HR failing to develop employee engagement

2006

HR professionals are spending too much time focussing on staff retention and talent management and neglecting the critical area of employee engagement, a new report claims.

Research by HR consultancy RightCoutts reveals that just over four out of 10 (41 per cent) of senior HR professionals see the retention of key staff as their organisation's most critical HR issue this year.

Recruiting enough talented individuals is also a hot topic, with 39 per cent of respondents making this issue a high priority, signifying that the skills shortage shows no sign of diminishing.

Yet at a mere 12 per cent, employee engagement emerged 29 percentage points lower than the top HR issue of retention.

The connection between increased levels of employee engagement and improved staff retention (plus lower rates of absence) is well documented. Moreover, as a study last year by consultants Towers Perrin found, with only one in seven employees worldwide fully engaged with their jobs and willing to go the extra mile, organisations are sitting on a vast reserve of untapped employee performance potential that could drive better financial results if only companies could tap into this reserve.

In addition, as RightCoutts pointed out, highly engaged workforces are better at attracting jobseekers, as success breeds success.

Edna Agbarha, head of talent management at RightCoutts, said that the fact that this issue attracts so little attention even from HR professionals is alarming.

"Strategies to maintain and develop employee engagement are currently not receiving enough attention and as a result this is having a knock on effect on the attraction and retention of key talent," she said.

"Businesses need to address this issue sooner rather than later in order to avoid storing up trouble for the future."

The research also indicates that despite new health and safety guidelines requiring employers to take a certain amount of responsibility for staff wellbeing, many businesses are still not effectively tackling stress in the workplace.

Only a third of those surveyed (32 per cent) believe their organisation is effective at managing workplace stress, which suggests that many organisations still have a way to go before policies are fully implemented and understood.

Another worrying aspect to emerge from the survey is the revelation that many businesses are not making the most of their employees' potential, with a third of respondents feeling that managers in their organisation do not develop people effectively.

Nevertheless, HR departments do appear to have faith in senior executives in their organisations, with almost three-quarters of respondents (71 per cent) saying that their leaders have the capability to make their organisation successful.

But – as the Economist Intelligence Unit found earlier this year – such faith is not reciprocated. Senior executives quizzed for the EIU's annual CEO Briefing survey gave their HR departments an emphatic thumbs-down, rating them the worst-performing of all their business functions, with more CEOs assessing its performance bad than good.

As Edna Agbarha pointed out: "Although many companies are now starting to recognise that the HR function has an important role to play in influencing board level decisions, there is still a long way to go.

"Only when HR expresses its concerns in terms that the business relates to - enhanced productivity and customer service, better leadership and faster decision making - will they see the necessary emphasis on talent management and employee wellbeing from line managers and senior executives."