Engagement Still Top HR Concern

Latest poll of HR leaders’ top worries shows keeping employees on board, and keeping them happy and productive, remains at the top of the list, though approaches for doing that are -- surprisingly -- declining in their abilities to deliver results.

By Kristen B. Frasch

In the ever-growing minefield of HR leaders’ worries -- be they regulatory, administrative or even personal -- determining which one tops the list is hardly a clear-cut task. But, going by Human Resource Executive®’s latest "What’s Keeping HR Up at Night?" survey, keeping employees engaged and productive is still the hands-down leader among all other headaches.

Although the percentage of the 323 HRE readers responding to the poll who listed as their No. 1 HR challenge "ensuring employees remain engaged and productive" went from 39 percent in 2015 to 33 percent this year, it still remains their top worry.

What’s more, asked to "assess the current state of employee morale and engagement" in their organizations, there is clear indication they sense engagement levels going down. On a scale from 1 to 5, with 5 being extremely strong morale and engagement, those choosing 4 and 5 went down while those choosing 2 and 3 went up. In other words, the lower numbers gained while the higher ones -- indications of happy workforces -- declined.

Surprisingly, however, actual strategies being launched by HR executives to turn that happiness factor around and keep people on board appear to be declining in popularity. When asked what steps they and their organizations are taking in the next 12 months to boost employee engagement and retention, only three such steps out of 12 showed an increase: enhancing employee-benefit offerings (17 percent in 2016 from 15 percent in 2015), increasing/improving leadership/manager training (59 percent in 2016 from 55 percent in 2015), and enhancing or offering wellness programs (31 percent in 2016 from 27 percent in 2015). Everything else -- from changing compensation and enhancing high-potential selection and succession strategies, to increasing employee communication and feedback/recognition -- went down. Whether this was by desire and design or because of a lack of resources is hard to tell.

http://www.hreonline.com/images/ThinkstockPhotos-515654498upatnightL.jpgHanging on to employees is another key concern, with well over half of respondents, 68 percent, coming in at "extremely" or just under "extremely" to the question, "How concerned are you about losing talent over the next 12 months?" That said, though, the loss of baby boomers appears to be less imminent this year than it was a year ago, with 45 percent responding "Yes" to the question "Do you foresee baby boomers retiring in greater numbers in the next 12 to 24 months?" compared to 52 percent who answered in the affirmative in 2015. Likewise, 41 percent said "No" in 2016 while 35 percent said "No" last year. So, by power of deduction, HR leaders are probably more worried about losing younger talent than older talent.

And whether that fear has anything to do with increasing or declining workforces is a bit unclear. The responses to both questions "By what percentage did your organization’s workforce increase during the past 18 months?" and "By what percentage did your organization’s workforce decrease during the past 18 months?" were mixed pretty much across the board. For instance, those saying their workforce went up 3 percent to 5 percent took a 7-point drop from 2015 to 2016 (34 percent to 27 percent), yet those saying it went up 6 percent to 10 percent and then 21 percent to 25 percent went up by 5 percentage points each (18 percent to 23 percent and 3 percent to 8 percent, respectively).

In the same token, percentages of workforce decreases took these widely disparate percentage-point jumps: 6 points down for 3 percent to 5 percent, 10 points up for 6 percent to 10 percent, 11 points down for 11 percent to 15 percent, 8 points down for 16 percent to 20 percent, 2 points up for 21 percent to 25 percent and 6 points up for 26 percent or more. So perhaps it’s safe to say that shrinking or expanding workforces isn’t a clear-cut or underlying reason for the engagement and retention concerns.

In terms of areas HR executives find themselves spending the most time, while employee engagement did take a 3 percent drop, from 26 percent in 2015 to 23 percent in 2015, it still represents one of the significant time expenditures for them. Employee relations -- a close cousin of employee engagement -- represents the most time spent in any area in 2016, at 34.4 percent, followed closely by recruiting, at 34 percent. Spending time on leadership development -- another engagement factor, many would argue -- also went up in 2016, to 31 percent from 29 percent in 2015.

Laura Sejen, New York-based managing director of talent and rewards for Willis Towers Watson, says the survey results "align with both our research and what we are hearing from clients." In the United States, she says, "HR leaders are increasingly concerned about attracting and retaining critical-skill employees. . . .  Employers in all industries are [also] concerned about finding and keeping employees with digital skills, [as well as] maintaining productivity levels and improving engagement across the workforce."

Meanwhile, worries about contending with and administering the Affordable Care Act, primarily the pending arrival of the Cadillac Tax in 2020 (albeit delayed by two years), remain. Asked to rate the time, energy and worry the law is having on their organization, those responding "extremely significant" rose from 15 percent last year to 17 percent currently, though responses just under "extremely significant" decreased from 34 percent in 2015 to 28 percent this year.

"While the delay in the Cadillac Tax is a relief, a repeal would really help HR sleep much better," says Brian Marcotte, president and CEO of the Washington-based National Business Group on Health. "The delay only increases the number of companies that will be impacted by the excise tax when it goes into effect in 2020. [We’re finding] more than 50 percent of employers state their plan with the highest enrollment will trigger the tax in 2020 … [clearly,] this is … a tax on all plans, not [just] ‘rich’ plans."

What does all this mean in terms of stress on the job? While one might expect stress levels to increase for HR leaders juggling these challenges, they appear to have remained the same. In fact, those saying it increased dramatically went down one percentage point, from 31 percent last year to 30 percent this year.

At the same time stress levels have remained on a relatively even keel, HR executives’ personal levels of work/life balance have shown some dips. Although those describing their lives as "very well balanced" went up two points from 7 percent in 2015 to 9 percent this year, a far greater number, 27 percent, listed their balance as just under that -- i.e., less than "very well balanced" -- a response that went down from last year’s 30 percent. What’s more, those citing their work/life as "not well balanced" went up three points, from 7 percent in last year to 10 percent this year.

There’s a reason for this, says Sejen. "As the headcounts for corporate headquarters staff and support functions have been tightly managed for many years, the cumulative impact for many HR leaders is they have a very thin team to execute ongoing work and limited resources for taking on any new initiatives or projects," she says. "Unless outside resources can be budgeted, this situation can add to stress for HR executives and can take a toll on their personal work/life balance."

Of equal concern, the profession itself appears to be one HR leaders are less likely this year over last to encourage those near and dear to them to pursue. Asked if they would recommend a career in human resources to one of their children or the child of a sibling or friend, fewer said "yes," 63 percent this year as opposed to 67 percent last year, and more said "no," 18 percent this year as opposed to 15 percent last year.

"The HR environment continues to be a challenging one," says Sejen, "with companies reporting increasing difficulties attracting, retaining and engaging critical workforce segments and with the ongoing impact of globalization and technology.

"Layered on top of these," she says, "are the rapid and significant changes we are seeing in the shift to contract and contingent workers, who present a different set of management challenges relative to traditional full-time or part-time employees.

"All in all [and the survey aside]," she adds, "the fact that close to two-thirds of HR leaders are still willing to recommend a career in HR indicates to me that addressing those challenges can [still] make for an interesting and satisfying career."

(Click here to see the 12 charts from the survey referenced in this story.)

Send questions or comments about this story to hreletters@lrp.com.

 

Apr 7, 2016
Copyright 2017© LRP Publications