In July, Reflektive held two half-day Illuminate conferences in Austin, Texas and Chicago, Illinois. The conference was a smaller-scale production of Reflektive’s inaugural customer conference, focusing on ways to improve the manager-employee relationship through things like building a culture of feedback, utilizing performance management technology, and incorporating data analytics. Rachel Ernst, vice president of employee success at Reflektive, opened both of the conferences with a keynote on employee empowerment, and how this reality will drive performance management in 2019 and beyond.
The Age of the Empowered Employee
Ernst noted that many of today’s employees expect (and often demand) increased compensation and/or promotions on a more frequent cadence than we’ve seen before. This is a sharp contrast to the recent past when employees would wait at least a year before pushing for advancement. If employees don’t see tangible advancement after six months, they’re inclined to look for other work, which they do with alarming regularity: 24% of employees report they are likely to change jobs in the next year.
When and how did this revolution happen? The current low unemployment rates set the stage; employees know if they don’t get what they want from one job, they can easily move on to another.
Today’s employees live in an ever-connected world. They can open up LinkedIn or Glassdoor and find new opportunities in a matter of minutes. If they possess high-demand skills, they’re likely receiving regular emails from recruiters — which they read and compare to their current position.
Employees, therefore, hold a high degree of power. This is especially true of Gen Z and millennial employees, who grew up with instant access to information. At present, 40% of the workplace is made up of these two generations. In six years, they will make up 60% of the workforce, presenting new challenges to people management.
The Cost of Employee Empowerment
Ernst called out the statistic that it costs, on average, $100,000 to hire and onboard new talent when someone quits. If almost a quarter of your employees are planning to leave within the next year (which corresponds with Reflektive’s research), your attrition rate is costing hundreds of thousands to millions of dollars per year. Even the loss of five employees can cost half a million dollars.
Financial costs aren’t your only attrition losses. When employees leave, they take all the training and information they gained on the job with them. If you aren’t able to engage them at work, you’re essentially giving employees the skills they need to find a better job.
Performance Management and Employee Engagement
Engaged employees are more likely to remain with their company, so how do you engage an empowered workforce? Sixty-eight percent of employees agree they’re more engaged when the following criteria are met:
- Discretionary effort: Does the company motivate the employee to be more productive? Is the employee given the feedback, tools, skills, and autonomy to perform his or her job? Does the employee feel valued by the organization? Does the employee value the company’s goals and services?
- Recommendations: The employee who is willing to recommend the company to others as a good place to work is more likely to remain with the company, as is the employee who sincerely recommends the company’s products or services. This can have a significant impact on your ability to attract new talent; prospective employees don’t check out your website first when they’re considering applying for a position…they check the reviews on Glassdoor.
- Retention: Today’s employees crave regular, meaningful feedback. Regular 1:1 meetings improve retention rates by a factor of three. Seventy-one percent of employees want monthly meetings with managers, while millennials and Gen Z employees prefer to meet even more frequently.
SEE ALSO: The Ultimate Guide to One-on-Ones
If employees feel empowered, Ernst recommends using that power to improve your performance management processes. As meeting with every employee every week would consume all of a manager’s time, she recommends providing employees with the tools they need to initiate their own review cycles, where they ask for and receive feedback in real time. Companies that provide employees with the tools to grow and develop their own careers see 3x the engagement rates as those who stick to annual reviews.
Want more information on performance management trends? Check out How to Take Advantage of the Latest People Management Trends and Research. And in Fact-checking the Latest Performance Management Trends, Alan L. Colquitt explains how to decide if current trends are a good fit for your HR team and company.