At Kenexa, we conduct an annual Compensation Outlook Survey. Our focus is on attitude questions that will give us a deeper view into HR’s perception of engagement, pride, retention, and other factors affecting human capital. After the most recent survey, we directly compared the data with a similar survey from visitors to our consumer website, Salary.com, and to World Norms from Kenexa’s Employee Engagement database. We gained incredible insight from these comparisons and were able to clearly see similarities and differences worth noting.
Across all HR categories covered in the survey, there was a noticeable gap between the Salary.com visitors and HR perception, while the World Norms data hovered somewhere in between. We can safely assume that the visitors to Salary.com are biased toward workplace dissatisfaction, because they are visiting a career site most likely looking for a career change or a new job. It is also highly likely that the World Norms data is skewed toward more highly engaged employees or more self-edited answers, depending on an individual’s trust in survey anonymity. The bottom line, however, is that HR’s perception of employee attitudes is off the mark in every category.
As our economy continues to rebuild, engagement is a critical metric. Employees have faced pay cuts, layoffs, and stagnant salaries. With all of these challenges, it’s crucial now more than ever for employers to stay in tune with how their employees feel. This is key to holding on to talent. Yet, with this urgency, there is a staggering disconnect between what HR says employees think and what those employees really think.
The ability to offer competitive compensation is largely driven by budget and senior management’s understanding of how critical competitive compensation is. During the last few years of a volatile economy, many organizations had to make tough decisions – cutting costs across the board. Our data shows that HR professionals do understand that these decisions affect their competitiveness, which in turn affects the organization’s ability to attract, retain, and motivate employees. One of the most telling pieces of data we uncovered was that almost half (47%) of organizations acknowledged that they do not pay competitively. With employers aware that competitive compensation is a priority for current and prospective employees, why is this number so high? It’s especially surprisingly when employers acknowledge the need to pay in order to get and keep the right people.
The gap in the perception of competitive benefits may also be affected by sharply increasing healthcare costs. While an organization may actually have competitive benefit plans, employee perception can be different. This all comes down to communication with employees. Without color commentary from HR, the only thing employees know is that their out-of-pocket costs have increased. They need to be shown the larger picture.
69% of HR professionals think employees have a high level of engagement – while Salary.com visitors show engagement levels of 45%.
81% of HR professionals believe employees would recommend the organization as a good place to work, while World Norms figures are at 72%, and Salary.com visitors are at 38%.
83% of HR professionals believe employees will stay with the organization in the coming year, but the figure is only 57% in the World Norms data and 41% for Salary.com visitors.
Fundamentally, we know that employees are motivated by fair and equitable pay. It is the reason “pay-for-performance” is a concept that every organization strives to incorporate into its culture. Yet, while only 53% of HR professionals think pay is competitive, 69% think they have high engagement and 83% think they will retain employees in the coming year. This disconnect is alarming. Are we as HR professionals saying that pay isn’t critical? Are we fooling ourselves into thinking that without proper compensation employees will still be engaged and want to stay with our organizations?
The wake-up call will come in the form of a retention crisis. If we average the World Norms and Salary.com data to cancel out some of the bias, then 49% of employees aren’t planning to stay with their organization in the coming year. That number is too high to brush aside. When this is coupled with the lack of employees willing to recommend their organization as a good place to work, some HR departments might find themselves in a recruiting crunch they are not prepared to handle.
When it comes to employees and their engagement in y our organization, it doesn’t matter what your programs do – it’s about what employees think they do. Understanding the gap between employee and HR perception is the key to changing the message you send to increase employee engagement and, in turn, the company’s bottom line.
HR professionals need to consider the source of employee communication. Even the most well intentioned HR programs sometimes fail with groups of employees.
Why are some programs viewed positively and others negatively? While fault may rest with HR, the overarching problem is inadequate managers. Unfortunately, while most managers have earned their positions by being promoted from roles as excellent individual contributors, they often lack solid communication skills and the proper training to deal with and manage people. This failure to arm managers to effectively communicate with their people can ultimately undermine the success of any program.
More than half (53%) of HR professionals think employees are fairly compensated, compared to 49% for World Norms and 30% for Salary.com visitors.
71% of HR professionals believe employees receive a competitive benefits package, compared to 63% for World Norms and 48% for Salary.com visitors.
Our research shows that HR has become too distanced from the employee population, leading to a misunderstanding of where the employee mindset truly is. Since ultimate success lies in proper manager training, managers need to be prepared to discuss and promote programs, as well as collect feedback for HR on how those programs are perceived. Business is business, yes. But it’s also personal — and it’s about making the workforce smarter. The goal is to attract and keep the best people, develop their skills, cultivate new leaders, and capitalize on their collective intelligence by applying human insights, social tools, and workforce analytics to transform the way they work.