There is no doubt that most organizations faced falling employee engagement measures last year.
We all knew that 2009 had been a challenging economic year and that we may have cut a little too deep or managed our communications poorly as we rolled out pay freezes, forced furloughs, staff reductions, and slashed benefits programs. But last year, the impact of those decisions started to come home to roost – engagement surveys were sent out and numbers were down.
Solution providers in the space were quick to share that numbers were down and highlight the possible storm clouds on the horizon, leading to reduced performance and turn-over in high-potentials and critical talent roles. Some examples:
Last year was the calm before the storm; voluntary turnover rates were way below average as employees hunkered down and waited for the economy to chug back to life.
This year, searches are up – candidates are on the market, and if your employee engagement scores were down last year and you didn’t take advantage of the time to address concerns – you’d better believe your best talent is on the market today.
Most HR leaders were already aware of the hazard. With or without their employee surveys, they were aware that morale was low and business performance was at risk. They shared their concerns with leadership when decisions were made, and they expected the employee survey data to support their warnings. But some HR leaders faced an unexpected challenge when employee engagement scores came in for 2010: Engagement data wasn’t low enough!
You might be scratching your head at this point, but keep in mind that HR professionals have many ways to assess employee engagement: Glassdoor.com, exit interviews, manager complaints, employee relations issues, customer complaints, and so forth. So when employee surveys come back with only slightly lower scores, or even worse, flat engagement scores, and they know from these other sources that engagement has plummeted, many feel it might be time to re-think their approach to assessing and reporting on employee engagement.
Even when employee engagement scores matched HR expectations, HR is being challenged to develop a more strategic approach to assessing and managing employee engagement.
In our 2010 survey on Talent and Learning measurement, 71 percent of HR leaders with an executive level scorecard, ranked Employee Engagement as a key metric in their HR scorecards. It was the number one metric selected by all participants, coming ahead of more traditional HR metrics such as retention rates and performance ratings.
In taking a fresh look at this important topic, many HR leaders are looking at both their current solution providers as well as their own internal approach to engagement. Many are questioning their current practices; including benchmarking, engagement drivers, analysis models and even the role of employee engagement in assessing leadership roles and company culture. They are also looking for solution providers who can partner strategically on these questions and help them develop a complete engagement strategy.
In the last three weeks, I’ve had four different member calls on employee engagement – they were looking for insights on where we saw this market heading. Many were thinking about replacing their current solution providers, some were just trying to figure out how to partner more closely, while others were looking to increase the strategic connection between their employee engagement efforts and meaningful outcomes for their business and talent strategies. For example:
They hadn’t considered asking their current enterprise employee engagement partner for help with this challenge; something our research showed was a valuable first step. Most of the employee engagement vendors in the market have a ton of best practices on how to connect engagement data to actions at the divisional level. Often corporate HR functions select only minimal services from their solution providers or worse neglect to include them on critical discussions concerning the enterprise engagement strategy.
These conversations highlighted a few challenges companies are facing today:
For me most of the questions come back to the need for an Employee Engagement Strategy? Knowing what you expect to accomplish with your engagement efforts and the role you expect your partner to play in these efforts is critical. Our research found that organizations who had documented a full employee engagement strategy were able to answer:
The market is changing and decisions concerning the use of employee engagement data to influence business and talent decisions are weighing heavily on HR leaders today. As engagement scores continue to show up on executive score cards, board-level documents, or even in analyst reviews concerning the health and wellness of an organizations talent, companies are looking for confirmation that HR can prove the validity of their engagement efforts.
No two companies are alike, and as such no single employee engagement strategy or solution provider meets the needs of every company. Our research found organizations that had very strategic relationships with their solution providers, many lasting more than a decade, with solid data supporting the impact of their efforts. While other organizations were taking painful steps to change not only their approach to engagement, but their solution providers as well. None of these decisions were made lightly.
Our research on this topic, Employee Engagement: A Changing Market Place, provides insights on what is driving these market changes, the growing importance of this measure in the talent management space, as well as details on employee engagement strategies, key solution provider questions, and selection best practices.