Disconnect extends to salaries, benefits, leadership and HR departments, study shows
Are HR professionals in tune with their company’s employees? Or are they so out of touch that they’re telling the C-suite that workers are far more engaged and satisfied than they really are?
In many respects, it appears to be the latter, according to the ADP Research Institute.
The Institute’s white paper, Human Capital Management's Disconnect: A Global Snapshot, found that this disconnect extends to senior leaders who are also largely out of touch, irrespective of company size or location.
The white paper compiled the findings from three ADP Research Institute studies of employee attitudes, and HR’s perceptions of those attitudes. Collectively, the three studies surveyed more than 8,000 employees, HR professionals and company executives in Argentina, Australia, Brazil, Canada, Chile, China, France, Germany, India, Italy, Japan, Mexico, Singapore, Spain, the United Kingdom and the U.S.
The findings “really surprised us, because the perception is very different from the reality,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute. “The disconnect was very clear when you bring those two different datasets together, the employees’ view versus the employers’ view.”
ADP is a global business outsourcing and human capital management provider. The ADP Research Institute studies workplace issues.
Compensation and Benefits
Globally, employees consistently ranked the level of their compensation and benefits less favorably than did the HR people who are tasked with providing those benefits. When asked if they would give the quality of their pay and benefits four out of five stars, 52 percent of HR professionals at U.S. companies did so, compared with only 46 percent of workers. The greatest disparity was in Latin America, where 63 percent of HR pros gave pay and benefits high marks, compared with 45 percent of employees.
“Competitive compensation and benefits packages are among the most important vehicles for companies to retain talent,” Yildirmaz said during an interview with SHRM Online. “Companies have to make it a priority to re-evaluate those packages and [to get] regular feedback from the employee. What’s important is that companies show to their employees that they are aware of their concerns. The other important thing is benchmarking against peers to ensure [pay and benefits are] aligned with market trends, and to show employees they have fair packages.”
Grading Leaders and Managers
Noteworthy in the white paper was the great difference in perception between HR and employees on how companies are managed. Employees tended to rate many management functions, particularly those dealing with workforce and talent management, much lower than HR. This was true in all the countries surveyed and across nine talent management areas, including opportunity for professional growth, training and support from management.
U.S. employees rated the quality of their senior leadership almost 17 percentage points lower than did HR (42 percent vs. 59 percent). They rated the HR function 20 percentage points lower (39 vs. 59) and career opportunities 6 percentage points lower (35 vs. 41).
Employees’ perceptions of how well their organization is managed declined the larger the organization was. At U.S. organizations with fewer than 50 workers, 60 percent of employees believed their organization was well managed. At places with 50 to 999 employees, 46 percent felt the same way, while at places with 1,000 or more workers, 44 percent did.
When it comes to talent management, HR leaders in companies from all regions consistently viewed themselves as more aligned with their employees than they actually were. In the U.S., 68 percent of HR leaders said employees were getting the training they needed to do their jobs well. Only 55 percent of employees agreed with that. Fifty-six percent of HR pros said workers had adequate opportunities for professional growth, compared with 46 percent of employees. And while 63 percent of HR leaders said employee performance evaluations were fair and appropriate, only 53 percent of workers felt the same.
Getting Answers from HR
Workers’ relationships with their HR departments have a major impact on employee retention.
HR and senior leaders were significantly more satisfied than employees with the ease of getting answers to HR and benefits questions. This disparity was greatest in the Asia-Pacific region and in the United States.
In the U.S., 56 percent of employees felt that getting answers to their HR and benefits questions was “very” or “extremely” easy, compared with 79 percent of HR pros. In the Asia-Pacific region, only 44 percent of workers found this process “very” or “extremely” easy, compared with 70 percent of those in HR.
The ease of dealing with HR contributes significantly to workers’ willingness to stay at an organization. In the U.S., two out of five employees indicated an intention to leave their companies within the next 12 months. According to the study, dissatisfaction with HR processes, policies and functions was a key reason for that intent to leave.
Overall satisfaction at a company also contributes to employee loyalty. In the U.S., 63 percent of employees were “extremely” or “very” satisfied with their companies, while more than one in three (37 percent) were “somewhat,” “not very” or “not at all” satisfied.
“From an HR perspective, they don’t realize that this gap actually exists,” said Julie Arzonico, senior director for market insights at the ADP Research Institute. “HR does not recognize just how unsatisfied employees are.”
The implications for companies, she said, are sobering.
“Employee perspective drives retention,” she said. “I would think HR needs to take a step back and re-examine policies, procedures and programs. While they may think they’re working, we’re seeing in reality that they’re not.”
Dana Wilkie is an online editor/manager for SHRM.
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