A new perspective on HR policy

Is yours an ‘employee-centric’ organization? Current trends are making this approach a strategic business necessity, emphasizing employee’s views and expectations as well as the bottom line.

Traditionally, HR is on the front-line championing employee interests in ways that contribute to the success of the business. We argue here that the nature of this support has to change.

In particular, HR policy and practice now has to be much more closely aligned with the needs and expectations of individual employees. In other words, HR has to get personal.

What does ‘employee-centric’ mean?

The employee-centric organization treats employees as key stakeholders, and as a valuable resource. Priorities include a supportive working environment, with open communications, where employees feel valued and empowered, with good working conditions and work-life balance, and access to training and development.

The role of HR as business partner involves creating and maintaining those conditions, while meeting the staffing needs of the business.

With roots in last century’s quality of working life movement, and the more recent concept of job quality or ‘good work’, this has been accepted HR wisdom with regard to employee motivation for some time.

However, it seems that some organizations, faced with harsh economic pressures, have not implemented these ideas, pursuing a narrow, bottom-line approach that risks generating long-term resentment and ultimately damage to the business.

I-deals

One practice from the noughties that has not attracted recent attention is i-deals - personally negotiated arrangements that differ from those of colleagues.

I-deals can cover pay, benefits, flexible hours, and development opportunities. This approach is usually limited to ‘superstars’ with the power to negotiate special packages for themselves.

Given current trends and the pace of change, we should be thinking about making i-deals available to all.

What’s changed?

Five current trends suggest a fundamental rethink of HR policy, with a renewed focus on individual employee needs and expectations:

1. DEIB agenda: Businesses are encouraged to implement diversity, equality, and inclusivity policies. An increasingly diverse workforce means the end of ‘one size fits all’, and the need to take individual preferences into account.
2. Ageing workforce: With the fall in number of younger employees joining the workforce, businesses will need to retain older workers for their knowledge and expertise, and to fill skills gaps. This is likely to involve accommodations, such as workplace and task redesign, adapted equipment, and flexible hours.
3. Multigenerational workforce: From Boomers to Gen Z, different generations may have different needs, motives, and expectations with regard to work. Failure to respond to these differences can increase staff turnover. Experience suggests that multigenerational teams improve job satisfaction and productivity, so this in itself is beneficial, and not a problem.
4. Hybrid working: The COVID-19 pandemic opened a Pandora’s box of expectations concerning working from home (WFH) and working from anywhere (WFA). Some do, others don’t, some want a flexible mix. But the work of many is fixed in place, with no option to work elsewhere. Inequality in working conditions, however, could raise tensions.
5. Quiet quitting: Turning up for work, but doing the bare minimum, has attracted lots of attention recently. This can be the result of poor work-life balance, boredom, job dissatisfaction, lack of development opportunities, low pay, heavy workload. And this can have negative consequences for timekeeping and productivity.

In addition, companies are now being advised to provide mental health assistance, and to support staff facing the cost of living crisis. This is further encouragement for HR to tailor policy and practice to individuals rather than to the workforce as a whole.

Research evidence makes the point

A recent study of 128 major company change programs found that only 22% met their financial and reputational success criteria*. The successful companies had focused on employee needs in the following areas:

• Pay. Higher than comparable organizations, incentivizing teamwork
• Employee stock options. More generous, compared with similar organizations
• Employee satisfaction. Higher than at comparable organizations, better staff retention
• Diversity and inclusivity. equitable hiring practices to attract more women and minorities
• Women managers. Employing more women in managerial positions
• Women employees. Women make up a higher proportion of the workforce

Citing the experience of Microsoft, PayPal, and Hershey, the researchers conclude that their success was due to the focus on the employee experience: teamwork, collaboration, culture, empowerment, compensation.

There are other examples, like Southwest Airlines (which invests in its workforce), Costco (which promotes teamwork and development), Unilever (which has an employee mental health program), and Admiral Insurance Group (which prioritizes inclusivity and staff engagement).

There is of course no one ‘correct’ approach here. Policies have to be tailored to particular business and workforce needs and circumstances.

The cost-benefit calculation

Your chief exec or finance director will complain that: ‘This will increase costs’. But we have skill shortages and a tight labor market. Companies that don’t meet employee expectations will lose them to more accommodating competitors.

Nurses, for example, can find well paid, less stressful work in retail and hospitality.

Losing staff is expensive. How much does it cost your business to replace leavers in terms of recruitment, induction, training, and lost output while new hires get up to speed? When someone leaves, they take business knowledge with them; it is hard to put a price on that.

The marginal cost of individually tailored working arrangements may be much less than the long-term benefits from an engaged, empowered, motivated, and loyal workforce.

I-deals can be easier to adjust than collective agreements, increasing organizational agility in the face of rapid change. But problems can arise if some staff feel that colleagues have better deals than they have - creating a ‘them and us’ workforce. This approach has to be carefully managed, monitored, and adjusted to avoid these tensions.

The role of middle and front line management is critical in this regard, listening to concerns, ensuring that employees’ views are heard, respected, and acted on.

Training in leadership skills may thus also be required, particularly if this involves a shift from a traditional directive style to a more supportive one.

Help is available

Will managing these changes significantly increase the HR workload? Not necessarily. Not everyone will take up what’s on offer.

Expect demand to come from staff with young families and/or caring responsibilities, and from older staff who may also have caring roles as well as personal health issues.

Demand will also depend on how employee-centric the organization is already.

Fortunately, technology support is also available to help with:

• Communication: Social media, and your corporate intranet, facilitate communication and collaboration. Familiar video conferencing systems and project management software link team members working in different locations.
• Hybrid working: Many jobs can be performed at any location with a wi-fi connection. Some employees prefer this in terms of work-life balance, productivity, job satisfaction, and reduced commuting time and cost.
• Engagement: Intranets, messaging, and email can be used to conduct staff surveys, and collect feedback.
• Development: Online learning can open up access to training courses and resources (skills and knowledge), independent of employee location. This can be an effective, low-cost way to promote continuous learning.
• Performance management: With data analytics, management can set goals, monitor progress, offer feedback, and carry out regular performance reviews.
• Welfare: Corporate intranets and social media can be a source of advice on mental health, stress management, and work-life balance.

Refocusing HR on individuals

Here are eight steps to refocusing HR policy and practice on individual employee needs and expectations of work:

• Determine business need: Is the engagement, motivation, and retention of your employees of strategic importance to the success of your business?
• Assess demand: Are you getting lots of requests - informal and formal - for tailored, personalized working arrangements? (Be aware of hidden demand.)
• Communicate: Design and communicate the revised policy, emphasizing that this applies to everyone.
• Loosen up and trust: Where possible, let employees take control of their own work environment and task design.
• Mean it: Don’t claim to have a DEI policy unless you are going to live and breathe it.
• Think purpose: Make sure that your employees see a sense of purpose in their work.
• Reskill, upskill: The pace of change, particularly in new technology, requires regular reskilling.
• Monitor: Regularly track changes in performance, problem-solving, the generation of new ideas, absenteeism, and staff turnover.

In conclusion

Keep a close eye on the social and economic trends that affect your organization.

Assess the implications for employee needs and expectations of work.

Update your HR policies and practices accordingly. Personalization may be the start of a revolution at work - and for HR.

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