minimize the impact of COVID.
Alongside this, they also pursued more fundamental strengthening: digital transformation, HR programs tailored to MZ-generation needs, ESG management, and upgraded governance.
According to various forecasts, the global economy in 2022 is expected to grow by 4.5–4.7%, above the historical average (3.4% on average from 2015–2019). But there are still significant uncertainties —
a resurgence of COVID variants, global supply disruptions and logistics delays, regional tensions around Taiwan and Ukraine, exchange-rate and interest-rate increases from tapering, and rising energy and grain prices due to extreme weather.
Now that COVID is entering its third year, the demands and movements around "With Corona" and the "Next Normal" are expected to intensify.
Of course, the speed with which we leave COVID behind and return to daily life will vary by country and by company, depending on how ready each is. From that perspective, rather than taking an entirely new approach, strengthening "Next Normal Readiness" as a continuation of the changes already underway is still a valid direction.
To strengthen "Next Normal Readiness" as an extension of the changes already underway, here are four points HR practitioners should keep their eye on in 2022.
We will not be going back to a world where everyone comes into the office. Both companies and employees have confirmed that the business still runs smoothly under remote work, and that individuals can maintain a good work-life balance. But in many cases, rather than having rules about when or for what roles remote or flexible work is possible, it is still being arranged based on organizational and personal necessity and judgment.
So 2022 is expected to be the year when these are clarified and routinized. Fortunately, companies now have two years of hybrid-work records to reference, so with logical rationale and past data, it should be possible to establish reasonable rules.
And if we can go a step further and also distinguish "work to do internally vs. work to outsource" and "work for people vs. work for machines," all the better.
With the arrival of the Fourth Industrial Revolution, momentum around digital transformation in HR has grown — and with it, active adoption of next-generation HR ERPs grounded in cloud and analytics.
Separately, hybrid work inevitably requires the help of various work-tech tools. We have already experienced the proliferation of tools like Zoom, Teams, WebEx, Slack, and Kakao Works — and the fatigue and inconvenience that come with them. Efforts are beginning to integrate these fragmented tools and technologies to strengthen employee experience and convenience, and 2022 is expected to be the year when these demands and movements become visible.
As one example, Microsoft has built a platform called Viva, and based on Teams, is integrating various solutions like Connections, Insight, Learning, and Topic. Continuous performance management (Goals) and the metaverse (Mesh) are also expected to be implemented soon.
Changes in the labor market and the talent war are asking companies to do more than just source talent from outside — they need to make better use of the people they already have. If in 2021 Korean companies focused on securing top talent through ongoing recruiting, mid-career hiring, and even metaverse recruiting, in 2022 they should also put more attention on retaining and developing talent.
Today, a significant share of employees work remotely, which means they can easily change jobs at any time. Overseas, companies have experienced what is being called "the Great Resignation" — a dramatic rise in departures — since implementing hybrid work. Korean companies have also seen slight year-over-year increases in attrition. The main cause of this rising attrition is, in part, that job searching has become easier thanks to hybrid work, but another major factor is a weakened sense of belonging — so it is an area that deserves continuous attention.
Korea's people-centered HR management — which was often viewed as negative in the past compared with the global practice of job-centered HR — actually has strengths when it comes to developing leaders with integrative perspective. It also delivers many benefits as internal movement becomes more active: stronger cross-departmental collaboration, reduced hiring costs, lower attrition — and it is effective at resolving supply-demand mismatches between divisions. In a time when it is hard to recruit the right talent externally and the risk of headcount reduction is rising, the trend toward activating internal hiring (movement) is expected to strengthen.
For this kind of internal movement and development to truly activate, though, companies need to build an internal labor market (talent market) and a skill taxonomy. That is what lets talent rotation and voluntary reskilling happen on the basis of objective evidence. If such a structure does not yet exist, it needs to be built. If it does, what is further needed is a compensation and development system for core skills, and a feedback loop that ties mid- to long-term business and product strategy to talent and skill acquisition.
As many companies have moved to remote work, they are transitioning from traditional performance management to continuous performance management, and some have introduced innovative approaches like OKRs.
If 2021 was largely about pilots in select businesses and functions, 2022 is likely to be the year when new approaches to performance management spread and normalize across the enterprise.
The talent war and the bonus controversy that began in early 2021 in Pangyo and at IT companies raised the need for compensation tailored to business, job family, and talent — rather than a single, uniform company-wide structure. In other words, compensation systems are likely to become more segmented by employee group, and these changes in employee compensation, combined with the need to narrow the gap between executive and employee pay and to deepen pay-for-performance, are likely to trigger changes in executive compensation as well.
2022 will also require adapting benefits programs — historically designed around on-site work — to fit hybrid work. In recent years, companies have focused on benefits centered on the assumption of coming into the office: a pleasant work environment, plentiful food, a variety of things to enjoy. But as hybrid work becomes more common, the demand for benefits that employees can enjoy while working from home will grow much stronger.
Looking back, it is hard to remember a year when the outlook on the environment was as unclear as it is for 2022. Perhaps the biggest lesson COVID has taught us is this: "Rather than trying to predict and respond to the future, the best we can do is build the capability to adapt to whatever future shows up."
This aligns with the core management themes of the past few years — adaptability and resilience.
HR has been trying to strengthen its position as a business partner to the CEO for years. In many cases, that effort has fallen short — but the current threat of COVID is, paradoxically, becoming a good opportunity. According to a recent overseas study, employee trust in HR has varied significantly depending on HR's role and response since the arrival of COVID. The result may be obvious common sense, but it is also a call for HR practitioners to raise their game.
All of us are exhausted from confronting and responding to changes we were not prepared for, and HR has been on the front line of those changes. To every HR practitioner who has quietly led and supported these changes, I want to offer my encouragement.
And at the latter stages of what has felt like an endless tunnel called COVID, I want to ask them to keep going — to protect both the company and its employees from risk until the very end, and to guide them into a new world.