Employee engagement, top-talent retention and leadership development continue to lead the list of concerns keeping HR executives up at night.
Sleepless nights are no doubt growing more common in today's challenging economic and business environment. They're certainly being experienced by human resource professionals, who, for the past three years, we've been tracking through our annual What's Keeping HR Leaders Up at Night? survey.
This year, 416 readers who responded to the 2012 online survey let us know what's occupying their darkest hours before the dawn -- from the biggest challenges being faced by HR and how they are dealing with them to how they themselves are holding up under the stress. We also reached out to several HR executives and experts in the field to gauge their reactions to the results.
Not surprisingly, the three big challenges facing HR leaders today are employee engagement, retaining key talent and leadership development, which have also been the leading HR challenges reported over the last three years.
"Ensuring employees remain engaged and productive" (34 percent) topped the list, but was slightly down from 41 percent in 2011, putting it more on equal footing with "retaining key talent as the economy recovers" (33 percent, the same as last year) and "developing leaders" (32 percent, up from 28 percent in 2011). The other top priorities included "aligning people strategies to business objectives," which clocked in at 30 percent this year, nearly the same as in 2011. One noteworthy change was a decline in the importance of controlling healthcare costs (24 percent this year versus 29 percent in 2011).
This all tracks well with the experience of Thomas B. Crane, chief human resources and communications officer for Skanska USA Inc., based in New York. The global construction group has 35 offices in the United States, and it's Crane's job to lead 49 HR managers and specialists as well as seven communications office staff. He sees a lot of correlation between his dual career in HR and communications: Both jobs depend on strong two-way communication and have the potential to keep you up at night.
At Skanska, he says, the order of priorities is slightly different: By focusing on developing leaders first, employees remain engaged and the firm retains its top employees. "Our philosophy here is that if we develop great leaders and great bosses, then [engagement and retention] will come with it, so we spend a lot of time on leadership development and helping folks understand what it means to be a great boss," Crane says.
Skanska's one-day "Great Boss" course is taken by all layers of managers and employees, which underscores the company's philosophy that good leadership behaviors and strong two-way communication are primary drivers of a healthy culture.
Many of the respondents say they're worried about losing top talent when the recovery takes hold: 19 percent say they are "extremely concerned," with another 72 percent saying they're "concerned" or "moderately concerned." In 2011, 21 percent said they were "extremely concerned" and a combined 66 percent said they were "concerned" or "moderately concerned."
Ken Meyers, senior vice president of organizational transformation and people development at Lake Forest, Ill.-based Hospira, cautions, however, that linking retention of top employees to the fear that they'll leave when the economy recovers is a false connection.
"Those top 20 percent are going to get new opportunities regardless of the economy," he says. Instead, his company is focusing on changing the balance so the top performers and high-potentials want to stay, no matter what. The key to ensuring this, he says, is to have the leadership answer the question, " 'What do we need to do to retain and develop our most critical talent?' "
Jack Smalley, director of HR learning and development at Express Employment Professionals, agrees with Meyers that protecting, engaging and retaining top talent should be a critical part of an organization's business strategy, when it may not have been in the past .
"The old business model was to do whatever it took to get to No. 1," says Smalley, who works out of Oklahoma City. "Today's model is that anybody can get to No. 1 with a product, [but the challenge is] how do you stay No. 1? I think the ability to stay No. 1 in a changing market is to protect your knowledge base, and I think that's where HR has got to get senior management on the same page."
That concern shows up in the survey results again this year. "Increasing employee communication" continues to be a top-level priority (60 percent) for boosting employee retention, followed closely by "providing employees with additional training and development" (57 percent) and "assisting employees in their career development" (46 percent).
The 2012 responders say they think employee morale and engagement in their organizations is "neutral" (48 percent), "strong" (31 percent) or "extremely strong" (4 percent) -- all of which are largely unchanged compared to 2011 and 2010.
According to Kevin Sheridan, senior vice president of HR optimization for Avatar HR Solutions and author of the New York Times best-selling book, Building a Magnetic Culture, studies confirm there's a lot of angst in the workplace. "There are a lot of people who have gone through a perfect storm of disengagement where their salary was frozen, their bonus was taken away, the opportunities were cut and they're not happy about it," he says. "That does not portend good things when the economy gets better."
Which leads us to the challenge of the generations. In the survey, slightly more respondents than last year (43 percent versus 36 percent) say they foresee baby boomers retiring in greater numbers as the recovery takes hold.
Preparing for that brain drain by establishing a pipeline of Gen X and millennial workers is the next challenge, says Smalley. About two-thirds of the nation's 77 million baby boomers are in the U.S. workforce today, compared to only half of the millennial generation; the other half are "at home with mom and dad, getting their master's degrees or married in stable households," he says.
Being squeezed in between are Gen X employees, who've had to wait an extra five to 10 years for boomers to retire while competing with millennials, who are on the way up. "We'll see the millennials infiltrate the workforce even more because the workforce is looking to replace these boomers," Smalley says, as well as "bring in people at lower wages."
"Companies have two choices," he adds. "We can wait until the hand is dealt us or we can get into a proactive, preventive maintenance mode and change the workforce to attract and retain the millennials."
For some industries, such as construction, having a good spread of experience in the workforce is critical. Says Crane of Skanska, "We have five generations in the workforce in the U.S. and that's OK to us, as long as we can make sure ... that knowledge is being passed to those [upcoming generations of leaders] because that's important for the longevity of the business."
Still Stressed Out
Over the past 18 months, the respondents say, their level of stress in their job has "stayed the same" (22 percent), "changed somewhat" (46 percent) or "changed dramatically" (27 percent). That's on par with 2011's numbers, but down from a high of 33 percent saying their stress had dramatically changed in the 2010 survey. Not much of a change in the last three years, but a change nonetheless.
On a related question, some 37 percent say they have an average level of work/life balance; that number is slightly up from both 2011 (34 percent) and 2010 (33 percent). That still leaves just 6 percent reporting that their work/life balance is "very balanced," with another 29 percent reporting it as "well balanced."
Those positive results may have something to do with people who choose HR as a career, says Crane: "The industry tends to attract people who are good at self-management," he says. "The ones who are very calm in the middle of the chaos are the ones who do very well in our industry [and] are great multiple-project jugglers, so it's already in their DNA to be able to handle multiple tasks, and clients and stakeholders."
Christy McLeod, HR director of the Americas for Vistakon, a division of Jacksonville, Fla.-based Johnson & Johnson's Vision Care operation, adds there's "a lot going on in all of our worlds and it's easy to let it go out of balance."
Many of the survey results resonated with her, she says -- developing leaders, strategic focus, change management, employee engagement -- but she was especially interested to see that wellness as a concern came out frequently in the results and comments.
Like many of the survey respondents, she says her own "stress level is about the same," but that J&J's Energy for Performance and Life program has helped create a common language in her company's culture, enabling more work/life integration.
Instead of teaching employees how to manage time, the program teaches them how to manage their energy, from a nutrition and exercise perspective as well as from a spiritual and a mission perspective. "It's about making sure that each employee is aligned on all those fronts so that they can bring their best self to work.
"The J&J culture is very supportive of personal life and family life," says McLeod, "and by introducing these principles, as long we are attaining the goals and objectives of the business, we are able to have that balance.
"Life is not marathon -- it's a series of sprints," she says. "If you experience periods of stress, you need to take breaks to rest yourself. Although the stress has remained about the same, I feel that I'm better equipped to handle it."
Many companies are missing out on one of the best ways to defeat stress, Sheridan adds, and HR can help implement it: Have fun. "The average 5-year-old laughs 113 times a day, while the average 44-year-old laughs a mere 11 times a day," he says. "We're not laughing enough. We're not having enough fun as we could be [having]."
Fun can be a good strategy to develop stronger team bonds, get employees involved in service projects, or just relax during enjoyable outings, and it all pays off through an improved culture. "If you promote fun in workplace, it helps lower the stress level and improves productivity," he says.
Perhaps it might even render a better night's sleep.
See these charts that show survey results.