Employee engagement lessons for 2023 and beyond

Employee engagement is more important now than it has been in years. As HR Directors look to 2023, they must reflect on the employee engagement lessons of the last two years. And develop proactive strategies to address concerns and create environments where employees can thrive.

Against a backdrop of rapid change, resignation challenges, rising costs and, more recently, quiet quitting, it’s time for action. With the global Covid-19 pandemic as a catalyst, employees are experiencing increased levels of stress, poor mental health and high disengagement. The result is a re-evaluation of work-life balance and changing demands on businesses.

Business leaders have managed huge change over the last two years. Operating models changed overnight. Remote and hybrid working is now standard in many places. And employees are taking active steps to create better balance between work and home. Meanwhile, HR departments are fire-fighting resignations, poor mental health, and steady falls in employee engagement. But as the end of 2022 approaches, it's time to re-group. And work with senior leaders to find ways to sustain your business for the future. So start by reflecting on what the last two years have taught you, and what it means for 2023.

Consider:

• The Great Resignation - factors that caused a mass exit
• The Great Retention - short term reactions with long term effects
• The Great Redundancy - dealing with rising costs and economic uncertainty
• The Great Re-evaluation - understanding what's important to your employees right now
• The Great Relationship - your priorities for employee engagement in 2023

The Great Resignation: where it all started

It's true, the global pandemic was a significant impetus for change across the business world. But you would be naïve to consider it the only factor. What the pandemic did, however, was make employees stand back and reflect on what's truly important. And that led to resignations.

The illness and death of millions globally caused many people to re-think. Their priority is time with family and friends and making memories outside work. In 2021, the US saw an average of 4 million resignations per month (a record high) with similar patterns in the UK, Australia and elsewhere. But it wasn't down to one factor; the pandemic was just the final straw.

When employee engagement is high, businesses can ride some pretty tough storms. Employees pull together to achieve incredible things, in spite of adversity. And some companies benefitted from that collaboration and community. But, on the whole, employee engagement was falling. Employees raised concerns. About health and safety. Lack of flexibility to support family and protect the vulnerable. And unrealistic expectations with increased pressure to deliver in an ever-changing environment. They all took their toll. So employee engagement dropped and resignations increased.

There was huge pressure to respond. Leaders had to show they value their employees and short term fixes appeared. Flexibility through technology and remote working. More empathy and compassion for employee stresses and concerns. Additional support for those experiencing isolation.

The employee engagement lessons were simple - ignore these issues and more people leave. People left in search of new jobs, less stress and different ways to spend their time, so retention strategies became the focus.

The Great Retention: the foundation of employee engagement in 2023

With resignations rising, HR leaders focused on retention. Businesses globally had to review their practices, fast. Governments insisted people work from home, wherever possible, to minimise the spread of the virus. So hybrid working became the new normal. And managers and CEOs had to get onboard.

Many initial responses were short term to stop people leaving. But the promises made in the pandemic have set the scene for the future. And employee reactions give key insights into how to manage disengagement issues going forward.

Flexible working

Location, hours, and personal autonomy. Flexible working comes in a variety of forms. People want to manage personal appointments. Do the school run and enjoy time with their kids before bed. Get to the gym outside peak hours. They want to give their best at work and at home. So the push from employees is for genuine acceptance, not a begrudging yes to a flexible working request. And managers need flexibility too, so they can role model the change and support their teams effectively.

Employee wellbeing support

The global pandemic saw increases in burnout, stress and mental ill-health. And temporary solutions came from helplines and Employee Assistance Programmes. But these don't fix the cause. Employees need help. Managers who recognise they're struggling, adjust expectations and set realistic goals for achievement. And senior leadership who drive a culture of compassion and support.

Personal development

For many employees, this is a tick box exercise. A quick career discussion at the end of an annual review. But what they want is commitment. Opportunities for career progression and personal growth. And to know they're valued by the organisation they're in. So managers must make this a priority and look for ways to support individual development goals.

Recognition

It seems simple, but recognition is a major factor in retention. Employees complain that, despite their commitment, managers don't recognise what they do every day. This won't change overnight and leadership is key. But employees deserve authentic recognition, so make it part of how your business operates.

The pandemic didn't offer any new employee engagement lessons; just reminders that managers must do more. What employees want is relatively simple. But HR Directors must reflect on these factors as they move into 2023. And deliver long term changes that will drive improvements in employee engagement beyond pre-pandemic levels.

The Great Redundancy: current economic challenges

Experts suggest a global recession is imminent, with countries like the UK already struggling. Growth is slowing while costs rise. Events such as the Ukraine war mean sanctions for Russia from UK and USA and rising energy prices as a result. Interest rates are increasing. Mortgages and rents are more expensive. People have real concerns about heating their homes and providing food for their family.

So, employees need more money to pay their bills and they're demanding higher wages. But business costs are increasing too, and many can't afford a larger salary bill. The result will undoubtedly be an increase in lay-offs and redundancies over the coming months.

There was a spike in late 2020. Businesses closed due to Covid-19 restrictions and employees lost their jobs. That situation has calmed, but other factors are now at play. So businesses everywhere are reviewing requirements and considering their future needs. Goldmann Sachs is reintroducing it's annual layoff process. While Wells Fargo, Cazoo and Credit Suisse are just some of the names reporting job losses.

But this is an environment of high disengagement and quiet quitting, so it isn't as simple as businesses just cutting costs. Senior leaders must think broadly about any changes and reflect on recent employee engagement lessons. They need the right people in the right positions and must address skills shortages. But this needs balance these against employee expectations and development needs to drive improved commitment. Get it right, however, and employee engagement can increase profitability by up to 21%.

The Great Re-evaluation - re-building employee engagement from the ground up

Business leaders aren't the only ones weighing up their options. Employees are doing it too. They want development, growth, flexibility and fairness. They no longer want to work hours of unpaid overtime. Instead, they want recognition for their contribution and to know they're valued by their employers.

Employees are assessing what businesses offer them. They want flexibility to visit family or run a side hustle. People want salaries that reflect their contribution. They’re happy switching off notifications at the end of the day. And pursuing other options for personal development. But it’s putting pressure on businesses to think about employee engagement more broadly and stop applying a one-size-fits-all solution.

Sarah Brewster, Managing Director, Fresh Seed, says “employee engagement is an enormous issue. Businesses are struggling to work out how you attract people, retain them, keep them happy. And deal with the grief and anxiety after the pandemic. But businesses need to stop doing things just because someone else does it".

Cookie cutter approaches don’t work for engagement. Businesses must take the opportunity to listen to their teams. And use that insight to build better options tailored to individuals. For some, mental health support and employee wellbeing is essential. For others, flexibility around hours or 4-day working weeks is key. Elsewhere, the missing piece is a supportive manager who sets clear goals and expectations so they understand where they fit. So as employees weigh up what their own priorities are, take the time to ask questions and find out what you need to change.

The Great Relationship - looking to employee engagement in 2023

There’s no doubt, the last few years have been difficult, but business leaders now need to plan for the future. As Pete Colby, Director at Pragmatism (UK) Ltd. points out. “These issues have been around for years, but the root cause is always the same. It's leadership. It's all about knowing your people and about having trust and building relationships. You need regular check-ins, but many managers don't know how to have them".

And Sarah Brewster agrees. “Line manager capability is the biggest crisis in employee engagement”. 

So, as you go into 2023, whatever else you do with employee engagement, you need the right managers and leaders to support it. It means HR teams globally have a double challenge: improve engagement and equip managers to be more effective. Ensure you have people who can connect with their teams and understand the importance and benefit of regular conversations and contact.

For the last two years, the loudest employee engagement lessons have centred around knowing and supporting your employees. People with great relationships, supportive managers and personal flexibility have stayed committed. Going forward, you need to build on that. You need to recognise what’s great. And also find issues quickly so you can address them.

Your start point is to understand manager capability. And then upskill, re-train, or redeploy those who are in the wrong job. At the same time, you need to look at disengagement. The information quiet quitters and their colleagues give you every day.

For some businesses, employee engagement won’t be the priority. But for others, look for the essential insights into quick wins and drive improvements, while you work on manager capability in the background.

Taking responsibility in your organisation

There's no doubt HR departments globally have had a tough job for the last few years. Just keeping up with the continuous changes has been hard enough. But the time for knee-jerk reactions is over. You now have a decision to make. You can either ignore all the information you've gathered since the pandemic began or use it to create a company people want to work for, now and in the future.

The employee engagement lessons of the global pandemic aren't ground-breaking. But they aren't quick fixes either. It's time to build relationships, be realistic about the resources you need, and recognise employee contributions. But that's no simple task and it can be hard to know where to start. So take a look at our guide for engaging employees in tough times and take steps to support your business.

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