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.1 No wonder this post on 2016 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:
1) Employee Engagement Will Grow…Slowly
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, engagement for the US workforce was under 30%. A ten percent rise 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”. Other employment trends like unemployment and underemployment have an impact, so the current robust job market might be having a positive psychological impact on employees.
2) Performance Management Technology 2.0
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 workplaces. 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 reviews, to real time feedback platforms. 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 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.
3) Data Focused Management and HR
While we’re on the topic of technology, let’s talk about people analytics. This often takes the form of software platforms where employees are asked metrics-based questions. Productivity (performance relative to stated goals and objectives within a specified time frame) will now be measured and catalogued.
Managers and other company leaders will review this data via dashboards. They can see at-a-glance performance numbers company-wide, and drill down to analyze teams 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 trends and aggregated data for hundreds or thousands of employees. Rich analytics and charts provide information on morale, performance and productivity to gain a deeper understanding of performance at all levels in an organization.
Technology is only half of the equation, and the question remains as to how it will impact engagement. Data viewed through a vacuum can be used to pressure employees to meet weekly goals and quarterly objectives, which can increase stress and actually lower employee engagement. But when this data is used to inform growth-oriented, mentorship conversations between employees and managers, engagement will likely improve.
4) Organizational De-structure
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.1
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.
Emphasis will shift from authority, hierarchy, and team individuation to allowing teams to work together in more dynamic ways. (We already see how there is crossover on sales and marketing teams where using testimonial language from customer advocates in marketing collateral helps sales teams to bring in new customers).
These shifts will impact employee engagement in a positive way 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 job satisfaction and morale.
5) Human Performance Strategy Will Change
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 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 employee burnout. 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 performance2.
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.
This reframe could easily transform the world of work from one where the inquiry is, how can I get the most out of my people? The new questions include: Are people engaging in healthy habits? Are they getting enough rest? Are they supported and coached to do their best?
6) More Recognition Programs
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:
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.2
Of course how 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, recognition ranks in the top 10 factors influencing employee job satisfaction. And according to PWC, how 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.
7) Performance, Culture, & Engagement – Together!
Our CEO, David Hassell, has written at length about the importance of building strong company 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 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 performance.
Consider the tactical, psychological and philosophical aspects of management all coming together. Tactics like data-focused management will work in concert with a focus on employee psychology to increase engagement, along with an emphasis on the philosophy of the cultural vision and core company values.
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 less employee turnover and 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 tech alone cannot make people more engaged (and in many cases it 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 environments where people are naturally inspired to bring their best every day.