The biggest threat to building an engaged workforce in 2017 is employee burnout. The newest study in the Employee Engagement Series conducted by Kronos Incorporated and Future Workplace® found 95 percent of human resource leaders admit employee burnout is sabotaging workforce retention, yet there is no obvious solution on the horizon.
In this national survey, 614 HR leaders – including Chief Human Resource Officers (CHRO), vice presidents of HR, HR directors, and HR managers from organizations with 100 to 2,500+ employees – provided a candid look at how burnout drives turnover, what causes it, and why there is no easy solution despite 87 percent of respondents calling improved retention a high / critical priority.
- Organizations “burn and churn” talent, making it tough to build an engaged workforce.
- According to the survey, nearly half of HR leaders (46 percent) say employee burnout is responsible for up to half (20 to 50 percent, specifically) of their annual workforce turnover.
- Almost 10 percent blame employee burnout for causing more than 50 percent of workforce turnover each year.
- Though burnout touches organizations of all sizes, larger organizations seem to suffer more. One in five HR leaders at organizations with 100 to 500 employees cited burnout as the cause of 10 percent or less of their turnover while 15 percent of HR leaders at organizations larger than 2,500 employees say burnout causes 50 percent or more of annual turnover.
- Too much work and too little pay are problematic, but many issues fueling burnout are in HR’s control.
- Unfair compensation (41 percent), unreasonable workload (32 percent), and too much overtime / after-hours work (32 percent) are the top three contributors to burnout, per the study.
- Still, HR leaders also identified key burnout factors falling under talent management, employee development, and leadership that should be in their control, including poor management (30 percent), employees seeing no clear connection of their role to corporate strategy (29 percent), and a negative workplace culture (26 percent).
- Insufficient technology for employees to do their jobs was identified by 20 percent of HR leaders as another primary cause of burnout. This is more prevalent at larger organizations with more than 2,500 employees, where it was cited by 27 percent of respondents.
- There are significant barriers preventing HR from improving retention in 2017.
- Despite 87 percent of HR leaders calling improved retention a critical or high priority over the next five years, one-fifth (20 percent) said there are too many competing priorities to focus on fixing the issue in 2017.
- Outdated HR technology is another problem: nearly one out of every five HR leaders (19 percent) reported their current tech as being too manual – i.e., lacking automation of repetitive administrative tasks – detracting from their ability to act strategically to fix big problems.
- The C-Suite must step up their commitment, too, according to HR leaders in the study, who say lack of executive support (14 percent) and a lack of organizational vision (13 percent) are additional obstacles to improving retention in 2017.
- Despite well documented costs of employee turnover1, organizations are more apt to invest in recruiting new employees as opposed to retaining existing talent.
- The survey found that 97 percent of HR leaders are planning to increase their investment in recruiting technology by the year 2020, including nearly a quarter (22 percent) who anticipate a 30 to 50 percent increase in such spending.
- However, budget was continually cited by HR leaders as a deterrent to programs that would benefit retention of existing talent. This includes 16 percent who say a lack of budget is the primary obstacle to improving employee retention in the next 12 months; 15 percent who say a lack of funding is the biggest challenge to improving employee engagement; and 27 percent who say funding is the biggest hurdle to implementing new HR-related technology, such as tools that would reduce manual or administrative work to act more strategically.
- Charlie DeWitt, vice president, business development, Kronos
“Employee burnout has reached epidemic proportions. While many organizations take steps to manage employee fatigue, there are far fewer efforts to proactively manage burnout. Not only can employee burnout sap productivity and fuel absenteeism, but as this survey shows, it will undermine engagement and cause an organization’s top performers to leave the business altogether. This creates a never-ending cycle of disruption that makes it difficult to build the high-performing workforce needed to compete in today’s business environment. Organizations should seek out and implement technology solutions that provide a proactive approach to mitigating burnout, such as the scheduling of rest during rolling periods as long as a year. Workforce analytics can also identify and alert managers to trends in scheduling and absenteeism that may indicate an employee is on the path to burnout so changes can be made.”
- Dan Schawbel, partner and research director, Future Workplace; New York Times best-selling author, Promote Yourself
“The biggest priority, and concern, for business leaders in 2017 will be retaining employees in an even more competitive talent marketplace. As the economy continues to improve, and employees have more job options, companies will have to provide more compensation, expand benefits and improve their employee experience. Managers should promote flexibility, and ensure that employees aren't overworked, in order to prevent employee burnout that leads to turnover.”
- Mollie Lombardi, co-founder and CEO, Aptitude Research Partners
“Engagement has been the workforce buzzword for the past decade. We talk about ensuring that employees are challenged, appreciated, and in sync with strategic objectives, but even when they have an intellectual or emotional engagement with their work they sometimes still feel overwhelmed. While not all burnout can be eliminated, much of it can be avoided using critical strategies that balance consistency and personalization of schedules and workload; leverage managers as models for how their team can achieve work/life balance; and implement tools and technology that proactively manage burnout or otherwise support these efforts.”
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About Kronos Incorporated
Kronos is a leading provider of workforce management and human capital management cloud solutions. Kronos industry-centric workforce applications are purpose-built for businesses, healthcare providers, educational institutions, and government agencies of all sizes. Tens of thousands of organizations – including half of the Fortune 1000® – and more than 40 million people in over 100 countries use Kronos every day. Visit www.kronos.com. Kronos: Workforce Innovation That Works™.
About Future Workplace
Future Workplace is an executive development firm dedicated to rethinking and re-imagining the workplace. Future Workplace works with heads of talent management, human resources, corporate learning, and diversity to prepare for the changes impacting recruitment, employee development, and engagement. Future Workplace is host to the 2020 Workplace Network, an Executive Council that includes 50 plus heads of Corporate Learning, Talent, and Human Resources who come together to discuss debate and share “next” practices impacting the workplace and workforce of the future. For more information, please visit: www.FutureWorkplace.com.
Research findings cited above are based on a survey conducted by Morar Consulting fielded across the U.S. between Nov. 14-19, 2016. For this survey, 614 HR professionals were asked about their views on workplace innovation and technology used in HR. The study targeted HR managers/directors, VP of HR and CHROs, working at medium to large enterprises (minimum 100 employees) across different industry sectors. Respondents were recruited by Morar Consulting through a number of different mechanisms, via different sources to join the panels and participate in market research surveys. All panelists passed a double opt-in process and complete on average 900 profiling data points prior to taking part in surveys. Respondents were invited to take part via email and were provided with a small monetary incentive for doing so. All sample surveys may be subject to multiple sources of error (i.e. sampling error, coverage error, measurement error, etc.).
Footnote 1: Per the Retaining Talent report in the SHRM Foundation’s Effective Practice Guideline Series, direct replacement costs can reach as high as 50 percent to 60 percent of an employee’s annual salary, while the total cost associated with turnover can reach 60 percent to 200 percent of annual salary (page 3).
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