January 31, 2018 – Close to half, 47 percent, of the human resources leaders surveyed for a new report say that employee retention and turnover is their top workforce management challenge. This is the third straight year that this issue has topped the concerns cited in the annual study by the Society for Human Resource Management (SHRM) and Globoforce, a human capital management software company.
“This year’s survey confirms (that) many medium- and large-sized companies are still struggling to retain employees in an economy that’s increasingly defined by gig workers and job hoppers, rather than lifelong employees,” said the report, “Designing Work Cultures for the Human Era.”
Recruitment followed as the second biggest challenge, according to 36 percent of the 738 HR leaders who were surveyed for the study. Culture management was close behind at 34 percent.
“HR as a profession is undergoing a profound shift,” said the report. “Once solely focused on how to manage people as disposable resources, the human era is energizing HR leaders to be the culture keepers of their organizations. Every aspect of a company’s culture – from how employees are recognized and developed to how life events are celebrated – is being reimagined to drive greater business impact and bring more humanity to everyone’s experience at work.”
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The SHRM-Globoforce report pointed to a range of approaches that HR leaders are applying to improve their workplaces. Seventy five percent of the respondents said their companies currently have initiatives in place around positive relationships and teamwork. Other efforts center on having a compassionate, caring culture (75 percent), employee appreciation (73 percent), learning and growth opportunities (70 percent) and creating an inclusive culture (72 percent).
Human-centered efforts, like ongoing peer feedback, frequent performance reviews and recognition tied to core values have been particularly effective, said the report. Celebrating employees’ life events has also helped HR leaders improve their retention and recruitment efforts.
“Continuous peer feedback and recognition, as well as a supportive feedback environment, have the power to help organizations drive employee growth and development,” said Derek Irvine, Globoforce’s vice president of strategy and consulting.
“As our study shows, HR professionals are still dissatisfied with the accuracy of traditional performance reviews,” he said. “Reward and performance strategies need to be reimagined so they help fulfill employees’ basic human needs of appreciation and connection. Social recognition programs alongside more human-centered practices have the power to not only strengthen relationships between employees, but also employees’ overall connections to the companies they work for.”
Recruitment, for its part, has climbed to second on the HR leaders’ list of concerns, up from third in last year’s report. There were six million job openings in October, up from 5.5 million in 2016, said the SHRM-Globoforce study, citing Bureau of Labor statistics.
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One way to boost recruitment efforts, said the report, is through workplace culture awards that rank company culture based on factors like employee reviews and benefits. Organizations that invested one percent or more of their payroll on employee recognition, the report said, were more than twice as likely to receive a workplace award.
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Employee referrals are also invaluable in improving a company’s time to hire. The challenge is to imbue employees with a positive view of the company. “Although most organizations fall into the ‘good place to work’ category regardless of their investment in employee recognition, the chances of reaching ‘best place to work’ status dramatically increase as organizations invest more in employee recognition,” said the report.
Organizations with recognition programs funded at one percent or more of their payrolls were likely to be considered best places to work by their employees, said 34 percent of the HR leaders. For those companies that invested less than one percent or none at all, only 11 percent of the respondents felt their employees viewed their company as a best place to work.
Managing the Culture
Culture management, meanwhile, also climbed in the rankings of top challenges for HR leaders, moving from fifth in 2016 to third last year. “Arguably, one of the most important aspects of organizational culture is how HR and top management approach employee growth and development,” said the report. “Is the process uninspiring and antiquated? Or does it come from a place of positivity – setting employees up for success through frequent conversations and collaboration?”
About half (51 percent) of the HR professionals surveyed believe that their current performance appraisal process is accurate, said the study. On the other hand, HR professionals who conduct semiannual or more frequent reviews are 1.5 times more likely to agree they are an accurate appraisal of employees’ work, compared to organizations that conduct annual reviews.
“More frequent reviews fit the agile, fast-paced nature of the modern workplace, and it’s much easier to evaluate performance over the past few months than over an entire year,” said the report. “One potential way to take the burden out of the process is through peer feedback. Organizations that rely on more frequent performance reviews are more likely to use peer feedback, either ongoing or intermittently….”
“Even if an organization is not quite ready to forgo the traditional performance review, HR professionals can consider adopting frequent peer feedback as a supplement to improve the quality of conversations and employee development over the course of the year.”
Celebrating Life Events
Another approach to catering to what the SHRM/Globoforce study calls “the whole human at work” is to celebrate employee life events, such as a new marriage, buying a house or having a child. “This ties into a broader initiative by forward-thinking companies to create work environments that allow people to bring their whole self to work,” said the report.
Sixty percent of the HR leaders surveyed said that their organizations are involved in helping employees celebrate life events. About one third (32 percent) said they leave it to employees, teams or departments to decide how or whether to celebrate.
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Eighty one percent of the HR leaders said they felt that their employees were very or somewhat satisfied if their organization provides a place to share photos and news of life events with their co-workers, said the survey. Employees also seem to show approval of organizations that: provide a card or gift for employees experiencing certain life events (80 percent), provide budget/supplies/ food for celebrations (78 percent), leave it to employees/teams/departments to decide how or whether to celebrate (65 percent).
To understand how effective different celebrations are, the report’s follow-up question was, “Overall, how satisfied do you think employees are with the way life events are celebrated at your organization?”
The Whole Human
The respondents said that employees are nearly twice as likely to agree their company is a good place to work when they are “very or somewhat satisfied” with how life events are celebrated (64 percent), said the report, compared to those who are very or somewhat dissatisfied (35 percent.)
“While HR may have traditionally shied away from activities that support work/life blending, this year’s survey makes a business case for celebrating the whole human at work,” said the study. “Creating a community celebration of life events can help instill a sense of belonging and humanize employer brands, making them more attractive to potential and future hires.”
The recognition report, now in its sixth year, was commissioned by Globoforce and conducted by SHRM from September 27 to October 18. The survey was sent to randomly selected SHRM members who were employed as managers or above. The final sample was composed of 738 HR professionals who were employed at organizations with a staff size of 500 or more employees.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Will Schatz, Managing Editor – Hunt Scanlon Media