It’s no surprise that employee engagement numbers have been abysmal for the last few years (and if that is a surprise, you need to read our blog more often.) According to Gallup, engaged employees comprise only around 30% of the workforce. No wonder this post on 2016 workplace engagement trends was so popular.
Until engagement numbers dramatically increase, we are going to continue presenting these trends. By the looks of things, this will be a long term project. Here is what the experts are saying we can expect for employee engagement in 2017:
In their latest State of the American Workplace Report, Gallup shares that over 33% of the workforce is engaged. While this may seem like a negative (and it is), these numbers are still an improvement over recent years. In 2013, the level of US workforce engagement was under 30%. A ten percent increase in employee engagement in just three years is very encouraging.
So why the rise in engagement? Is it a shift in performance management strategy, or advances in HR technology? Gallup feels that shifts in engagement depend on “factors related to an organization’s performance management and human capital strategies”.
Note: If you don’t have the time to unpack Gallup’s full 2016 report, 34Strong has created this series of blog posts to help you digest the key learnings and employee engagement statistics.
In their latest report, Predictions for 2017: Everything Is Becoming Digital, Bersin by Deloitte is focused on how technology continues to change our lives and workplace cultures. The ubiquity of mobile devices means that we are always on, sending and receiving messages and accessing seemingly infinite media platforms 24 hours a day.
This tech revolution is also permeating the world of HR. Performance management has been gradually moving away from a focus on annual employee reviews, to real time feedback tools. Over the past few years we have seen giants like Adobe, GE, and Microsoft make these transformations and that trend will likely continue. It is uncertain whether the annual performance review will disappear altogether, but it will at the very least be augmented by more regular communication between employees and managers.
In the coming year, more software companies will emerge that provide performance reviews, 360 degree feedback, pulse surveys, and OKR tracking (objectives and key results). Companies that know success is created by helping their employees succeed will be adopting these technologies.
While we’re on the topic of technology, let’s talk about people analytics. This often takes the form of management software platforms where people are asked metrics-based feedback questions. Employee productivity (performance relative to stated goals and key objectives within a specified time frame) will now be measured and catalogued.
Managers and other company leaders will review this data via performance management dashboards. They can see at-a-glance employee performance numbers company-wide, and drill down to analyze team engagement and individual contributors. According to Human Resources Today, people analytics ranks among the top ten human capital trends this year:
In 2017, predictive talent models will help HR departments recruit and promote the right individuals into the right jobs.
This trend is especially helpful for larger teams, where managers and executives need to understand performance trends and aggregated data for hundreds or thousands of employees.
Based on their latest Human Capital Trends study of over 7,000 companies worldwide, Deloitte found that the vast majority of companies (92%) don’t think that they are organized correctly.
Many are shifting away from a top-down hierarchical structure to more horizontal or lattice type structures. The former exists to create individual teams for scalable efficiency, but today’s markets are not optimized for those factors since rapid innovation has increased the speed and quantity of competition. You can scale a department via a hierarchical structure and then have your entire product offering supplanted by a crafty competitor.
These shifts will improve employee engagement by allowing people to be more effective at what they do and by seeing the impacts of their contributions. We know from studies in behavioral economics that people are motivated by seeing their contributions, which in turn increases employee satisfaction and morale.
Bersin and his team predict a massive shift where basically every leader in every business will have to be focused on employee wellness. In the report referenced above, they share extensive data on how productivity and workforce engagement has slowed, while the amount of hours worked has increased and vacation time taken has decreased.
Likewise, author and productivity expert, Tony Schwartz, has written extensively on the topic of burnout and its effect on employee performance. In this post, he categorized employee engagement as a negative:
[T]oo often, it refers to employees who get to work early, stay late and remain connected at night and on weekends. That’s a recipe for burnout, not enduring high performance.
Bersin states the current strategy is to rethink the overwork problem by moving HR into a new role as “consultant in human performance”. Instead of managing performance review processes, employee onboarding, and health & wellness programs, HR must focus holistically on how they can help people and teams perform better.
Gordon Tredgold, founder and CEO of Leadership Principles, shares that recognition is the key to employee engagement. That’s a bold claim that he backs up with Gallup research from an employee feedback survey:
Two-thirds of employees, who said they hadn’t received any recognition in the last seven days, were twice as likely to say they would leave the company as the other workers when asked.
Of course how employee recognition is delivered impacts how it is received. Is it specifically tied to work performed, or a baseless platitude designed to keep employees happy? How frequently is it given? Is it shared publicly across the team to amplify the impact? Is it accompanied by a tangible reward?
According to The Society for Human Resource Management, staff recognition ranks in the top 10 factors influencing employee job satisfaction. And according to PWC, how employee recognition is given does matter. 41% of millennials prefer to be rewarded or recognized for their work at least monthly, if not more frequently. Companies like Blueboard, O.C. Tanner, and our very own High Five feature allow for creative and frequent employee recognition and rewards.
Our CEO, David Hassell, has written at length about the importance of building strong work cultures, how to foster employee engagement, and how to manage employee performance. Last year, David shared how organizations have historically thought of those three critical factors as separate and distinct. In the coming year, as performance management becomes more of a holistic practice, managers will consider them together:
The interplay of building organizational culture, fostering high employees engagement, and focusing on performance management (namely vision, strategy, objectives, alignment and execution), is in essence an ecosystem that must be focused on as a whole in order to ultimately achieve high employee performance.
Why does employee engagement persist as a focal point for performance management experts and HR leaders? Because it is directly linked to other factors that matter to every business owner. According to Gallup, engaged teams show dramatically higher job retention rates and lower absenteeism, 17% higher productivity, and 21% greater profitability.
For the coming year and beyond, technology will continue to permeate every aspect of our collective existence, both personally and professionally. But performance management tools alone cannot increase employee engagement (and in many cases can be more of a distraction than a benefit). No, it will be the managers, human resource professionals and business leaders who have the greatest impact throughout an employee’s lifecycle. They must ultimately make the people-centric decisions to create work cultures where people are naturally inspired to bring their best every day.
David is Content Guy at 15Five, a lightweight weekly check-in that delivers a full suite of integrated tools – including continuous employee feedback, OKRs, pulse surveys, and peer recognition. David’s articles on talent management have appeared in TNW, TalentCulture, and Startups.co. Follow him @davidmizne.
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