Dive Brief:
- More than 9 in 10 (94%) HR leaders say their team is now thought of as a key business driver, a significant increase from 70% in 2022, according to a March 18 report by HR technology firm isolved.
- However, the evolution of HR into a more strategic function is not without challenges: 69% of the more than 2,000 HR leaders surveyed expect hiring concerns to persist; 62% say their industry is dealing with a talent crisis; and 48% face a skills gap, the survey found.
- Additionally, 65% of HR leaders believe the balance of power is returning to employers, a shift they predict will lead organizations to focus on cost-savings and potentially reduce their ability to invest in employee experience and engagement, isolved said.
Dive Insight:
The past five years have seen HR professionals navigate power shifts in the employer-employee relationship, requiring HR to maintain a balance between these relationships amid significant disruptions in this dynamic, the isolved report noted.
As the balance of power returns to employers, “HR leaders understand that providing positive employee experience remains a critical driver of retention and productivity,” Amy Mosher, isolved’s chief people officer, stated in a media release.
In fact, one-third of HR leaders said improving EX and engagement is the biggest opportunity for HR this year, according to the survey.
Yet, while HR leaders acknowledge the need to focus on EX, they may not be fully in touch with what employees are experiencing: 79% of employees report having felt burned out at work, but 61% of HR decision-makers said their workforce isn’t suffering from burnout, isolved research found.
The findings align with a September 2024 report from SurveyMonkey highlighting the disconnect between what HR teams prioritize and what employees believe is important for engagement.
Notably, the disconnect was most significant among companies that lacked strong feedback, advocacy and understanding of employee needs, SurveyMonkey found.
Beyond their impact on the internal aspects of the workplace, EX and employee engagement also have a ripple effect on external aspects like reputation and recruitment, isolved said, and that remains very much a concern.
For instance, although a cooled labor market may make good talent easier to find and keep on board, a still-aging labor pool increasingly ready to retire, combined with reductions in immigration, may signal speed bumps ahead, experts recently told HR Dive.
When companies drop investment in EX and go back to cutting costs and treating people merely as resources, organizations may see engagement go down and attrition follow, an analyst for research and advisory firm Forrester previously cautioned.
