According to a new survey from Paycor, the majority of CFOs (61 percent) don’t think HR impacts the bottom line. The survey also reveals another rift: CFOs say the most important metric is total labor spend, while HR leaders say it’s employee engagement and retention.
HCM company Paycor just released those findings in a new report titled “People Management–Perception vs. Reality,” which highlights common misperceptions around employee engagement, turnover and compliance in 2019.
“When it comes to key business issues of employee engagement, turnover and compliance, this research proves that there is a disconnect between what business leaders perceive is happening and why, and what is actually taking place and how to solve it,” said Paycor President Stacey Browning. “However, there is one common thread that is always on the front lines with the ammunition to provide a solution when these problems rear their ugly heads–the HR department. It’s clear that HR impacts every aspect of the business and, as such, impacts the bottom line–more now than ever before.”
According to Paycor, to persuade CFOs to invest in employee retention–a focus area that will definitely impact the bottom line–”HR needs to tell a different kind of story based in metrics across the entire business.”
For example, analyzing turnover data across the organization (by location, manager, department) to understand what’s working and what isn’t; drilling down into which departments or locations have excessive absenteeism to pinpoint management problems; and placing a strong emphasis on the onboarding process to mitigate the 90-day failure rate.
To get employee engagement the attention it deserves, alignment must come from the top. The best way to do that is with compelling metrics that tie employee engagement to the bottom line. Employee-engagement surveys provide valuable information and data to help understand what employees are thinking and feeling, as well as establishing that their input is valued. From there, positive organizational change can be implemented with the feedback received.
On the topic of turnover, 43 percent of organizations don’t track the costs to recruit, hire and onboard new employees, according to the survey.
When it comes to turnover, leadership across the board (CEO, CFO and HR leaders) perceive compensation as the primary driver. However, according to a Gallup poll, employees cite “bad bosses” as the No. 1 reason for quitting, followed by lack of recognition and burnout. In fact, compensation did not appear in the top three reasons employees leave a company.
Some of the most important things HR can do to address the universal problem of poor management, according to Paycor, include working with business functions to set clear expectations on what the organization values in a leader and how success will be measured, sharing company updates and strategic direction with managers so they can communicate critical updates, show team members how their individual contribution is making an impact and invest in managerial development.