Create a culture that means business™
Leading a team can be scary. Leading a company can be downright terrifying. A single misstep may cost you the trust of your workforce, which shrinks engagement, shatters productivity, and devastates your bottom-line results. Luckily, it’s possible to avoid the HR nightmares that create a toxic culture and send businesses into the abyss. These are 13 HR nightmares, along with steps you can take to protect against the disengagement monster.
1. A disenchanted and disengaged workforce
Across the United States, employee engagement levels fluctuate over time depending on a variety of factors. Generally, the total percentage of highly engaged workers hovers around 33 percent. However, within specific organizations, engagement can be much higher – or much lower – depending on the culture you have created.
That’s a chilling fact for leaders of companies with low engagement levels, because the cost of a disengaged workforce is hair-raising. United States employers lose between $450 and $550 billion every year due to employee disengagement.
There is no single solution for keeping engagement levels high, but you can make sure you are on the right track with a comprehensive engagement strategy. First steps include an examination of your company culture, review of management practices, and a renewed focus on employee voice, development, and recognition.
2. Alarmingly authoritative leaders
No one likes a bully. Managers who choose to direct instead of lead, shame instead of coach, and criticize every little thing tend to provoke excessive stress and anxiety among team members. That’s a problem, because instead of focusing on doing their job well and delivering exceptional work performance, employees are too busy trying to stay out of the line of fire.
If you are an authoritative leader, it’s not too late to change. In fact, the solution is surprisingly simple. Make it a point to ask more questions and solicit more feedback, then act on the information you collect. Soon, collaborative action planning will become part of your team’s culture, and the terror of an excessively authoritative leader will get closer to vanishing.
3. The haunting effects of limited recognition
Employee recognition is directly connected to engagement, and as you know, low engagement can hurt your business in various ways. Deloitte researchers did in-depth studies on this topic, and they learned that companies with a culture of recognition enjoy 31 percent less voluntary turnover than their low-recognition peers.
Successful recognition programs are more than formal annual top-performer events. Instead, they offer opportunities throughout the day – every day – for team members to recognize each other for small and large successes. The results can be shocking. For example, when Meijer rolled out its mteam recognition program, the company celebrated 10 million recognition moments within just three years. In addition, 93 percent of people leaders are active on the platform monthly and individual users are receiving an average of 7.7 recognitions each month.
If recognition isn’t yet ingrained in your company’s culture, there is no need for despair. There are comprehensive digital platforms available that make it simple and affordable to implement and manage inclusive recognition programs.
4. The ghastly consequences of ignoring employee voice
Many business leaders feel good about putting out an annual employee feedback survey. Unfortunately, annual isn’t enough. Employees overwhelmingly prefer to work for organizations who encourage their voices on a continuous basis and act on their feedback in a meaningful way. When employees feel their voices are heard, they are 4.6 times more likely to feel empowered to perform at peak levels.
Experts in organizational behavior know exactly what works. Business leaders must offer opportunities for employees to share feedback “on a real-time, local basis.” Supervisors can then take immediate action to address small issues first to ensure their employees feel heard – if you wait too long to respond to feedback, it can lose meaning for employees.
Of course, the idea of manually collecting and analyzing employee feedback is alarming, but there is no need to fear. Voice of the employee solutions can help do the data-gathering and analysis work for you, so you can take timely action to drive engagement. With the right tools, you can put employees first and empower managers to move the needle on engagement.
5. Why payroll errors should petrify you
Believe it or not, compensation isn’t the biggest factor in employee engagement. Being paid fairly is important for meeting a baseline level of job satisfaction, but more money doesn’t necessarily translate into more discretionary effort from team members.
However, a problem with pay, such as a miscalculation of deductions or an issue in getting checks to staff on-time is an HR nightmare. If you can’t resolve the concern quickly, you face a long list of disastrous consequences, including:
- Lots of time spent unraveling the issue – time that should have been devoted to other critical tasks
- Delays in tax payments, which often incurs penalties
- Frustration that rapidly escalates to anger among impacted employees
If payroll errors happen regularly and staff find the resolution process arduous, preventing turnover gets quite tricky. Companies that can’t afford to keep an expert payroll team in-house often discover that outsourcing this task is more cost-effective than working through frequent mistakes.
6. The frightening failure to provide performance feedback
In decades past, the annual performance review was the gold standard of performance feedback, and organizations that had this formal process in place felt confident they were meeting the needs of their team. For the most part, they are flat-out wrong. In one study, only 14 percent of employees said they strongly agreed that they were inspired to improve their performance based on their performance reviews.
Today’s workers want to hear from their leaders far more often than once a year – daily, if possible. More than that, they want meaningful conversations that offer an opportunity to grow and develop. Unfortunately, it’s simply not happening. Among millennials, a Gallup study showed just 19 percent agree that they receive routine feedback, and a mere 17 percent found that feedback meaningful.
Leaders can turn those figures around quickly by reconsidering their communication habits. Prioritize frequent check-ins and encourage two-way conversation. Learn what’s important to your team members and share what’s important to you from a performance perspective. This sort of constant contact makes it easy to have performance-related conversations on the fly, whether the feedback is good or bad, so your staff is better able to make real-time changes that deliver high-quality results.
7. The madness of inconsistent managers
Contradictory or inconsistent communication is the path to madness. When managers give conflicting instructions, respond differently to the same behaviors and outcomes from one day to the next, or demonstrate an obvious preference for certain team members over others, employees have no sense of security. That is a quick way to deplete employee morale and destroy engagement.
How much can inconsistent leadership drain engagement? According to Gallup, the figure is frightening: as much as 70 percent of employee engagement can be traced back to local management.
Put your focus on coaching your team in a fair and consistent manner. If a change is needed, be transparent with your team, outlining what’s different and what they can expect from you going forward.
8. The death of professional development
The dread of being trapped in a dead-end job plays a major role in voluntary turnover. On the other hand, employees stick around when they’re confident they can grow and develop their skills through new experiences, eventually allowing them to take on bigger, more complex challenges.
Sadly, the research shows that most organizations aren’t taking this threat seriously. One Deloitte study noted that just 18 percent of respondents felt their companies offered opportunities to actively develop their careers. A full 54 percent said that there were no programs available from their employers to build the skills necessary for professional growth.
Companies committed to attracting and retaining top talent must prioritize learning and development, but that doesn’t necessarily mean more hours in the corporate classroom. Smart business leaders are developing a menu of options that include virtual training, education assistance, mentoring, and more, allowing staff to design a program that fits their interests and their unique skills gaps.
9. Adapting to change: thrills or chills?
No matter how effective your organization is, things can’t stay the same forever. New technology, changing consumer expectations, and developments in the economic environment mean adjusting everything from operations to employee benefits. Companies that insist on staying stagnant – or those that fail at effecting true transformation – quickly fall behind the competition.
The fact is that 70 percent of organizational change efforts fail. Leaders lack the ability to motivate and inspire, which has a chilling effect on the workers expected to drive the transformation. Employees fear the unknown and can quickly resist changes in the workplace.
It’s possible to create change that thrills instead of chills. The key is making sure your employees know it’s a treat – not a trick – by following these steps:
- Be proactive in preparing for resistance.
- Enlist leaders throughout the organization to make a compelling case for the change.
- Involve team members in planning the change.
- Listen to how your employees feel and respond in a supportive manner.
- Recognize and celebrate individuals and teams for small and big wins throughout the process.
Change is constant, but adapting to it doesn’t have to be an HR nightmare. Create a flexible culture that embraces innovation, so you can respond to any sort of disruption.
10. Haunted by a negative employer brand
It’s a digital world, and your prospective candidates use social sites to vet your company. If your present or past employees have posted negative reviews, it’s an obstacle to attracting highly talented team members in the future.
Consider these stats from the researchers at LinkedIn: Organizations with a strong employer brand enjoy 50 percent more qualified applicants for their open positions, a 50 percent reduction in cost per hire, and a 28 percent reduction in turnover. Among those in search of a new opportunity, 75 percent say they consider employer brand before putting in an application.
Creating a strong employer brand is impossible if, in fact, your organization’s culture is toxic. In that case, you have to start by building a strong, healthy company culture focused on recognition. Organizations that rate their culture of recognition highly are 79 percent more likely to give their employer brand a high rating.
An investment in marketing your employer brand delivers impressive returns, as you will get first pick at the most qualified applicants. Even better, once on board, your top talent is likely to stick around long-term, which means big savings from a reduction in turnover.
11. The blood curdling results of poor benefits management
A strong compensation and benefits program might not make the difference between “neutral” and “highly engaged” workers, but it certainly matters in getting them from “disengaged” to “neutral”. It’s just not possible for employees to work at peak levels if they can’t take care of basic needs, or if they must put tremendous amounts of time and effort into navigating poorly managed plans.
On the surface, it might seem less expensive to outsource or use entry-level workers to manage benefits programs, answer benefits questions, and complete benefits-related transactions, but ultimately, this attempt at expense reduction will backfire. For example, employees take it personally when they have to submit mountains of paperwork and argue with providers to get basic medical services covered. That means poor engagement, lower productivity, and damage to your employer brand.
Your goal is to ensure that your employees feel you are committed to their health and well-being. This includes making it easy to take advantage of the benefits you offer, such as medical, dental, and vision coverage. If you’re successful in showing your employees that you support their well-being, they may join the 89 percent of workers from companies that support well-being initiatives who recommend their organizations to others as a good place to work.
Some organizations take employee wellness a step further, with a collection of programs that encourage healthier lifestyles. Examples include creating opportunities for exercise, making weight loss and smoking cessation services available, and offering access to no-cost Employee Assistance Programs that specialize in emotional well-being.
12. The terror of high turnover
Some turnover in an organization is healthy. On the voluntary side, employees leave from time to time to pursue other opportunities, and occasionally, they leave the workforce altogether. On the involuntary side, a certain amount of turnover is the natural result of managing performance and addressing policy violations.
Average turnover rates vary by industry, so be sure you are comparing your rates to the right
benchmarks. For example, while average turnover across all industries might be around 18 percent, retail establishments average closer to 65 percent and restaurants come in at around 73 percent. Whatever the normal range is for your industry, it’s critical to stay on the low end. Higher-than-average turnover signals systemic issues in the company, and it’s likely to cost you a fortune.
The first step in addressing high turnover rates is to uncover the hidden ghouls that are causing your problem. This requires collecting and analyzing data. Are your new hires resigning in droves? There may be an issue with your recruiting, training, and/or onboarding processes. Is a specific department having trouble keeping staff? Take a closer look at local leadership. Does your top talent leave abruptly? You may not be offering sufficient coaching and development opportunities. Once you have pinpointed the root cause of the issue, take decisive action to turn things around.
Pro tip: Learn more about the current state of engagement and retention by accessing our latest report.
13. A cursed company culture
Some organizations never quite master the skill of creating and maintaining a strong company culture. Other organizations have reasonably healthy cultures until a sudden, unexpected event sends them spiraling out of control. In either case, a culture built around fear is a curse. It destroys employee engagement and disrupts productivity, in addition to prompting turnover and ravaging your employer brand.
Experts at State Street Global Advisors have put a value on organizational culture. They estimate that along with other intangible assets, culture is responsible for an average of 52 percent of a company’s market value. In some industries, that figure goes even higher – perhaps 90 percent. Developing a healthy culture and maintaining culture continuity through sudden changes is non-negotiable in today’s highly-competitive marketplace.
The list of HR nightmares that can send your business to its grave is long, but there is no need to howl. There are plenty of effective tools and resources available to keep you safe. Learn more about building a resilient workplace by accessing our webinar, “Fostering Workplace Resiliency and Connection In Uncertain Times.”