June 28, 2018 – HR leaders across the U.S. have a renewed focus on talent management this year. The second annual report from Paychex, a provider of integrated human capital management solutions for payroll, HR, retirement, and insurance services, both reaffirmed HR’s critical role in shaping company strategy and revealed a sharpened focus on talent management activities that have a meaningful impact on employee engagement and company culture.
“Between the U.S. reaching full employment, significant shifts in societal trends and priorities, and a new generation entering the workforce, HR is uniquely positioned to manage talent in a way that drives higher engagement and better business results,” said Leah Machado, senior director of HR services at Paychex. “For that reason, attracting, engaging, and retaining high-quality talent is more important today than perhaps ever before.”
Advances in technology and evolving employee needs present HR with new challenges every day, but there is good news in the Paychex study: Today’s HR leaders continue to have strategic influence with their organization’s C-suite. Between 2017 and 2018, the same number (80 percent) of HR leaders said they feel they are a strategic partner within their organization and nearly half (44 percent) reported meeting with their CEO, CFO, or both on a weekly basis thus far in 2018.
The Paychex report also showed a commitment to talent management, as 85 percent of the respondents said they are focusing on company culture to drive results. Seventy-seven percent said they feel their current HR technology solution is improving overall employee experience.
Employees today want to be both empowered and engaged, according to the Paychex report. This year, 65 percent of HR leaders reported that at least half of their workforce is engaged, up from 48 percent last year. Of those surveyed, 62 percent of HR leaders said they are measuring employee engagement via pulse surveys throughout the year rather than annually.
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“Staying in touch with the ever-changing needs of your workforce is mandatory in an increasingly competitive human capital landscape,” said Pamela Lacy, Paychex HR consultant. “Many employees today want to work for an employer who has developed a culture of inclusion and diversity, as well as one that offers ample opportunities for career advancement. Supplementing the human touch that is inherent to the HR function with tools and technologies that help to connect the employees to their work in a way they’ve become accustomed to in their personal lives can help HR professionals create an employee experience that rivals top competitors and ultimately improves overall employee engagement.”
Societal trends and priorities are driving changes to employee protection policies, said Paychex. In fact, 83 percent of HR leaders surveyed said they now have a discrimination and harassment policy in place, and 65 percent have updated those policies within the last 12 months. Additionally, 67 percent have re-evaluated their pay practices this year with an eye on gender equality.
“There is no doubt that the #MeToo movement has had an impact on the workplace by opening positive dialogues on pay practices, the work environment and anti-retaliation policies,” said Edwina Maxwell, Paychex human resources coach. “Business leaders today are increasingly attentive to their HR policies and practices and are laser-focused on creating and maintaining workplaces that are free from even the perception of harassment, discrimination or pay inequality.”
In 2017, HR leaders said they were far less likely to be comfortable supporting the HR needs of Millennials when compared to Gen Xers and Baby Boomers, Paychex found. One year later, though, managing the multi-generational workforce seems to have evened out, as perceived support for all generations hovered at around 51 percent. In 2017, 64 percent of HR leaders felt managing the needs of Gen X was a significant challenge, followed by Baby Boomers (57 percent) and Millennials (48 percent).
“Millennial employees now make up the largest segment of the workforce, and our data indicates most organizations feel comfortable in their ability to meet the needs of a Millennial employee,” said Shauna Stute, HR generalist at Paychex. “Generation Z is now entering the job market with new ideas and fresh perspective, leading many HR leaders to shift their focus to learning about the needs and expectations of this new segment.”
Gen Z is more globally connected than any generation that’s come before it. “They generally want to know that their work makes a difference – and not only to their organization, but to society as a whole,” said Ms. Stute. “Savvy employers who quickly learn to harness Gen Z’s passion and ideals have a tremendous opportunity to create loyal, long-term employees.”
Top Tasks for HR
Focusing on employee efficiency jumped ahead of training and development as the top item on HR professionals’ current to-do lists, according to the Paychex report. The study’s top task lists for this year’s HR priorities included:
- Evaluating workplace productivity and efficiency (90 percent)
- Having staff training and development programs (88 percent)
- Focusing on company culture to drive results (85 percent)
Five Things to Consider When Creating a Company Culture
HR executives and recruiters have been using the term “cultural fit” – generally defined as the ability of an employee to fit with the core beliefs, attitudes and behaviors that make up an organization – for a decade or two. And culture shaping is now seen as one of the most important drivers to achieving competitive advantage among companies.
- Training for discrimination and harassment (83 percent)
- Leveraging data to create optimal profiles to attract the right talent (71 percent)
Employee Passion Proliferates
In 2018, Paychex found that 35 percent of leaders reported that half to three-quarters of their employees are engaged, compared to 20 percent in 2017. Engagement was defined in the survey as, “fully absorbed by and enthusiastic about their work and taking positive action to further their company’s reputation and interests.”
Leaders’ top tactics to foster engagement remained the same as last year, according the Paychex report:
- Offer employees training to develop new skills (54 percent).
- Empower employees to suggest new work methods or projects (50 percent).
- Regularly ask employees for feedback about their job satisfaction (49 percent).
Common themes emerged in HR departments across the country in the last year, according to the report. They included:
- Company culture to fuel hiring/retention. The majority of leaders (83 percent) said they focus on company culture to drive results. For many companies, this starts on or before day one — 34 percent said they foster engagement by creating an onboarding experience that accurately conveys company culture.
- Cross-generational support. In 2017, HR leaders were far less likely to be comfortable supporting the HR needs of Millennials when compared to Gen Xers and Baby Boomers. This was not as much of a problem this year, as perceived support for all generations hovered around 51 percent.
- Department growth. HR continues to expand, with more than half of departments planning to add full-time employees this year (up from just over a quarter in 2017), the study said. Only 27 percent of departments are planning on adding part-time workers this year.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media