Low employee engagement costs the global economy $8.8tn per year, the equivalent of 9% of global gross domestic product, according to workplace consulting and research firm Gallup.
Part of this huge bill boils down to the fact that at a time of widespread labour and skills shortages, many employees simply choose to move on if they are unhappy. But they are costly to replace. Personal finance company Nerdwallet estimates that when employing someone on the UK average salary of £32,760, recruiters will charge you about £6,552 for the pleasure.
There is no disputing that staff turnover rates are on the up. Since 2019, they have risen by an average of 7.7%, and are predicted to increase even further during 2023 to an estimated 35.6%, research by HR software provider Remote reveals.
As to why this situation is taking place, Gartner’s Labour market survey for the first quarter of 2023 shows the number one reason people are quitting is inadequate compensation (35.7%). Next on the list is feeling they are not respected (31.1%), followed by manager quality (28.9%).
But as John Kostoulas, the research and consulting firm’s vice-president analyst, points out, such figures are no more than an average. In other words, drivers of staff turnover vary widely from organisation to organisation, and even from geography to geography in large companies. This fact, he says, is important for IT leaders to consider before even starting to evaluate which tech solutions could be deployed to help the situation.
“Before you embark on a tech journey, be clear about the questions you need answered and problem you need to solve – what are your organisation’s top three to five drivers of attrition? It’s a foundational step and is super-important,” says Kostoulas.
Iain Moffat, chief delivery officer at HR software and services provider MHR, agrees. “It’s important to focus on outcomes rather than solutions,” he says. “If you’re recruiting people who aren’t a good fit, you need to know what you mean by a ‘good recruit’ rather than saying ‘we want a portal that makes it easy for 100 people a day to apply’.”
Ensuring employee engagement
Useful in helping IT leaders understand such problems is technology to capture employees’ input and feedback on issues, such as whether they intend to stay and what would encourage them to do so. Options here include experience management platforms, such those provided by Glint and Qualtrics, as well as traditional engagement surveys, regular pulse surveys and focus groups.
Indeed, since introducing an experience management platform more than two years ago, Melanie Hayes, chief people officer at tech recruitment and digital services consultancy Nash Squared, says she has seen “real improvements in retention”.
“Employee engagement is linked to retention, and tools like this are useful to measure sentiment, identify potential issues, needs and wants, and act on them,” she says. “But these things change all the time, so it’s also important to keep on listening and responding.”
Once organisational challenges have been clearly identified, it’s then much easier for IT leaders to source appropriate applications to tackle specific problems and prioritise action, especially if budgets are tight.
“If compensation is an issue, there are solutions on the market to provide a wider choice of more relevant benefits or support flexible pay,” says Kostoulas. “If it’s about manager quality, there are tools to support their professional development or automate some of their admin tasks.”
The idea here, he adds, is that “solutions abound, but as with everything, if you don’t know where you want to go, it’s easy to get lost along the way”.
Another important consideration is ensuring users are engaged in the process from the outset, not least to ensure the ultimate tech deployment is fit for purpose and easy to use. “Usability is paramount, so it’s important to bring in an employee or manager who’s not in IT or HR to say whether they’d use the solution without moaning or needing lots of training,” Kostoulas points out.
The importance of effective communication
Just as vital is a wider communications plan. “People launch things and think it will be OK, but you have to communicate consistently and show you’re listening and acting,” says Hayes. “That’s because it’s important for everyone to understand why you’re doing something and what they can expect to get out of it.”
But it’s also crucial for IT and HR leaders, who often feel they come from very different worlds, to find ways of cooperating effectively.
“It starts with an appreciation on both sides that neither can solve these problems alone,” says Kostoulas. “It has to be an ongoing partnership, not just a one-off project, but IT can help HR by being a sounding board for framing the problem to understand what it is they want to solve.”
Case study: STL
Staff retention is all about creating a positive experience at all phases of the employee lifecycle, which optimally means creating a “high-tech but high [human] touch environment”, says Anjali Byce, chief HR officer at STL.
The fibre optic cable manufacturing company began focusing more closely on employee experience issues during the so-called Great Resignation, which started in early 2021 in the wake of various pandemic-related lockdowns.
The starting point was to enhance the recruitment experience by automating the hiring and onboarding process as much as possible. This was important, says Byce, because “if you get the right person in the right place, it’s the best way to avoid problems later on”.
To this end, the company implemented RippleHire’s Talent Acquisition Cloud to provide a consistent candidate experience from start to finish.
Litmusblox.io’s artificial intelligence (AI)-based candidate screening system was also rolled out to rank suitable contenders for interview based on their skills and capabilities. The aim here was to make the process more “speedy and fair”.
A third new system was Leena AI’s conversational AI-based system, which was introduced to make the employee onboarding and offboarding process more effective and efficient.
If the organisation does not have an HR IT team in place, IT leaders can also help by “cutting through the vendor noise”, translating it into understandable terms and clarifying where value can be found. The aim here is to help HR professionals make sound purchasing decisions.
A key challenge for IT, though, warns Kostoulas, is that technology is all too often seen as a silver bullet.
“The expectation is that the organisation will buy technology and people suddenly won’t leave the company any more,” he says. “This means setting realistic expectations and framing the problem in a narrower way than simply ‘we want to reduce attrition’ is essential – so if manager quality is a driver, recommend a solution to upskill them or help them communicate more effectively.”
Creating a positive employee experience
Another important consideration, meanwhile, was ensuring the supplier had compelling benefits packages in place for each of the 30 nationalities of people it employs. As a result, it introduced Mercer’s Global Mobility tool, which is used by its HR rewards and compensation and benefits teams to gain a real-time view of the most popular benefits across different industries, categories and geographies.
This information is then used to put together “rich benefits packages” for staff, with a key goal of ensuring that “high-potential people stay”, says Byce.
Case study: Investors in People
When employees are working remotely full-time, finding ways of enabling them to feel connected with one another is vital to support staff retention, says Beth Samson, organisational development and people lead at Investors in People.
The organisation, which sets people management accreditation standards, employs 50 people directly, alongside 145 self-employed contractors. But following the pandemic, she noticed that employee engagement scores had started to dip, which was a concern, as it’s one of the precursors of attrition.
As a result, she undertook a series of surveys and also held focus groups with various staff members to understand what was going on. They revealed that the drop in engagement was due to a combination of factors.
“All the change the organisation had gone through with the pandemic, which included a move to remote working, was having a cascading impact,” says Samson. “Responsibilities had become less clear, there were new line manager structures, which meant people were getting to know new managers, and there were changes to the leadership team, which led to an overall sense of fatigue and was having an impact on well-being.”
But the single biggest issue, which was brought about by remote working, was a lower sense of employee connection. An “easy win” here was simply to ensure everyone had adequate equipment allowances to ensure they had the “right kit” and were not forced into finding workarounds. Another was to be “more intentional” in how the organisation exploited it.
“We found we didn’t need new and better systems, just better use of our existing technology,” says Samson. “We looked at how we were using each platform, such as email and Teams, and considered carefully how we could use each of them to foster better connection.”
Also in the pipeline is a revamp of the firm’s rewards programme, which is being migrated online to make it more consistent across all locations. Over the year ahead, the move will enable individual employees or teams to collect rewards points that can be used for discounted access to a personalised range of products, services and experiences, such as hang gliding or cookery classes.
The aim of such activity, says Byce, is to “ensure we create an environment and culture where people want to stay”. While no one single piece of technology is enough to achieve this in and of itself, the secret is to implement it judiciously to build up a positive employee experience overall.
“It’s about creating a high-tech but high-touch environment where the human experience is a warm one, irrespective of individual managers,” says Byce. “The human touch should always be included in tech enablement and there needs to be a human face to it – always.”
Using tech more effectively to boost employee connection
Formal meetings, for example, are held using the Microsoft Teams communication and collaboration platform. Salesforce’s Slack instant messaging app, on the other hand, is employed to replace “coffee conversations” and stimulate discussion across different teams.
Features such as Slack’s BirthdayBot are now also used to acknowledge employees’ anniversaries and act as a conversation starter. The random pairing of people for non-work-related chats at designated times is also enabled by its Donut app.
The Microsoft Viva Insights analytics function in Teams, meanwhile, has proven a useful tool for Samson personally to create a visual representation of the organisation and understand whom she has engaged with most lately. The aim here is to ensure she makes a “conscious effort to check in” with those she hasn’t.
Interestingly, she says: “People feel much more comfortable talking to me and the rest of the senior leadership team these days, as working virtually has democratised contact and people now get a response quickly rather than having to make an appointment with the CEO or whoever.”
The upshot of this situation, taken together with activities such as Feedback Fridays and quarterly face-to-face “whole team” days, is that people now appear to feel more connected again. Four out of five employees agree their role enables them to work collaboratively with other teams, compared with just over half two years ago, while trust in senior leaders has more than doubled from 41% in 2021 to 90% this year.
Samson concludes: “People are unanimous that they’re happier working from home and sickness absence levels have gone down as a result. The focus for us has been how to make the best possible employee experience for people, and tech has played a huge part in that.”