This article features ideas from “Reinventing HR’s Outdated Reputation,” the third installment of our webinar series, For the Love of People. Visit our library of on-demand webinars for more.
It’s no surprise that the current job market has increased employee disconnect at work. Our 2023 State of People Strategy report revealed that employee engagement is the leading priority for HR teams across the globe.
With nearly 50% of employees feel burned out, businesses have to “spend considerable time and resources on making sure that their employees feel connected,” said Kelly Tucker, the managing director of the UK-based consultancy HR Star.
Tucker said if businesses want to thrive, then they must reimagine HR’s role as the key driver of keeping employees engaged and productive.
Effective HR Teams Drive Revenue
Although they don’t sell products or services directly, HR departments drive profits in two ways:
- Recruiting new talent
- Retaining high performers
Both hiring the wrong person and losing an effective contributor are incredibly costly for companies, but it is the second piece that has skyrocketed in importance since the pandemic.
Since mid-2021, the demand for labor has exceeded the supply of available workers. Most recently, the Labor Department estimated there are 1.9 job openings for every unemployed worker, and the majority of people who do switch jobs land higher salaries in their new positions.
But rapid pay increases are rarely a sustainable solution for companies.
“Businesses can’t match inflation and start dishing out 10 to 15% pay raises,” said Tucker. Executives need a better strategy to mitigate turnover and address inflation. This is where HR strategically turns the conversation to employee engagement.
Why Employee Engagement Matters
Money is rarely the only — or even the biggest — reason someone switches jobs. Often, employees start quiet quitting or job hunting on the sly when they experience these factors in the workplace:
- Poor communication: Confusing expectations, inadequate training, or shifting priorities from management can leave employees feeling frustrated and unappreciated.
- Burnout: Employees feel they are overworked with not enough time off.
- Lack of recognition: All criticism and no praise is a recipe for killing motivation.
- Unclear goals: Each employee should have individual professional development milestones and a clear sense of how their work contributes to the company’s vision.
- No growth opportunities: A high-performing employee typically wants new challenges and responsibilities, and they will avoid dead-end jobs with no growth trajectories.
- A culture of ignoring feedback: Employees want to feel valued, and they want their ideas to matter.
If someone loves their job, feels valued, and has a clear career development pathway, they are often willing to stay at a company longer — and put in more effort than disengaged employees.
Challenges Facing Engagement Initiatives
HR leaders may see employee engagement as their highest business priority, but they are likely to face challenges in transforming company culture to help meed that need. Proactive strategies can help HR leaders prepare for these common obstacles.
It has never been more important to have senior leadership buy-in to HR initiatives. HR professionals can take the lead in communication by presenting company leaders with compelling data. Whether it is the financial impact of frequent turnover or the relationship between clear goals and employee performance, data can make the case for valuing engagement.
It’s common for companies to promote high-performing employees to managerial positions, but it is far less common to offer training to those newly-promoted leaders. As a result, many employees work under ineffective managers, and this creates a cycle of disengagement, poor communication, and burnout.
Instead, HR leaders can advocate for strategic management development. A promotion should not just be a recognition of strong performance but also a decision aligned with your overarching business strategy.
If a top-performing employee gets an offer to double their salary at another firm, it’s a tall order to convince them to stay. Still, some employees may turn down a higher salary if they feel engaged enough at their current workplace. Employee assistance programs — like gym memberships or insurance — can strengthen financial compensation, but, more importantly, an employee should feel a purpose at the company.
On the other hand, sometimes the best HR move is to let someone go. If another job simply makes more sense for a top performer, a gracious, smooth offboarding process will leave them with positive impressions and ensure they remain an ambassador for the company in the future. If the winds change, they may end up returning. HR can leave an open door.
In any case, companies should frequently and meaningfully check in with their employees. Many businesses conduct exit interviews, but stay interviews can help HR professionals gather data on why top performers are sticking with the company and what may cause them to leave in the near future.
Red Flags: Why Not Everyone Works Out
Even an effort to retain top performers should not be at all costs — there are some caveats to a retention-focused strategy. Here are two red flags that retaining an employee is not in the company’s best interest.
- Poor performance: Managers should never ignore poor performance. Perhaps the employee needs more training or clarified expectations, but ultimately it makes no sense to offer raises and bonuses to someone who has not met job expectations.
- Disengagement: A detached employee who never gives feedback and does the bare minimum should immediately raise flags. It’s possible they have no interest in a long-term future at the company, but it could also be a sign that their manager has done a poor job creating a safe, engaging workspace. Either way, the situation needs follow-up.
“The businesses that are going to thrive,” said Tucker, “will be the ones that really concentrate on putting investment into their people.”
This article is based on a webinar from Lattice’s For the Love of People Series. To learn more about reinventing HR’s outdated reputation and get additional tips from Tucker, check out the full webinar, “Reinventing HR’s Outdated Reputation.”