As published on ohsonline.com
It’s International HR Day 2022, but things look a lot different for companies and HR professionals this year than in years past.
Traditional business philosophy held that top talent was attracted to growing or industry-leading firms offering competitive pay. And that may still be true for some professionals. However, according to recent data, most employees now prioritize work-life balance and office culture over financial perks or company growth when evaluating current or prospective employers. And not only that, but a majority also report “feeling undervalued” as their primary reason for leaving a company, outweighing dissatisfaction with compensation or better pay elsewhere.
But while it is true that we are entering uncharted waters and these accelerating trends might have many employers on edge, there is actually a strong case to be made that HR solutions and employee engagement and retention will become easier and less expensive for companies in the long run.
The COVID-19 pandemic accelerated several emerging trends — videoconferencing and other work-from-home capabilities chief among them — so most businesses should already be well-positioned to adapt to the new work-life balance employees are after, whether through fully remote or hybrid work models. What has managers nervous, though, is how to maintain a positive, effective company culture without everyone in the office.
Culture requires connectedness. In the office, this means being physically connected — seeing your colleagues every day and interacting with managers. Culture involves intangibles, too, such as interacting with coworkers on different teams or across job functions as well as supervisors being able to publicly acknowledge individual or group accomplishments.
Despite what some might think, at home and in hybrid situations, companies not only can save money and boost workforce productivity, but they can actually improve company culture. Properly tailored employee and peer-to-peer recognition programs incentivize employees to boost their own performance, while encouraging them to deliberately focus on what others are doing as they look to dole out their own positive acknowledgement. Instituted correctly, this type of solution cuts out many of the inefficiencies of in-person workplace interaction and hones the focus of a team.
But what about the other piece, where employees deprioritize financial perks in favor of culture and feeling valued? There must be a catch, right?
While it might be harder in the short term to change how a company shows appreciation to employees and promotes an effective mix of work-life balance and culture, what will always be true is that continuing to throw money at problems is unsustainable. Thankfully, the modern employee has different needs.
Especially now, as businesses everywhere grapple with record inflation, supply chain concerns, and a labor shortage, it should be welcome relief to know that constantly increasing salaries or bonuses isn’t the right retention strategy. Instead, employers should shift their focus to noncash performance and recognition solutions that diversify compensation and promote a highly connected company culture.
For example, Sally is an account manager at a regional logistics company. She manages 2 more accounts than average for her position and even helped the business development team secure an additional client for next year. Does she deserve the same overall company-performance pegged raise as everyone else, or something unique in recognition of her specific contributions? In a world where many employees feel like just another number, it is no wonder that many feel no loyalty whatsoever and will jump ship at the slightest dissatisfaction for similar pay. Employees need a reason to stick around, and they want to know they matter.
This International HR Day, take some time to think about your current engagement and retention strategies and ask yourself if they match the needs of the modern workforce. If they don’t, consider alternatives that will help you avoid fighting both macroeconomic headwinds and internal turnover or inefficiencies that will cost even more money.