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For the first time, HR managers at German companies see a topic at the top of their agenda in 2022 that ranked fifth in the previous year: the shortage of skilled workers, especially in the IT sector. This is the finding of the current study “Trends in Compensation and HR 2022/2023” by management consultancy Lurse. In human resources (HR) departments, however, issues of digitization, leadership, employer branding and talent management are still considered important.

For the annual study, Lurse surveyed HR managers from 244 German companies online between May and August 2022. These are predominantly larger mid-sized companies as well as DAX and MDAX groups from all sectors relevant to Germany: from IT and electronics providers to financial service providers, vehicle manufacturers and plant engineers as well as pharmaceutical, chemical and energy companies.

One challenge – different approaches

In response to the question “How important are the following topics to you in HR work?”, 82% of the companies surveyed this year named the problem of the shortage of skilled workers. This corresponds to an increase of no less than 19% compared to the previous year and catapults the topic from 5th to 1st place in the ranking of the most important HR issues. “This strong increase in importance is understandable in view of the current political situation, high inflation and the decline in Corona measures,” says Birgit Horak, Managing Partner at Lurse. “Companies are telling us about increased fluctuation in a wide variety of fields and a tight recruitment market with significantly increased salary demands and increased starting salaries.”

Skilled labour shortage is most noticeable in the IT sector, with 79% of mentions. Engineering, sales & support and research and development follow at a distance. Almost every second company says it is having difficulty finding trainees or university graduates.

Digitization remains a future topic

Digitization of HR work has remained stable at the top of the ranking of the most important HR trends for years. This year, it moves into a close second place at 80%, but remains as important as ever. Seven out of ten companies expect digitization issues to continue to grow in importance, and 84% are actively addressing them.

“In order to streamline their HR matters, 88% of the companies surveyed have already implemented a Manager Self Service and 91% an Employee Self Service – and the trend is rising,” says Horak. Manager Self Services cover processes such as approving business trips or recruiting external employees, reporting, and performance management, for example, performance appraisals and target agreements. Employee self-services, on the other hand, can simplify vacation requests, the handling of travel expenses and payroll accounting, as well as the administration of working hours.

Leadership post pandemic – a positive assessment

With 73%, leadership remains one of the top 3 HR topics. About two-fifths of the respondents said that their companies’ understanding of leadership had changed over the past few years, and about half expect the issue to become increasingly important in the future.

“The Corona crisis has contributed quite a bit to this – and for the better,” Horak explains. “This is evident from the statements made by several companies.” According to them, virtual collaboration has improved. During the pandemic, it became apparent that leadership can also take place at a distance over a longer period of time. It needs to have a presence, but not be on site all the time. Trust in employees grew during the crisis because collaboration worked well, even without direct contact. Ultimately, good results are more important than being on site in the workplace, according to some of the respondents. Nevertheless, face-to-face collaboration is still seen as important. Despite the opportunities offered by digital workplaces, companies do not want to give up the benefits of direct interaction.

Employer attractiveness and non-monetary benefits

According to the Lurse study, the top ten most important HR trends also include employer branding with 70% of mentions, closely followed by talent management and performance management.

“Employer branding strategies, with which companies increase their attractiveness as an employer, continue to be important for the use of HR tools,” says Philipp Dienstbühl, manager at Lurse. “As was the case last year, work-life balance or the compatibility of family and career is mentioned most frequently with 83%. Especially well-educated professionals increasingly judge companies by non-monetary benefits.”

In an attempt to meet increased salary expectations, many employers are supplementing purely monetary compensation with attractive benefit programs and the targeted development of career models.