Employee Engagement a Strategic HR Imperative for 2014
A recent white paper by PeopleFluent, a talent management software vendor, put together a nice summary of the state of Human Capital Management as we head into 2014. We like its emphasis on employee engagement as a top driver of value that can make HR an important strategic player in any organization.
Of the ten statistics they cite, of course, four come from Gallup’s recent workplace survey dealing with the low level of employee engagement globally. Our take from all of this is that the people-nurturing aspects of HR’s challenges remain the key area where they can raise their game and act strategically.
Here are the ten statistics that PeopleFluent have selected as “key.” See if you agree that these sum up the challenges facing HR executives that need their close attention in 2014:
- According to a Hackett Group study, executives at about 150 large companies indicated that they were either dissatisfied or very dissatisfied with HR performance in terms of “support for business services” nearly 70% of the time. Companies were most unhappy with:
- HR support for collaboration and knowledge sharing (79% dissatisfied/very dissatisfied)
- Retention (70% dissatisfied/very dissatisfied)
1. 61% said that their HR department went through a reorganization or redesign during the past two years – PwC Saratoga Study
2. Nearly three-quarters (of the organizations considering changes to their HR structure)… expect to realize further operational efficiencies. More than half (53%) aim to achieve quality improvements, and another 37% seek cost savings. About one-third (34%) are reorganizing as part of a change in business strategy, and 29% are doing so as part of a globalization initiative.
3. Regardless of (the) reason, almost half (49%) of companies that are changing HR are moving toward a shared services environment with centers of excellence and business partners.
These last two statistics come from a Towers Watson report called HR Service Delivery and Technology Survey (2013).
All of this investment in reorganizing the HR function and increasing its reliance on technology to improve its service delivery points to a consistent effort to raise HR’s strategic role in the acquisition, development and retention of talent. It is a big issue, because the next few statistics highlight where retention efforts remain ineffective:
5. According to Gallup’s 2013 State of the American Workplace report, only 41% of employees feel they know what their company stands for and what makes its brand different from its competitors’ brands.
6. Gallup’s report also finds that 20% of American workers are “actively disengaged” from their jobs, with another 50% “not engaged” in their work (i.e., present but uninspired). That’s 70% of our workforce who are not living up to their potential and who are giving their employers less than their full talents.
7. Gallup also states that the 30% of engaged American employees “come up with most of the innovative ideas, create most of a company’s new customers, and have the most entrepreneurial energy.
8. Active disengagement costs the U.S. $450 billion to $550 billion per year.
We have covered this amazing lack of progress on raising employee engagement elsewhere, so we will simply repeat our mantra: Given the lack of effort most organizations put into raising productivity through employee engagement, it is a competitive imperative to be among the few who do, because you will see the results on your bottom line.
9. Doing performance coaching right means 42% higher productivity.
This last data point came from From Bersin, a friendly competitor of ours. It reflects our own experience, so we think that it measures coaching ROI pretty accurately. We also work a lot on improving team engagement, and see similar results there: An average 50% productivity improvement to team-based initiatives that include a mix of methodologies including coaching.
That’s it (and that’s enough to motivate you, we think!)
There was no tenth statistic in the white paper, so we pinged them to find out what it was. We will alert you when they reply!