Dive Brief:
- Overall employee engagement is stable, but multiple factors related to productivity, retention and strategic execution are not keeping pace, according to a new report from HR research and advisory firm McLean & Co.
- While nearly 80% of respondents said they expected to stay with their company a year from now, the report found that total compensation was the lowest-scoring driver of engagement, at 52%. Meanwhile, career advancement and development was also on the low end, at 58.3%.
- In addition, 40% of employees reported higher job-related stress compared to last year, and department collaboration was also low, at 54%. The report said there has been no improvement reported on the collaboration metric since 2022, “underlining ongoing communication challenges.”
Dive Insight:
Organizations that are adept at delivering a strong employee experience are more than twice as likely to report high workforce productivity and nearly twice as likely to meet strategic goals, per the report. However, the report also suggested that measuring engagement scores may not be enough to predict success.
“Employee engagement may be stable, but stability can be misleading,” Amanda Chaitnarine, senior director, human resources diagnostics at McLean, said in a statement. “Without strengthening the core drivers behind engagement, organizations risk plateauing performance instead of improving it. HR leaders need to move beyond measurement and focus on targeted action.”
Compensation scores showed very little year-over-year improvement, per the report, while career advancement and development issues remained the top reason employees said they left their companies. At the same time, respondents said only 23% of leaders were “highly effective at coaching employees.”
The report said that collectively the findings suggest that organizations may have “preserved employee engagement but have not yet strengthened the conditions needed to sustain it.”
McLean recommended that CHROs and HR leaders enhance career development pathways as a means to increase engagement and reduce turnover risk. In addition, total rewards strategies need to align with expectations in order to address ongoing concerns regarding compensation. Leaders also need to build better coaching and feedback skills in order to improve their support of employee growth and development.
Organizations that focus on these areas “are better positioned to translate engagement into business impact,” per the report.
A March report from McLean found that to build overall trust and engagement and increase retention employees need to see a clear link between their contributions and their compensation.
Companies also need to examine the disconnect between the behaviors that lead to promotions and the qualities employees most value in leaders. Recent research from personality assessment provider Hogan Assessments found that in the U.S. employees “strongly reject many of the behaviors commonly associated with leadership advancement,” creating tension between “promotion criteria and long-term leadership effectiveness.”