The Employee Engagement Hoax? What every HR professional needs to know

It’s hard to attend an HR conference or visit an HR website and not hear the term “employee engagement.” Deloitte’s Global Human Capital Trends 2015 report rated culture and engagement as “the most important issue overall, slighting edging out leadership (the No. 1 issue last year)” in 2015. And for good reason.

The employment landscape has changed dramatically in the past few decades. Thirty years ago there were more skilled people than there were available jobs. Employee turnover was around 4%, most of it involuntary or driven by economics. Today, educated and skilled people are in short supply, with an average turnover above 10%. Simply put, the labor market is a seller’s market — an HR challenge compounded by a stagnant employee engagement level of 32%.

This comes at a time when Big Data and mobile apps are causing a major disruption in how HR monitors engagement. But what problems are these new engagement apps really solving? And how can organizations already drowning in workforce data make the best use of even more data?

The Employee Engagement Hoax?
HR analyst Josh Bersin provides a nice overview of the history of employee engagement in this Forbes article. In short, in the 1980s companies started performing engagement surveys: annual questionnaires skillfully developed to measure how “engaged with the company” employees are.

The problem? These surveys take only a snapshot of engagement:
• at the time of year the survey is
delivered
• in the moment the employee decides
to complete it
• and with the results being seen by
leaders three or more months later
And because managers know when a survey is going out, they can influence their team’s responses. Sometimes employees don’t want to rock the boat, or are concerned about low engagement results impacting bonus pay-outs.

The result is that annual surveys — which are typically outsourced and can cost a large enterprise 100s of thousands of dollars each year — have been referred to by some as “the employee engagement hoax.” As Liz Ryan argues in her article on this topic, “employee engagement is a made-up concept that exists solely to make leaders and HR people feel as though they’ve really got an ear to the ground, even in cases where no such careful listening exists.”

Is this true?
Certainly annual engagement surveys do encourage companies to measure themselves against the average, and to treat benchmarks as goals, rather than to develop engagement goals based on their business and people strategies. Additionally, the infrequent “once a year” occurrence of surveys means that companies are blind for 12 months while they await the results of the next year’s survey. As a result, engagement surveys are lagging (not leading) indicators of organizational health, providing limited value.

Disrupting Employee Engagement
The good news: the HR technology landscape is ripe with start-ups offering exciting new engagement apps that are set to disrupt the “annual engagement survey” market forever.
• Glint,CultureAmp, and TinyHR enable
frequent, mini mobile surveys that
capture employee feedback in real
time, displaying results on a
dashboard
• Impraise, Engagedly and Happy  sup
port real-time feedback for
co-workers and managers
And the list goes on.

Yet these tools — while great at making surveys more time relevant and enabling a “feedback friendly” workplace culture — do not solve the ultimate challenge of understanding what actually engages, motivates, and retains an employee. Is it promotions, compensation, manager effectiveness, tenure, or some other more obscure factor? And does it differ for different demographic groups within the organization?

Google the term “employee engagement” and you will find countless articles offering seemingly easy fixes for engagement woes: The new rules of employee engagement. Five simple ways to drive employee engagement. What engages employees the most. Why are we so fixated on looking for generic answers to “what drives engagement”, when we already have the answers specific to our organization on hand?

That’s right.
Your transactional HR systems — your HR Management, Performance, Compensation, Payroll, Talent Management, and other HR systems — contain reams of data that, given the right analysis, can tell you more than you ever thought possible about what drives engagement for each team, role, and employee within your organization — and, even better, let you predict and get ahead of where engagement issues may occur in the future. The problem is that this data is locked away in siloed HR systems that have little to no analytic ability.

This is where workforce analytics comes in.Analysis of an engagement survey’s results is not analytics.
When you analyse engagement survey results, you aren’t able to uncover employee dynamics or answer WHY one group is engaged and another is not. How many times have HR and business leaders reviewed the results of engagement surveys and then had to rely on guesswork or intuition on what to change?

True analytics get to the root causes of engagement issues and enable you to develop better action plans, which are grounded in fact-based insights about employee dynamics. Your engagement survey results, whether annual or “pulsed” throughout the year — are only one of many data points to take into consideration.

Workforce Analytics, when done well, will bring together data from all your HR systems, including your engagement survey and/or employee feedback platforms. Great workforce analytics will look across all the hundreds of employee attributes (taken from all your different HR systems) to answer the WHY and HOW questions like:
• Why does a specific team or role or
demographic have an issue with
engagement?
• What is the connection between
engagement and performance or
retention?
• How can we measure the results of
HR programs designed to drive
engagement and, ultimately,
business outcomes?
• Is engagement driving resignations
or absenteeism in a way that impacts
business performance?

The great irony is that today many large companies spend more money on relatively low value annual engagement surveys than they do on workforce analytics — yet workforce analytics is a top priority and capability gap, as identified in the Deloitte’s Global Human Capital Trends 2015 report, and is proven to provide significant business benefits.

In the next few years, employee engagement will evolve dramatically. In an era of Big Data and mobile apps, the employee engagement revolution presents both enormous promise and, if not managed right, pain to HR. In the “war for talent” to come, the companies that use workforce analytics as the key to unlock the masses of data in their HR systems will win.

The Employee Engagement Hoax? What Every HR Professional Needs to Know

Weisbeck is Chief Strategy Officer at Visier.com and was Senior VP and General Manager at SAP