Building the leadership bench is a major priority in 2019 for 67% of heads of human resources and 78% of talent management leaders, as HR helps to drive operational excellence and digital business transformation. HR leaders have typically filled the leadership pipeline with potential successors for specific positions or roles, but they need a new approach for today’s uncertain and rapidly changing times.
One of the challenges for leadership development is that most organizations expect more than 40% of leadership roles to be significantly different within five years. “This uncertainty around what the future of work looks like and what skills leaders will need to be successful makes it difficult to successfully build a strong leadership bench,” said Sari Wilde, managing vice president at Gartner..
Organizations reporting a strong leadership bench was a mere 13% in 2016. In 2018, 47% of HR leaders said their organizations struggle to develop effective leaders, and 45% said their succession management processes didn’t yield the right leaders at the right time.
In today’s complex and constantly evolving environment, where leadership is more complex and leadership roles are constantly evolving, progressive organizations take a portfolio management approach to building leadership bench strength, shifting their approach in four key ways.
Shift from supply-driven to demand-driven planning
HR has typically used supply-driven planning (assessing current roles and gaps in leadership supply). Organizations now need to develop stronger demand forecasting capabilities as well. Specifically, they should:
Align leadership strategy to organizational strategy, not existing roles and vacancies.
Design high-potential (HIPO) and succession processes that meet future, not just current, leadership roles and requirements.
Planning leadership strategy based on projected demand, not just current supply, has twice the impact on leadership bench strength as supply-driven planning.
Look broadly, not just deeply, in the organization
To safeguard your leadership portfolio against attrition as “destination roles” change over time, expand the search for future leaders across the entire enterprise, not just deeper in the organization. This requires increasing cross-organizational access to talent through broader transparency rather than static lists of successors and HIPOs, and encourage employees to aspire to leadership positions rather than assuming they will proactively do so.
“Sourcing and retention strategies should also be designed to include — and encourage — underrepresented groups, particularly given that 45% of HR leaders in the Gartner 2019 Future of HR Survey reported their leadership bench lacked diversity,” said Wilde.
Organizations typically organize career paths along a linear model that features an individual moving up a vertical hierarchy from level to level, all within the same role. This leaves successors narrowly prepared for one future role. A better option is to identify and develop future leaders for a few different roles and contexts. This doesn’t mean broadly preparing all successors for any leadership position; the focus is on designing leadership career paths around a few diversified experience requirements.
Preparing successors for more than one senior leader role has twice the impact on leadership bench strength than preparing them for only one role or for any leadership position.
Move from successor transitions to leadership team rebalancing
Leadership development and succession management strategies shouldn’t end after someone moves into the role. Evaluating senior leaders’ profiles against strategic goals and organizational needs and proactively realigning leadership benches is necessary to ensure continued strategic alignment. By regularly evaluating and rebalancing the leadership team, individuals can be reassigned based on complementary strengths, not just role fit.
As I spoke with HR leaders about what we are likely to see happen in the workplace this year, several recurring themes emerged. They touch on the many different subfunctions and facets of HR — from performance management and total rewards to learning and development.
The large and long-lasting impact on organizational performance means HR leaders need to know and prepare for the trends that will shape how and what they do. To that end, I’ve come up with my 2019 workplace predictions.
The #MeToo movement will accelerate
In 2018, organizations that ousted leaders for sexual misconduct received support from their workforce and society at large. We may see just as many executives dismissed this year, if not more — not because more harassment is occurring, but because corporate boards and senior leaders are expected to have a greater awareness of their organization’s culture. This will lead to a shift in how companies respond, moving from a “We didn’t know we had a problem” stance to actively looking for unacceptable behavior and handling it directly, proactively and openly.
More companies will use nontraditional listening tools
Employee surveys have long been the main method for collecting feedback; in 2015, 89% of organizations conducted an annual employee survey. However, the tide is changing as more companies begin to explore alternatives, using listening tools such as email scraping, monitoring and tracking workspace usage, and aggregation of data to obtain better insights about employee sentiment and/or problems that leaders need to address. In 2015, 30% of organizations were using employee monitoring data outside of surveys; in 2020, we expect 80% of organizations to do this type of listening.
Workplace tech will go beyond observation and start nudging
Organizations will implement more advanced technologies that don’t just observe behavior, but suggest to employees and managers how they should work. For instance, to help employees stay productive, technology is being built into desks that will observe how long you’ve been working and remind you to get up and take a walk so you don’t burn out.
In fact, Amazon recently filed a patent to have people in their stockrooms wear bracelets that keep track of their hand movements when handling packages. In an effort to increase safety, the bracelet will alert the person wearing it when they are holding a package the wrong way.
Pay discrepancy issues will get worse not better
Despite the recent focus on pay equity, very few organizations have actually fixed the problem. Rather than adopting sustainable practices and processes to correct and prevent pay gaps, a handful of companies made ad hoc adjustments in 2018, leaving the door open for pay gaps to re-emerge. The fate will likely be the same when it comes to pay transparency — CEO/median-employee wage ratios will effectively remain flat in 2019, although we could see the gap increase due to stock market performance.
A new wage gap will emerge for new hires vs. current employees
In the current tight labor market, the best way to get a raise is to find a job at another company. And with more jobs available today than there are people to fill them, employees are more willing to make the jump and switch employers. As people switch jobs more often, companies will have to pay a premium to lure in new workers. This will lead to pay disparity between long-term employees and those who have been newly recruited.
These predictions are centered around the most important part of any organization: Talent. Organizations that are aware of and address these issues will be able to gain a competitive advantage.
Gartner research shows 67% of business leaders agree their company must become significantly more digitalized by 2020 to remain competitive. For chief human resources officers (CHROs), that creates a tall order: How to satisfy the digital aspirations of the CEO and the needs of the workforce as operating conditions change — sometimes swiftly and radically.
Most corporate strategists tell us digitalization is going to transform their company’s business model, creating totally new revenue streams in new ways. But progress has been slow in actually executing digital transformation, and the results have often been disappointing.
In the digital age, business strategy is your strategy
The reality is, you can rarely transform the organization by playing it safe with incremental investments. You need to be bold and test entirely new business models, while also finding ways to reduce the risk that comes with that.
As an HR leader, how can you be a value-added partner to your CEO as the organization pursues its digital ambitions in this way? Here are five things you can do today.
Bolster your business knowledge
It’s no longer enough for HR leaders to “understand the business.” Immerse yourself in the competitive landscape. Become more than conversant in the company’s financials. Walk a mile in your customers’ shoes. Confidently present a point of view on key business strategies.
Without this knowledge and positioning, you can’t properly influence, prepare for and lead business change, coalesce employees around the strategic ambitions — or plan the organization’s own talent and employee-engagement strategies. In the digital age, business strategy is your strategy.
Be prepared to challenge your CEO
Contract with your CEO to be their challenger. Ask their permission from the outset to be the advisor who respectfully calls them out when you observe counterproductive behaviors in them, the C-suite or the organization.
This type of relationship is only possible when there is trust between you and your CEO. Building trust can take time. You can accelerate that by finding ways to connect informally in addition to your regular meeting cadence. Follow through; show empathy; be vulnerable and establish credibility. Having trust gives you license to circle back and say, ‘As we all talked about…this is why I’m challenging you on this issue.’
Demonstrate change leadership
To be a change leader — and to help your CEO and colleagues to become change leaders — you have to recognize and articulate where you are today and where you want to be tomorrow, and find ways to reinforce positive behaviors and outcomes as the organization transforms.
It’s common in times of stress for people to resort to their least effective behaviors. Your organization likely needs to encourage leaders and employees to be brave and innovate. Make sure the organizational practices and processes are aligned to support such behavior. For example, you can’t foster innovation and then penalize failure. Build a cohesive storyline around why a certain behavior is a good thing — and why it will take the organization where it needs to go — and provide ways for others to emulate productive behaviors.
Offer value-added insight
Translate the business model change into strategic talent goals you can articulate to the executive team — and the board. To prepare the organization to become its future self, you’ll need to have assessed the talent implications of your business model change and prepare a creative talent strategy to enable the business to deliver against those changing needs.
Partner with the CEO to identify and take action to retain critical employee segments, including executive successors, emerging talent, high-potential employees — and have a deliberate plan to nurture strong performers who might be a flight risk.
Provide those brilliant few insightful workforce analytics regarding turnover, attrition and engagement to shine a light on the state of the organization’s culture. You can use that insight to help solve real and pressing business issues.
Target some tactical quick wins
Amid all your strategic thinking, don’t forget to capture some quick wins that can demonstrate progress — and protect against change fatigue.
Push your CEO to message clearly about the organization’s aspirations and what is key to driving your transformation. Make sure talent processes don’t undermine your goals. If performance management is a burden, simplify it and find better ways to signal what really matters to performance. Improve employee experience to show employees you’re serious about enhancing their work lives and to demonstrate how what they do contributes positively to their own career development and the organization’s success.
Employee engagement continues to decline, according to 3Q2018 data from Gartner’s Global Talent Monitor — a quarterly survey that captures how employees and job seekers around the world feel about the economy, their personal prospects and what motivates them, or doesn’t, when it comes to work.
Employee discretionary effort and intent to stay both remain weak. Intent to stay refers to employees’ desire to stay with their organization based on whether they intend to look for a new job within a year. Active job-seeking behavior also increased in 3Q. Just 7.5% of the global labor force reported both high discretionary effort and a high intent to stay at their current employer.
“Employees also know there are more jobs available today than there are people to fill them, so they are more willing to make the jump and switch employers because jobs are in abundance,” says Brian Kropp, group vice president for human resources at Gartner. “For employees globally, their fears about changing jobs have eased following years of anxiety after the 2008 financial crisis.”
Employees’ perception of job opportunity and their confidence in the business environment both increased in 3Q.
Also in 3Q:
Globally, 29.3% of the workforce is actively seeking new jobs.
The top drivers of attrition for employees globally are career development opportunities, compensation and people management — the same top three for 13 straight quarters.
The top three drivers of attraction remain compensation, work-life balance and stability in the workplace.
Global Talent Monitor data is based on responses from more than 22,000 individuals in 40 countries, and offers insights into key metrics that can be used to understand labor market trends and inform recruitment and retention strategies.
Employee change fatigue and audience information overload continue to be top challenges among communications leaders, according to the Gartner 2019 Agenda Poll. New this year, leaders anticipate challenges related to adapting to digital trends and technology. To achieve organizational goals, communication leaders have identified three critical priorities for 2019:
Drive employee engagement and alignment
Develop content strategy and message management
Overcome digital communication challenges
“Communicators feel least confident about overcoming employee change fatigue, declining levels of employee engagement, and the mismatch between staff skill sets and organizational demands,” says Karl Schmidt, Practice Vice President at Gartner. “As a result, leaders are focusing on effective change communications and making targeted investments in digital technologies as well as skills development.”
Employee engagement and alignment
At the top for the second year, employee engagement and alignment is critical. Enabling employees to understand how strategic goals relate to their own work is the most important driver of employee performance. A Gartner survey reveals that 61% of senior executives believe that their company struggles to bridge the gap between strategy formulation and day-to-day implementation.
Compounding this challenge is the pace of change at most organizations. With the drumbeat of strategic transformation initiatives, it is very hard for employees to keep up, and the culture of the organization is often blamed for the failure. Culture can help stabilize an organization during a period of change — “Don’t worry, we’re the same company” — but also serve as a barrier to that same change.
Communicators face competition, both internally and externally, for audience attention
For individual employees, it is not enough to provide support through FAQs, strategy presentations and manager training. Instead, identify and leverage employee engagement levels. For employees who are actively engaged, provide information and opportunity for them so they can draw connections between organizational goals and strategy and their work. For the less engaged, provide encouragement and opportunities, sometimes through manager direction, to allow them to interact directly with company strategy.
Content strategy and message management
Content lies at the heart of everything communicators do, but increasing numbers of contributors are creating content and dissemination channels are proliferating. This makes it harder to prioritize content strategy and management.
“Communicators face competition, both internally and externally, for audience attention,” says Schmidt. “Ineffective messages not only frustrate communicators, but often leave audiences overwhelmed and confused.”
Prioritize. Realize others are producing content and determine what content should be repurposed.
Plan. Identify desired audience outcomes to uncover obstacles that you can address preemptively.
Produce. Look for opportunities to work with other teams when creating content and use stakeholders as both the audience and potential messengers.
Publish. Consider the natural consumption and channel preference of the target audience, including the long-term potential use cases.
In a digital world, communication leaders strive to stay on top of the latest trends such as developing digital content capability and adapting current communication norms to evolving digital trends. More than ever, communicators wonder how they can integrate new, digital channels into internal and external communications activities.
To keep pace, build employee digital acumen and a baseline understanding of new technologies. Employees who better understand the opportunities and implications of technologies that impact their audiences are better positioned to identify opportunities to successfully leverage them.
When evolution is necessary, experiment with different digital media and channels to identify which channels best reach, engage and influence stakeholders across the spectrum, externally and internally. Aim to integrate a variety of technologies (apps, social media, etc.) into the channel portfolio — not just to improve communication, but to enable employee-to-employee networking and collaboration.
Nancy, the CHRO at a global pharmaceutical company, realizes that key HR processes, such as recruiting or compensation and benefits, lack clear management across different business units and regions, resulting in major process inefficiencies and poor service quality. Together with her HR leadership team, Nancy needs to find a way to manage and harmonize core processes across the enterprise, while still allowing for local variations.
A multitude of global and local processes can cause ineffective HR service delivery
“As organizational complexity increases, HR leaders increasingly lack insight into key process activities and timelines, roles and responsibilities, frameworks and tools, or external vendors,” says Gartner director analyst Matthias Graf. “A multitude of global and local processes can cause ineffective HR service delivery with duplication of efforts, higher costs and low-quality results.”
Two essential components will help CHROs and HR leaders to govern HR processes across the enterprise, helping to optimize cost over the long term.
Degrees of standardization
Organizations can achieve a clear overview of all HR processes across their business units and regions by clearly defining the degrees of standardization for key activities.
Degrees of standardization are defined as the range between central standardization (central design and development, as well as standardized implementation and communication of a process) and local customization (local design, development, implementation and communication) in which a process can exist. A comprehensive catalog of defined degrees of standardization drives efficient HR service delivery, because it aligns efforts and costs across the organization, while allowing for local customization needs.
First define the degrees of standardization for selected activities and then determine the range of central standardization versus local customization for existing activities.
Once organizations define degrees of standardization for their key HR processes, they must put them into effect. Organizations especially lack well-defined routines to review and verify recurring events, such as those triggered by process failure reports or enhancement requests, or changes in underlying organizational structures or strategic directions.
Decision-making routines apply a structured approach to reviewing change requests from the recurring application of HR processes under changing circumstances. They automatically initiate a review based on predefined triggers and lead to agreed-upon changes to the processes in scope.
Predefined triggers can be process failure reports by users, process enhancement requests by users, certain events in the development of systems or other processes, changes in underlying organizational structures or changes in overall strategic direction.
The routines also include decision-making bodies that comprise key stakeholders in HR processes and decision-making processes, which are the key steps needed to be taken in the approach itself.
Decision-making routines are vital for degrees of standardization, because they ensure ongoing process efficiency and effectiveness, particularly when unusual events or issues trigger changes.
Customer reps at one home security company had always been proud of the quality of their customer interactions. After a recent acquisition, the merged organization started to focus on costs, and the reps felt pressured to spend less time with customers. What should be their priority?
This type of confusion is common during any type of transformation if the organization fails to properly articulate strategic choices and inform employees how to make trade-offs, especially when they are conflicted between two good things (e.g., being cost-focused or customer-centric).
An employee’s ability to navigate and make trade-offs between cultural norms is the biggest driver of transformation-aligned performance
“Over 80% of employees going through a transformation experience cultural tensions or competing priorities they don’t know how to balance,” says Elizabeth Barrett, Vice President, Team Manager at Gartner. “Both create stress and worsen performance.”
Gartner identified five factors that drive transformation-aligned performance — the extent to which employees are effective in their jobs and the degree to which they actively align their efforts to changing company priorities.
Culture-informed judgment — an employee’s ability to navigate and make trade-offs between cultural norms — is the biggest driver of transformation-aligned performance. It helps employees deal with difficult decision making and minimizes second guessing during a time of transformation. Lifting the burden of conscious decision making enables employees to create mental shortcuts and make correct choices based on habit.
“Of the five factors, culture-informed judgment had almost twice as much impact on transformation-aligned performance compared to the next most powerful driver, capability,” says Barrett.
Employees build judgment through a cycle of guidance, practice and feedback. To set a foundation, leaders must instill guiding principles that help to simplify and structure complex and ambiguous decisions. Organizations should provide employees opportunities to practice decision making to test and refine their judgment. Feedback from leadership on decisions helps to reinforce desired behaviors and force reflection on less-successful decisions.
After participation in the judgment-building game, 95% of employees agreed they better understood their role in growing the business
Leveraging this cycle, one multinational insurance company encouraged employees to adapt to its transformation through the creation of a game to build judgment. Employees were given business scenarios and asked to make decisions between two seemingly good options that forced them to weigh trade-offs and use their judgment. Decision choices that were not aligned to new business objectives were immediately corrected with feedback to clarify priorities and improve future judgment.
The game illuminated individual and teamwide tendencies, setting the foundation for team and employee reflection and adjustment to better support priorities. After participating, 95% of employees agreed they better understood their role in growing the business.
Growing the business will be the top enterprise-level business objective in 2019, along with improving operational excellence and executing business transformation, according to HR leaders responding to the Gartner 2019 Future of HR Survey. As HR leaders look to support these corporate ambitions, the survey shows their top three key initiatives in 2019 will be to:
Build critical skills and competencies for the organization
Strengthen the current and future leadership bench
Improve the employee experience
“Gartner surveyed 843 HR leaders globally — at the enterprise, business-unit and subfunction levels — and these three initiatives clearly emerged as priorities for HR,” said Leah Johnson, Vice President, Advisory, Gartner.
These priorities for chief human resource officers (CHROs) and other HR leaders come amid prevailing headwinds from four key global trends:
The hot labor market. Global unemployment rates continue to decline, and the market is especially fierce for critical roles, many of them related to digital capabilities. According to Gartner TalentNeuronTM, 47% of S&P 100 job postings in 2017 were for the same 37 roles, and 90% of S&P 100 companies recruited for those same roles. Strategic workforce planning is taking on new urgency as the complexion of the workforce changes and different skill sets emerge, evolve and expire.
Digital disruption. CEOs are pursuing digital initiatives both to capture opportunity and to avoid being “Amazoned” away. In the Gartner Digital Enterprise 2020 Survey, 67% of business leaders agreed that if their company did not become significantly more digitalized by 2020, it would no longer be competitive. HR is under extreme pressure to lead the digital transformation of their company.
Social and political change. For the business to grow, HR needs a productive workforce. Structural and social challenges such as pay inequity and the #MeToo movement are directly affecting employee retention and morale and reshaping executives’ employment contracts.
To counter these trends and support corporate business ambitions, the HR strategy will need to focus on key levers of improvement.
Develop connector managers
The survey showed that building critical skills and competencies is a priority for 66% of HR leaders overall and 85% of heads of learning and development (L&D).
Ineffective managers are the single biggest problem today. Forty-eight percent of HR leaders say their organization’s managers are not effectively developing employees. One head of talent management describes the challenge: “We’ve experienced more change in the past few years than we ever have before, so we need our managers more than ever to be able to work in complex contexts with ambiguity.”
Focus on developing “Connector” managers — those who connect the right people and resources at the right time
Manager development, as well as L&D solutions and on-the-job learning, will be key. One important way to develop more effective managers is to identify the types of managers currently in the organization and to focus on developing “Connector” managers — those who connect the right people and resources at the right time. Connector managers are standout performance coaches, and triple the likelihood that their direct reports will be high performers.
Demand-driven succession management
Building the leadership bench is a priority for 60% of HR leaders overall and for 78% of talent management leaders. At issue are high-potential employees, succession management and leadership development — which is currently lagging.
Among HR leaders overall, 47% said their organization struggles to develop effective leaders, 45% reported their leadership bench lacked diversity and 45% said their succession management processes didn’t yield the right leaders at the right time. In 2018, the median development spending per leader was $419 — a number that 44% of organizations expect to increase in 2019.
Organizations expect more than 40% of leadership roles to be significantly different within five years
Traditionally, succession planning has assessed current roles and gaps in leadership supply. By switching to demand-driven planning, organizations can assess leadership needs that will enable the organization to achieve strategic goals, not just fill potential future vacancies in current roles.
This approach is more appropriate for the fast-evolving business conditions inherent in today’s digital transformation strategies. Most organizations expect more than 40% of leadership roles to be significantly different within five years. By using demand-driven planning, HR can hedge its bets in an ever-evolving landscape and generate twice the impact on leadership bench strength.
Fifty-one percent of all HR leaders and 62% of heads of diversity and inclusion said it is a priority to improve employee experience. That will require HR to address key elements of culture, the employee value proposition and employee engagement.
The problem today is that work experiences do not match the experiences of individuals outside the workplace. “Employees want their 9-5 to look like their 5-9,” says Brian Kropp, Group Vice President, Gartner. “And employees’ 5-9 lives are full of seamless, effortless experiences, largely enabled by digital technologies.”
Supporting what employees value, not just what they need, increases employee performance by 20%
Only 29% of employees agree that “HR really understands what people like me need and want.” Among surveyed HR leaders, 40% conceded that their organization struggles to bring the employee value proposition to life in employees’ day-to-day work.
Key to the solution is a change in focus for HR from just asking what employees want (or worse still, assuming what they want) to listening to what they need to determine what they really value. Supporting what employees value, not just what they need, increases employee performance by 20%.
Not surprisingly, individual HR leaders tend to prioritize initiatives aligned with their subfunction — whether that is diversity and inclusion or talent analytics — but the survey showed these top three initiatives to be critical across HR roles in 2019. This creates significant opportunity for cross-functional cooperation among HR leaders.
For example, a head of talent analytics who prioritizes driving digital business transformation for the organization may not know that other HR leaders are doing the same. To align and capitalize on these important key initiatives, HR leaders must work across their functions, utilizing a wide range of HR resources and staff.
Digitalization is a top priority for corporate leaders, and CEOs increasingly expect HR to drive the digital transformation of the business. HR executives often believe their mission is to attract, develop and retain digital talent. But this limited focus area prevents HR from truly contributing to the digital ambitions of the business. HR can’t just buy and build digital talent. It needs to foster innovation — fast, disruptive and broad innovation that enables the organization to compete and win digitally.
When HR can improve the innovative effectiveness of the organization, annual revenue can increase by as much as $8,800 per employee
“When it comes to how HR reinvents itself in the digital age, HR’s job is not simply to recruit, retain and develop digital talent but also to solve the problem their CEOs are asking about,” says Brian Kropp, Group Vice President, Gartner. “What CEOs want to know is how to improve the innovative effectiveness of their organizations in the digital age. And CEOs are right to want this outcome. When HR can improve the innovative effectiveness of the organization, annual revenue can increase by as much as $8,800 per employee.”
Digital talent is difficult to acquire and keep
CEOs expect HR to support digital transformation and HR has focused heavily on building and buying digital talent — but those strategies are getting increasingly difficult.
The skill requirements for the majority of technology-based jobs are changing rapidly leaving organizations with significant skill gaps. HR is working to reskill existing employees, and looking at new ways to expand the talent pool, but these efforts aren’t enough in the face of the fierce demand for digital talent. According to Gartner TalentNeuron™, 47% of S&P 100 job postings in 2017 were for the same 37 roles, and 90% of S&P 100 companies recruited for those same roles.
Digitalization and today’s buoyant economic conditions are also creating discontent among employees — who are expending less effort at work, and keen to pursue alternatives. Globally, employee engagement is low, and has been for at least the last two decades. The latest Gartner Global Talent Monitor finds that only 32% of employees globally report high levels of intent to stay and only 14% report high levels of discretionary effort day to day.
Innovation as a key driver of digital strategy
The imperative to build and buy digital talent will remain, but HR also needs to consider how else to support digital transformation — especially by driving innovation. Competing digitally means innovating to remain competitive.
In a survey of over 2,000 earnings calls of major global companies, Gartner found that when the topic of talent arose, it centered on talent as a means of driving innovation. In the digital era, companies need to innovate quickly, be disruptive and scale innovation across the enterprise.
Building an environment that enables innovation
Traditionally, innovation strategies have centered on helping individuals and teams to be more innovative, but their impact is limited. Too few employees are actively engaged in generating new ideas and/or leaders’ risk aversion stifles them.
Gartner research found that a more network-based approach achieves greater innovation effectiveness. This involves building and drawing on a network of expertise — including employees and leaders — to innovate at scale.
Notably, our research found the network approach is more effective, regardless of the organization’s level of digital acumen.
Innovation strategies that win
HR functions that are the most effective at creating innovative organizations use these network-based strategies:
Involve employees in filtering not just generating ideas. When employees feel like they have skin in the game and are actually responsible for choosing which innovative ideas the organization pursues, they are more engaged and committed to it.
Equip leaders for shared not individual risk taking. HR needs to help leaders work together to understand how to take better risks and chances in the digital age.
Give employees more guidance on using networks to innovate. To maintain momentum, HR needs to rethink how ideas move through their organization and equip employees with a different sense of who to work with and how to push ideas forward.
Did you arrive at this article through a Google internet search for the term "employee engagement?" That wouldn’t be surprising as the number of such searches has increased by a factor of 1,000 in the last 15 years, showing the growing popularity and acceptance of the term.
By 2020, 20% of organizations will include employee engagement improvement as a shared performance objective for HR and IT groups. “But before you can incorporate employee engagement into performance management,” says Gartner Senior Director Analyst Helen Poitevin, “you need to be clear what it is, why it matters, and what needs to be measured.”
70% of business leaders agree that employee engagement is critical to achieving business results
Employee engagement is the state of mind of an employee in which they are both rationally and emotionally committed to their work as a result of their past events, present experiences and expectations about the future with their organization. This state motivates them to put energy and effort into their work beyond the minimum level required to "just do their job" and stay longer with their organizations.
Globally, employee engagement is low, and has been low for at least the last two decades. The latest Gartner Global Talent Monitor finds that only 32% of employees globally report high levels of intent to stay and only 14% report high levels of discretionary effort day to day.
Repeated studies in recent years have shown that the business performance of organizations in the highest quartile of employee engagement scores outpaces that of competitors. High employee engagement correlates with higher average revenue growth, net profit margin, customer satisfaction and earnings per share. Today, 70% of business leaders agree that employee engagement is critical to achieving business results.
But in an environment of complexity and frequent change — key characteristics of today’s digital workplace — merely improving employee engagement isn’t enough to drive performance since it is now more difficult for even the most engaged employees to direct their work to the right outcomes.
Digital workplace initiatives focus on delivering a more consumerized and collaborative work environment to promote employee agility and effectiveness in changing business environments. The digital workplace is an integral part of digital business and includes the transformation of business models, the pervasiveness of technology and the Internet of Things (IoT).
Employee engagement is a critical component of the success of digital business and needs to be one of the focal points of any digital workplace initiative, but it includes many more elements than the use of digital workplace tools and content (the focus of engagement for many in IT).
While engagement models on the market today range anywhere from three to more than 15 factors, all models at their core attempt to measure a few basic engagement categories:
Rewards. To what extent do employees believe their overall compensation and rewards package are fair.
Career and development opportunity. To what extent do employees believe that their stay with the organization can be more than just a short-term "job" and will allow them to gain skills and experiences that are of interest.
Perceptions of the organization. To what extent do employees identify with the values, brand and future of their organization.
Team and colleague quality. To what extent do employees’ supervisor, immediate team and other colleagues positively contribute to their experience at work.
Work environment. To what extent do employees’ physical work setting and work-life enable them to execute their day-to-day job.
Measuring and analyzing engagement
Armed with their holistic engagement definition and model, organizations move next to engagement measurement. Annual or biannual surveys continue to be the most common method of measuring employee engagement, but in a world of increasingly real-time analytics, many in HR now believe they need more frequent insights into engagement. Some leading organizations have taken a page from voice-of-the customer initiatives, applying these concepts and services (such as social network analysis, sentiment analysis and social recognition and feedback channels) to gather additional insight around employee opinions, behaviors and attitudes — and create a “voice of the employee.”
Regardless of the method or technology through which data is collected from employees, many organizations take the results and divide the employee population into different segments — such as "fully engaged," "somewhat engaged," "unengaged" and "actively disengaged." Further segmentation of the results — by e.g., region, location, job level or supervisor — offer important insights on segments with particularly high or low engagement scores and help identify the underlying drivers of engagement (or disengagement) within those segments.
Many HR organizations also try to correlate engagement scores with other HR metrics such as attrition, performance ratings and internal mobility to better determine the business value of measuring engagement and to be more proactive in containing problems.
Taking action to improve engagement
The ultimate step is taking action based on the engagement data findings; it’s also often where organizations struggle most. According to a Gartner survey, only 20% of heads of engagement believe their organizations are effective at acting on engagement data. Failing to act creates cynicism among employees and reduces participation rates in subsequent surveys, as employees think, "Why bother to take this survey again — they didn't listen to me the last time."
Effective action plans document the particular talent segments that will be prioritized for improvement
Creating an engagement survey action plan is the most traditional mechanism for establishing accountability for improvement. Effective action plans document the particular talent segments that will be prioritized for improvement (typically those with lower levels of engagement), as well as engagement categories that will be prioritized, such as career opportunity or work environment.
Beyond the action plans themselves, HR organizations are also providing additional support to equip leaders and managers to understand and act on the results specific to their teams and ensure that all members of the workforce clearly understand how they can contribute to their organizations’ action plans.