Why Are U.S. Businesses Falling Behind in Employee Engagement?

The U.S unemployment rate is at its lowest level in years and the nation’s workforce is moving toward full employment. As a result, replacing workers who leave isn’t getting any easier – or less expensive – for employers. Businesses are still competing head-to-head for the best available talent, spending precious dollars to replace trained and productive workers who have decided to leave. However, even faced with turnover expenses and productivity interruptions, many U.S. employers are apparently taking a pass when it comes to proactive employee engagement.

In its study, Midsized Businesses: Poised to Lose Balance in Time of Uncertainty, the ADP Research Institute® (ADP RI) assessed current attitudes of U.S. business owners that staff between 50-999 workers. The study revealed that in many midsized businesses uncertainty is driving decision-making. Companies are focusing on other issues, not employee engagement.

Is there a new business logic at work? Is a period of business uncertainty an opportune time for employers to back off on deploying talent management tools that can have a positive impact on the management and retention of needed talent? Or have businesses simply taken a wrong turn when it comes to understanding employees and their needs?

Workers are human capital – and a business asset

Although methods, behaviors, and values carry from business to business, for many organizations, their workforce is their largest, most important and, quite possibly, their most expensive asset. Workers are an expression of who a company is and the means through which organizations overcome challenges and achieve goals. Sound management of human capital typically includes the alignment of organizational and employee goals. That is unless there is a disconnect.

In too many instances, employees and employers see the world through a different lens. While employees put more emphasis on improving and expanding their individual capabilities as a means toward achieving success, many companies continue to be focused on fixing employee weaknesses instead of leveraging their strengths. For example, according to another recent ADP RI study,1 less than 50 percent of employees surveyed felt that the training they receive helps them perform to the best of their ability, while two-out-of-three employers surveyed said their employees were adequately trained to do their jobs. Such a gap between employer and employee can hurt corporate strategies and the achievement of common goals, like maximizing profitability through greater employee productivity and improved client satisfaction.

Falling behind eventually leads to the pain of catching up

As many businesses have reportedly shifted from proactively engaging their human capital to adopting a more reactive – and, perhaps, less informed – management posture, this mindset can cause significant unintended consequences, such as the pain and expense of playing competitive catch-up. The fact is once competitive ground is lost, often it is very difficult if not impossible to regain, especially in highly competitive markets and industries.

1 Fixing the Talent Management Disconnect: Employer Perception vs. Employee Reality in the U.S. Midsized Market, ADP Research Institute, 2017.

About this report: The ADP Research Institute conducted an online survey among 756 business owners at midsized companies (defined as those with 50 to 999 employees). The survey was fielded in November and December 2016 (survey was launched post-presidential election). This was the 5th consecutive year conducting this survey. Over 3,700 business owners have participated in the survey over the 5-year period.

TAGS: Human Capital Management Human Resources Compliance