Glassdoor Workplace Trends for 2022


December 8, 2021

Change has been the only constant over the last two years. With that in mind, what can we expect to see in the workplace in 2022? If 2020 was about crisis response amid a global pandemic, 2021 has been about adapting to challenges ranging from employee burnout and remote work to hiring and retention in a job market defined by labor shortages and unprecedented employee turnover. 

Looking ahead, we believe 2022 will center on navigating the new normal and employees’ elevated power in this tight labor market. Those who succeed will be those companies who embrace the opportunities to rethink old ways of hiring, employee engagement and how business is done.

At Glassdoor, we have a unique window into the experiences of employees and employers. Our insights draw from a rich database of millions of employee reviews, salaries and conversations, which can help distil how employees are feeling and acting. At a time when the job market and workplace are undergoing unprecedented change, we present this report to highlight those emerging trends we believe will come to the fore in 2022.

Trend 1: Hiring won’t be easy in 2022

Labor shortages defined the 2021 job market. As customer demand roared back to life, employers faced acute hiring challenges as workers trickled back into the labor force. The increased competition for workers has made it exceptionally difficult to both hire and retain employees. Employers may be ready to write off the tight 2021 labor market as a pandemic-era anomaly, but they shouldn’t. Instead, 2021 should be a template for what to expect in 2022.

Unlike past recessions, the U.S. has largely skipped the phase of the recovery where employers have a large pool of unemployed workers to hire from. Employer reliance on furloughs kept the pool of available workers relatively small throughout the pandemic. In the chart below, the blue line shows there are only 0.74 unemployed Americans for each job opening, as of September 2021; the green line shows that, excluding temporary layoffs, this ratio is at 0.63 and peaked at 1.2 earlier in the pandemic. This is well below anything seen in previous recessions. When the quicker-than-expected rebound in worker demand arrived in spring 2021, the pandemic-wary workforce caused the ratio of job openings to available workers to become even more skewed.

At this point, it’s unlikely that we will return anytime soon to an earlier point in the recovery where it’s easy to hire. Instead, we are now in the expansion phase of the recovery where employers should expect a slow grind of trying to pull workers from the sidelines back into the labor force rather than snatching up available laid-off workers.

What made hiring difficult in 2021 is unlikely to disappear in 2022: (1) A lingering pandemic that will not disappear overnight, (2) reduced availability of retirees and parents, and (3) a quicker-than-expected recovery in customer demand. The imbalance between labor supply and demand is large enough that even a moderate improvement in conditions would not be enough to make it easy to hire again. There simply is no silver bullet to fix labor shortages. Even previously touted changes like withdrawing enhanced unemployment benefits or school reopenings are unlikely to make a sufficiently large dent to return the job market to a period of easy hiring. Combined with structural shifts shrinking the workforce like an aging population and lower immigration, it will be just as hard to hire and retain workers in 2022 as it was in 2021.

So what lessons of 2021 should employers take into 2022? First, incentives matter. If difficulty in hiring will persist for years, then employers need to think long-term—for example, shifting from offering temporary hiring bonuses to permanent wage increases. Second, not only is it difficult to hire, but record numbers of workers are quitting too. Employee engagement therefore is critical in retaining the workers that employers do have. Last, the late 2010s taught us that employers who think creatively can unlock new talent pools by seeking out overlooked workers like remote workers, recent retirees, workers with disabilities or impairments, or previously incarcerated workers. All-in-all, employers should expect a long period of tight labor markets and it will be the most creative employers who are best able to hire and retain in this environment.

Trend 2: Remote work will boost access to top talent, but at a higher price point

Before the pandemic, remote work was a secret superpower for employers who could offer it, enabling access to a wider talent pool, especially for workers in traditionally overlooked regions. But the pandemic released the remote work genie out of the bottle: it’s now an almost-necessary tool for many employers, which in turn has diluted the recruiting advantage remote employers previously had. Now, many more employers are looking at how to expand their talent pools through remote hiring.

This increased competition means employers need to provide more attractive offers, with many turning to boosting salaries. But this need to raise salaries runs headlong into the location-based pay policies many employers have established. As competition for talent — remote or not — increases, will employers stick to their guns? If Amazon and Microsoft are competing for the same software engineer in a lower cost-of-labor market, will they insist on paying a location-adjusted salary or will they offer a higher salary to prevent top talent from going to a competitor? For example, major tech companies like Reddit and Spotify have already committed to keeping pay constant across different locales.

This also has implications even for employers not offering remote work. Workers who may previously have been plentiful locally now may be swept up by the wave of remote opportunities, which tend to be at larger companies that can afford to offer top dollar. Just as many cities experienced a surge in housing prices with the influx of cash-rich remote workers during the pandemic, the labor market could experience a similar phenomenon, with local employers having to pay more to compete with major companies coming in to scoop up local talent as remote workers. 

Already, employers are seeing an increase in competition from companies hiring remotely. Based on Glassdoor data, 20.4 percent of employers hiring locally in October 2021 are competing against remote jobs, up almost double from 10.3 percent in October 2019.

While the consequences of this increased competition will take time to play out as remote work spreads, two tangible implications should start to show up in 2022: First, more employers (especially in tech) will walk back or reduce location-based pay adjustments as they compete against other employers for top talent. Second, local employers are likely to see rising competition for workers in jobs that can be done remotely, as far-flung employers compete more aggressively for local workers.

Trend 3: Employers will prioritize DE&I action and accountability

In 2020 we saw a swell in calls from employees, job seekers and society at large demanding substantive action from companies on diversity, equity and inclusion (DE&I). While many companies set ambitious goals in response, DE&I efforts now stand at an inflection point as we enter 2022, as employees increasingly expect to see progress from companies and the goodwill engendered by goal-setting or pledges begins to wear thin.

Big tech companies like Apple and Google in recent years were early leaders in reporting out workforce demographics, and now, we’re seeing more companies headed in that direction. Recently, major companies like PricewaterhouseCooper and Boeing, shared DE&I reports for the first time. And more companies, Glassdoor included, are delving deeper, offering both statistics on workforce demographics along with goals and progress.

This shift is driven by employees’ growing appetite for greater transparency. In a survey of users on the professional social networking site Fishbowl by Glassdoor, 58 percent of respondents report that their employers shared DE&I goals, but only 38 percent report receiving any progress updates and 31 percent were unsure. Similarly, only 37 percent report feeling confident that company leadership is truly holding itself accountable to DE&I goals, indicating employees are reserving judgment on whether they believe company DE&I efforts will actually translate into progress.

While employee dissatisfaction may make some employers more hesitant to share DE&I metrics and goals, increased DE&I transparency is a powerful way to highlight progress and incentivize accountability. The shift from transparency to accountability can also help “level up” the conversation. For example, conversations around the gender pay gap have become significantly more sophisticated over the last decade, as more employers and workers become aware of nuances such as the differences between unadjusted and adjusted pay gaps, disparate impacts on women of color, and the ways unconscious bias can feed into unintended discrimination. While transparency alone cannot solve challenges to DE&I, heightened transparency can deepen the conversation, helping to establish, analyze and track gaps while also providing the tools to discuss and learn more about challenges and solutions.

This desire for more transparency is shared by employees and job seekers. A September 2020 Glassdoor survey shows that more than 3 in 4 employees and job seekers (76%) report a diverse workforce is an important factor when evaluating companies and job offers. Companies that don’t invest in DE&I thus risk losing out to competitors—both in terms of failing to communicate commitments on DE&I to employees and job seekers and in developing their ability to meaningfully engage in conversations on solutions. Ultimately, company investments in DE&I efforts are both a social good and a critical part of a company’s workforce management strategy—a particularly salient consideration at a time when finding and retaining talent is so difficult.

Trend 4: Workplace community will expand beyond company walls

The employee-employer bond has intensified over the last decade. Employers increasingly compete for talent by emphasizing employee engagement and workplace experience. The pandemic, however, has made staying connected with increasingly dispersed coworkers and peers more difficult. Many companies previously leaned on the physical office to facilitate this sense of community, offering attractive in-office perks. But what employees miss now is not the office. At a time when the flexibility offered by remote work is valuable for employees, maintaining and enhancing employee connection and community requires special attention from employers.

Forty-eight percent of employees have felt isolated from coworkers during the pandemic, according to a recent Glassdoor survey of U.S. workers. This desire for community stretches beyond the company, reaching others in the industry and profession. The advent of social media has enabled deeper connections with professionals from around the world. This fills a need for employees: 56 percent of workers wish they had a community where they could get career advice for how to deal with problems at work and 64 percent wish they had a way to ask questions of industry peers. This is highlighted by the rapid growth of platforms like Fishbowl by Glassdoor, where the rate of new user growth has tripled during the pandemic.

As the pandemic drags into 2022 and more employees, especially new ones, navigate a remote or hybrid workplace, employees will increasingly turn to coworkers or industry peers to seek out community and get more transparency into their companies and industries. This means recognizing that employees may seek out professional communities outside their employers, or ask their employers to do better in supporting them. Supporting, engaging and retaining employees in the new pandemic era will require being nimble, keeping a pulse on employee needs and responding to feedback in a quickly-changing environment.

Conclusion

While the pandemic is not over, 2021 provided a first glimpse into permanent shifts in the workforce and labor market that we’re facing. The tight labor market is likely to stay with us some time, empowering employees to demand more of their employers. Employees will use their newfound power to seek out more information about their companies and their industries and use that information to push their employers to do better.

Employers have little control over what employees want. But they can get ahead of the curve by recognizing that many employees are looking not just for a job, but for a career and a community. Whether it means investing in DE&I, offering career development opportunities or building community across company and home offices, in the new year it will be more important than ever to focus on employee engagement and the workplace experience.

These investments are critical to empowering employers as they navigate uncharted waters. While the public health situation will hopefully improve, the trajectory of the economy and labor market is uncertain. But it is clear that building a strong playbook for hiring, retention and fostering a more dynamic workplace culture will help companies better navigate turbulent times.

To speak with Daniel Zhao about this report, please contact pr@glassdoor.com. For the latest economics and labor market updates follow @DanielBZhao on Twitter, connect on LinkedIn, and subscribe to Glassdoor Economic Research.