Is HR Tech the Answer to the Great Resignation?

By carefully rebuilding performance review structures, organisations can better create relationships with employees whose attitudes have shifted over the last two years.
11 May 2022

Source: Personio

The economic wariness of the pandemic has resulted in many employees losing their jobs and the subsequent economic havoc has impacted many aspects of daily life. Some companies have rightly responded to the situation by prioritising the health and safety of their employees.

While some companies successfully met employee expectations in the last two years, their endeavours might not have come up to scratch. According to a study by Personio, 46% of employees in SMEs across Europe plan to move jobs in the next 12 months.

As we move ahead, employee expectations will become diverse and individualised. Increased inclusion and work-life balance needs will grow among employees and enterprises will embrace new ways to support the so-called “Great Re-evaluation.”

Some 71% of employees want better work-life balance and to spend more time with their families. Employees expect organisations to initiate agile strategies that can support flexible and hybrid work. Yet a study by the IBM Institute for Business Value states that only half of employees feel their companies met their priorities well in 2021.

Personio

Source: Personio

Explaining the Paradigm Shift of Employees’ Expectations

Many employees are displeased with their career advancement. Around 37% feel that the pandemic has held back their careers, while increased burnout at work has meant that more Gen Z and Millennials are job-hopping.

Moreover, 90% of HRDMs (human resource decision-makers) in European SMEs conclude that they suffer from skills shortages, poor staff retention or are experiencing hiring issues. Pete Cooper, Director of People Partnering at Personio, believes that employee turnover can heavily impact a business’s bottom line:

“For employers, the priority shouldn’t just be to stop people leaving – it needs to be about retaining and maintaining a motivated, productive and engaged workforce.”

Nonetheless, as the world has fundamentally changed, employees’ attitudes are shifting. They are giving more importance to inclusive leadership, organisational values and flexible, agile work environments. While money or pay rises can help people stay, 32% of employees consider both a lack of appreciation and a stressful work environment as significant reasons for quitting.

Ross Seychell, Chief People Officer at Personio, says that employees no longer care about competitive compensation packages: “The question will be what broader rewards employers can offer that will keep people engaged and motivated.”

He added that excellent quality discussions around performance and career progression are crucial. They highlight personal push and pull factors and help leaders identify overworked or frustrated employees. They also ensure they get the appreciation and career progression opportunities they need.

Personio

Source: Personio

Using Reviews Cycles to Grow Retention

On the brighter side, HRDMs are employing their learnings from the current environment, with 96% of HR leaders working on an action plan to retain their employees. They are trying to nurture engagement with a future-focused and growth mindset as organisations return to normal.

One of the best ways to kickstart that is through performance reviews and management. Traditionally, HR evaluated performance more from a transactional or monetary point of view. But later on, it became pretty challenging to continue with this model due to low inflation and tiny performance-pay budgets.

So what should performance reviews entail? Shifting away from forced ranking and focusing on individual accountability can help organisations to nurture teamwork. This approach needs rich, immediate feedback from managers who commit to frequently communicating with their employees during an entire project’s lifecycle. This closer communication helps employees shape their skills for the future.

Unfortunately, 18% of employees say their manager does not formally review their performance. Moreover, only 9% of organisations give continuous feedback to their employees.

Two major reasons for this are a lack of resources and more involvement in admin tasks. These limit HR’s focus on strategic decision-making and steal away the necessary time to spend with employees.

While constant feedback and communication result in more valuable, meaningful discussions around employee satisfaction, traditional HR systems were not designed to provide continuous feedback.

HR leaders need tools and systems to help their teams eliminate irrelevant, daunting manual tasks so they can focus on these performance reviews and feedback discussions. Nevertheless, organisations have at least begun to jump hurdles to tech adoption and advancement. The willingness is there, but the tools are lacking.

How Personio is Helping Organisations Adapt

Personio allows HR teams to focus on the main pillar of their organisation: their people. The people operating system Personio automates HR processes, enabling professionals to focus on value-added tasks and accelerating their strategic impact on organisations.

A leader in the G2 Small-Business Europe Regional Core HR Grid®, Personio takes care of recruitment, onboarding and offboarding, absence management, preliminary payroll, performance management and training. Personio kick-starts automated performance reviews and guides stakeholders to share impactful feedback, without HR having to organise the process.

VP of People at Mentimeter, Anna Gullstrand, needed an HR solution that helped the company address its growing HR needs and to reflect the company culture. Personio enabled Mentimeter to tailor its experiences while keeping all required data safe, secure, and fully compliant with GDPR:

“When the board asks for fresh numbers regarding the growth of the company or metrics regarding diversity, it is just one click away, and I have what I need. Personio helps us spend a minimum amount of time on rules and compliance and spend time on things that matter and gives us high value as a team.”

HR teams and leaders have an incredible opportunity to establish transparency in performance reviews. With Personio’s automated reporting, business metrics can be used to create exciting initiatives that are aligned with their employees’ new expectations. This is how companies can boost their engagement with staff and encourage retention in the long term.

Book your free demo with Personio here.


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