Through the ups and downs of your business, the people behind your company name will play a large part in its rise or fall. Like any major element of your business, your workforce and Human Resources (HR) function should be regularly evaluated to ensure they are moving the company in an upward path.
All businesses are faced with 5 key areas of HR risks. If not addressed proactively, these factors will leave your organization overly susceptible to an underperforming workforce and excessive employee loss.
#1. Employee Retention
Your business is your long-term priority, but have you considered what keeps your employees connected or disconnected from your organization? Most likely, it’s employee culture – or the lack thereof. Employees stay when they like who they work with, are treated well and feel part of the organization’s mission.
As important as culture is, it is not something many employers purposely set out to create. But it should be. Culture is shaped by a purposeful tone set at the top and is evidenced by resulting employee behavior. Ask yourself objectively: are my key employees living the core values of our firm or veering away from the culture we want to maintain?
An effective HR department will be monitoring and living out the desired culture along with you. If you don’t have an HR department, a core group of employees can be designated to monitor and promote it.
A positive work culture can be fostered in many ways, such as creating opportunities for employee bonding and facilitating ample communication between leadership and staff. Executing this bonding and communication has become more challenging during the COVID-19 crisis, but it is even more essential to think outside the box and keep employees connected as the workforce operates remotely.
Make sure the communication goes both down and up the chain of command. Employees will not feel as tied to the organization if they are only being talked at. Give them channels to communicate with firm leadership, which can also provide you with some of the most important insights into what is going right or wrong in your office culture.
#2. Employee Compensation
With many companies focused on containing costs and freezing pay raises or bonuses during the economic downturn, it is more important than ever to be creative in the ways you are compensating your employees and communicating these benefits to them.
Utilizing a “total rewards strategy,” your company can demonstrate tangible and quantifiable benefits of working at your organization. Through a brochure or digital package, lay out the value of all benefits, salary, bonuses, health insurance, supplemental insurance, fringe benefits, paid time off and other employee-related costs that equate to the full value of their employment. Make sure to include all non-monetary and performance-based rewards.
Smart companies will take a “salary band” approach to setting employee salaries – defining a pay range for each level of employee and ensuring salaries fall within the appropriate one. Don’t wait for your employees to ask for competitive pay or find it somewhere else. Periodically benchmark your salaries against industry norms and make necessary adjustments. In addition to staying competitive, this strategy will help prevent inconsistencies between employees and make it easier to determine salary increases each year.
#3. Work-Life Integration
In today’s stressful and fast-paced existence, employees may find value in getting paid less if it means they can better balance their lives in and out of the office. Offering part-time or flex options to employees in this situation can sometimes mean the difference between retaining a key employee or losing them to a more flexible employer.
Flex options can include variable days, customized hours, telecommuting options and sabbaticals (during off-peak seasons). Many employees will not choose these flex options, however, if they think doing so will affect their ability to reach their goals or if they deem reduced hours incompatible with their current workloads. If you want to genuinely offer flex options to avoid employee burnout and gain a competitive edge, you need to give employees the resources, support and clear guidelines to help them succeed in and out of the workplace. In turn, employees need to be accountable to goals and deadlines.
#4. Career Planning & Progression
Your responsibility to your employees should not end with providing them a salary and job responsibilities. Employees will want to stay with employers who also value and enable their career progression. If you do not have one already, design your organizational chart by department to map out the progression of positions available in your company. Include descriptions that allow employees to understand how the roles are gradually elevated and connected.
Make sure your employees understand their current roles and where they are headed, as well as the skills they need to acquire to reach the next level. Performance evaluations are an excellent time to communicate and measure this progress. If you do not have a formal employee evaluation program to enable regular feedback on performance and goal setting, you are missing out on one of the most important and cost-effective ways to earn the trust, respect and loyalty of your employees.
To the extent possible, support your employees’ continuing education and advanced degree pursuits, through in-house education, tuition assistance and mentorship programs. But don’t only have these programs available – communicate and encourage involvement from your eligible employees and remove any internal obstacles to their success.
Another way to help your employees develop their careers and become further invested in your organization is cross-training. Giving them exposure to other roles within their skill sets will not only increase their qualifications but also make your organization less susceptible to lost employees. When an employee leaves or is out on leave, having backups in place will benefit both the business and the employees involved.
#5. Talent Acquisition
Before any employee can become a key team member, you first need to be able to identify and attract them in the recruitment process. Oftentimes, the inability to find or secure the right candidates is due to mistakes made in this selection process.
The first mistake when filling certain roles is overlooking entry-level recruitment. While experience might feel like the safer choice, entry-level candidates are often a great way to get a “clean slate” to train in your organization’s culture and procedures. These employees often bring fresh perspectives, excited attitudes and ambition that far outweigh the extra training you need to provide up-front.
Another oversight is the lack of an employee referral program. Providing a monetary or non-monetary incentive for employees to refer their friends and colleagues will usually more than pay for itself in the long run. Employees are far more likely to refer the highest caliber candidates because they know the recommendations are a reflection of themselves as ongoing members of the organization.
The interview process is also ripe for errors that could cost your organization qualified candidates. Choose carefully who is in the interview room. Just because someone has a functional reason to be there doesn’t mean they have the attitude or skill to represent the company well. Select employees from the team who are excited about where the organization is headed, feel comfortable speaking with new people and have the ability to assess any technical skills that are required.
When appropriate, include personality testing and technical evaluations in the interview process, especially for very visible, highly compensated roles.
In addition to these 5 major areas of HR risk, which are all exacerbated by the COVID-19 crisis, there are risks inherent in the pandemic itself. Employee morale and loyalty can be severely tested in situations where furloughs and layoffs are inevitable. If you find yourself needing to make these tough decisions to contain employee-related costs, take purposeful steps to make the process easier for those who are leaving and staying. To the extent possible, communicate with remaining employees about the potential and timeline to bring furloughed employees back. Discuss how laid-off or furloughed employees’ roles will be covered. Offer departing employees job coaching and resume building services to support them in this transition.
The COVID-19 crisis has also posed challenges to work-life integration. Remote work environments make the separation between work and home life even more blurred. Encourage and enable your employees to keep these priorities intact. Continue to understand and respond to their need for flexibility to fulfill their roles outside the office – even if these roles are being performed under altered circumstances.
Employee bonding during a pandemic will need to take on different forms in a remote workforce, but some of the same best practices apply. Try to hold as many of the activities during the workday to avoid infringing on important personal or family time. And get ideas from your employees on what they want to do – not just what you think they want to do.
Finally, continue to pay close attention to the new temporary family and medical leave allowances under the Families First Coronavirus Response Act, which are still effective through December 31, 2020.
The COVID-19 crisis should not be a reason to delay or digress from improving your HR function. Rather, it should be a catalyst to do more to retain and encourage employees in the most uncertain of times. Now more than ever, your people are your most valuable asset.