Employee Engagement is one of the most talked about topics in the corporate world today. But the conversation leaves a great deal to be desired. Fuzzy metrics, poor analysis and vapid “thought leadership” have spun up a billion-dollar industry with little to show for it. There is almost no evidence that the employee engagement industry helps in actually engaging employees, improving their lives, or impacting business outcomes like productivity, work quality, absenteeism or employee turnover.
Part of the problem is that the wrong executives are wrestling with the question.
Most companies delegate this problem to their Human Resources departments. Although Human Resources departments are often staffed by kind, capable and competent people, giving them the problem is a grave mistake for 5 reasons:
1. Human Resources Departments are not Data Driven
I have had countless frustrating conversations with well-meaning HR leaders about whether it is important to see proof that a product or internal initiative has a real impact. These chats go something like this:
Ron: “As you can see, we have proven with control trial analysis that Tenacity actually reduces employee turnover by 20% in situations most like yours. While Tenacity is more expensive than what you are currently doing, it has never produced less than a 300% return on investment or better in similar situations. And your current approach appears to be producing a negative return.”
HR Professional: “Well, you have your numbers and we have ours. We did a survey and people like it, and engagement is higher this year. Does your product have how-to videos? Ours has over six hundred.”
Ron: “No it does not have how-to videos. Does anybody use the ones you offer? More important, does the product actually produce a measurable effect?”
HR Professional: “I’m not going to pay more for a product that does less than what I already have.”
If you want to actually fix the problem, you have to give it to people who are persuaded by proof.
2. Human Resources Departments Don’t Feel Enough of the Pain
Truth be told, low employee engagement is a pain point for HR. They don’t like it because it makes them look bad, and when employee turnover is frequent, they have to process the turnover and the new hires.
But compare that to the pain for operational P&L owners: In a customer service department with 1000 people, an employee turnover rate of 6% a month is common. That costs almost $15 million dollars per year. And centers with that kind of employee turnover tend to have high absenteeism rates and lower productivity because of poor employee engagement. The total cost is closer to $23 million a year.
Who has the bigger pain point?
3. Human Resources Doesn’t have the Budget or Power to Solve the Problem
As a cost center, HR has to beg for money, and its budget is small. It doesn’t have the resources to tackle a $23 million dollar problem.
And because of its lack of leadership in driving real business outcomes like revenue, market share, growth and margins, HR rarely commands enough operational respect from the organization to get them to make the big changes involved in actually improving employee engagement.
This is true even when the HR executives themselves are respected and very deserving of it. The problem is power, not personal disrespect. In fact, the problem persists even when CEOs officially declare employee engagement to be “mission critical” and empower HR to “take the lead on employee engagement.” We have never seen it work.
Not. A. Single. Time.
4. Human Resource Departments Excel at Process, not Results
Want to develop hiring practices that comply with the law or company goals for combating bias against minorities? Call your HR department. Want someone to run your benefit election program? HR to the rescue!
Want someone to execute a transaction, raise output, or help you strategically retool your company’s operations? Run from HR like your life depends on it!
I once participated in a startup “accelerator” with a very large corporate partner. It was designed to help the startups partner with that big company. The company’s CEO had built and blessed the accelerator and spent millions to make it happen.
HR expressed an interest in piloting our solution. “It’s exactly what we need,” a senior executive told me. I let them know that we needed to launch sometime before the end of the accelerator in 11 weeks.
A younger HR executive was present. He came across interpersonally as competent, breezy and intelligent, with the virility that is typical of jockish, young male executives.
My proposed timeline transformed him instantly into a stereotypical shushing librarian. He actually started to stammer . . . “Oh that’s way too fast. I mean we have processes, and procedures. . . yes, processes and procedures,” like a cartoon bureaucrat.
His boss laughed this off and said it would be fine and assured me that “we can certainly make this happen.” Unfortunately, his boss delegated the issue to the young executive, who from then on took a couple weeks at a time to return calls or emails. His department never did anything.
Well, they did do one thing. When another department decided to pay for a pilot, this same young executive caught wind of it and injected himself, making sure to slow down the process by about two or three months. He was feckless at moving forward but gifted at gumming things up.
5. Human Resource Departments Are Rarely Staffed by Innovators or Early Adopters
Employee engagement is a sticky problem and a major source of competitive advantage. Many old solutions are not working. In the resulting rush to embrace new solutions and gain a competitive advantage, the last thing you want is a late adopter or laggard leading the charge.
But, like government bureaucrats, most HR executives appreciate well-worn processes and deliberative approaches, and have a strong distaste for risk. The good people running these departments often took these jobs to be insulated from the risky, results-oriented fields of sales and marketing or operations. Like lawyers and other professions that follow a relatively pre-ordained path, the comfort and the certainty of that path attracts people who are exceptionally risk averse.
Risk averse people are not early adopters. If you want someone to lead, you can’t wait for someone who wants to follow everyone else.
***A note: no HR leaders were harmed in the making of this listicle. I have friends and family in HR, and love and respect them. Most of them agree with the above claims.