You love your employees.
OK, well maybe not like that, but we bet you’re pretty happy that you have them on your team. After all, your workforce is the backbone of your organization. They’re the ones that fulfill the goods and/or services you provide and act as ambassadors to your customers and client base. Without employees, your business would probably be dead in the water. Or, as McKinsey & Company so eloquently puts it, “The most important resource in any economy or organization is its human capital — that is, the collective knowledge, attributes, skills, experience, and health of the workforce.”
You depend on your employees, and that means you value them. But how do your employees feel about you? Or to be more specific, how do they feel about their managers, bosses, and company leadership in general? As you may (or may not) be surprised to learn, that sense of value isn’t always reciprocated. In fact, 75% of employees identify the most stressful part of their jobs as their immediate boss, and SHRM reports that 84% of American workers blame bad managers for creating unnecessary job-place stress.
But don’t worry; it’s not just about management. The reality is that every professional interaction has an impact on your culture and your bottom line. This is where employee relations comes in.
Employee relations make a huge difference to how engaged and satisfied your employees are, which can make or break your company. Of course, to get a better feel for why employee relations is so important and how you can optimize your approach to improving it, we should probably lay down some definitions.
What Is Employee Relations?
Employee relations (ER) — also sometimes called employee relationship management (ERM), associate relations, or labor relations — describes the interpersonal relationships on which your company is built. This focuses primarily on the individual and collective relationships between employers and employees, with a clear emphasis on managers and team members. Employee relations can also be expanded to include interactions between coworkers as well as any sentiments related to company culture and direction.
As an initiative, employee relations also describes the tools, strategies, and responsibilities associated with managing relationships within a company and promoting effective, positive collaboration in the workplace. Done correctly, the right employee relations program formalizes these efforts with clearly defined goals, processes, and metrics.
The abridged version?: employee relations is all about maintaining and improving the wellbeing of your workforce.
Of course, that’s a pretty big mandate. So who’s in charge of making it happen?
Employee Relations in HR
In a broad sense, employee relations is the responsibility of every employee in the organization. In a less broad sense, it’s the job of company leadership to take command and ensure that employee relations is a priority. And in the most real sense, this usually means that the HR team ends up being the obvious ‘boots on the ground’ drivers of employee relations success.
HR departments may act as the more approachable go-between, facilitating better communication and feedback from employees to managers and managers to employees. HR’s responsibilities will likely also include spearheading the creation of benefits and policies designed to promote a positive, healthy, and comfortable work environment.
Why Is Employee Relations Important?
Earlier, we simplified the entirety of employee relations into a single objective — improving workplace wellbeing. In other words, it’s about caring for your employees and ensuring that their time with you is beneficial for everyone.
Why is that important? Well aside from the fact that your employees are living, breathing human beings and you should naturally take some interest in helping them stave off the encroaching dread of existence (assuming you’re not an absolute monster), companies that make employee relations a priority see some pretty tangible benefits. Behold:
Improves Employee Engagement
According to Gallup, only about a third (34%) of employees in the US are engaged, meaning that there are approximately two disengaged employees for every worker who approaches their job with dedication and enthusiasm. That’s… not great news for businesses. Non-engaged employees are a drain on revenue, and in global terms it’s estimated that they account for $7.8 billion in lost productivity every year. Employee relations makes engagement a major focus. By creating a formalized set of processes for measuring and improving interactions and satisfaction with a company, leadership can help bridge the engagement gap in their workforce.
Enhances Organizational Performance
Maybe this goes hand in hand with the previous point, but it’s worth recognizing the major difference effective employee relations can make on organizational performance. That’s because better employee relations naturally leads to better communication, collaboration, and guidance. And given that 75% of senior HR managers agree that collaboration, constant communication, and a culture of mentorship will become the mandate of high-performing workplaces of the future, well, you can probably see where we’re going with this.
Increases Retention and Attracts Talent
Are you worried about retaining your best people? You’re not alone; Gartner reports that 91% of HR leaders are concerned about employee turnover. Industry experts conservatively estimate that replacing the average lost employee costs about 25% of that employee’s yearly salary. What keeps employees from leaving? There are a lot of factors at play, but social support, a positive work environment, a clear path for career growth, and good relationships with leadership and management are all key factors. And wouldn’t you know it? All of those fall under the banner of employee relations.
Optimizes Employee Wellness
Wellness? Is that something HR and company leadership should be concentrating on? Heck yeah it is! It’s hard to put in a good day’s work if you feel terrible. Unfortunately, MIT reports that 85% of workers say that work-related stress is affecting their home lives, and 76% believe that their companies should be doing more to protect their mental health. The right wellness programs (championed by your employee relations team) can keep your people healthy and stress-free, which is probably why 41% of employers now provide employee wellness resources.
Examples of Employee Relations
OK, so there is a lot of evidence supporting the thesis that employee relations is worth looking into. But what exactly does that involve? What kinds of tasks and considerations should be on your mind as you begin developing an employee relations strategy?
Here are some employee relations examples to help you get started:
Performing Conflict Resolution
Humans are social animals, but we’re also capable of butting heads when priorities, personalities, or opinions don’t line up. And whether your business’ particular brand of conflict involves disgruntled employees, opposing leadership styles, or arguments about whether it’s OK to heat up tuna fish in the office break room (it’s not), employee relations will need to have processes in place to resolve these situations amicably.
Enhancing Workplace Safety
The National Safety Council (NSC) reports that the total cost of work injuries in 2020 was $163.9 billion. Holy cow; that’s such a big number that they may as well have just said “all the money.” Preventing workplace accidents and putting together comprehensive safety procedures and providing safety training is a big part of employee relations, so you can run your business without having to worry about a bunch of busted femurs ruining everyone’s day.
Hiring and Onboarding
Want to ensure that your new hires get up to speed quickly and contribute to the success of your business? Employee relations is essential to the onboarding process. Employee onboarding includes things like preparing equipment, establishing training schedules, introducing new employees to key figures and teammates, etc. But it also extends back into the hiring process itself, where employee relations teams take an active role in ensuring that candidates are a cultural fit, bringing unique qualities to the company in addition to standard skills and competencies.
Addressing Upward Mobility Issues
The best employees aren’t content to plant; they want a clear career path that will allow them to advance within the company. HR and other employee relations teams must work with company leadership to ensure that there are opportunities available for employees and incentives for them to improve their value. If there aren’t, then your top employees will start looking elsewhere for opportunities.
Promoting Employee Engagement
Are we repeating ourselves? Maybe, but employee engagement really is just so important, and every employee relations program needs to make it their primary concern. Thankfully, there are a lot of things that relations teams can do to promote engagement — development opportunities, activities, benefits, rewards, or just about anything else that puts the employees at the center and celebrates or improves them.
Building an Employee Relations Program
The above examples are really only that: examples. And that list is anything but comprehensive. Employee wellbeing extends into nearly every aspect of your workplace culture and employee experience. With so much to take into account, where should you possibly begin creating an effective employee relations program?
A good place to start is by identifying your goals.
Ideal Outcomes of Employee Relations
Do you have specific objectives you want to meet as you establish your employee relations strategy? If so, clearly defining and quantifying those objectives will help you create a roadmap detailing how your company is going to get there.
Naturally, every organization is different; your goals aren’t going to match the goals set by companies in other industries (and probably won’t even fully line up with the goals of your direct competitors). Still, most businesses want more or less the same thing from improved employee relations:
- Increased employee job satisfaction: Satisfied employees are less likely to look for other opportunities and much, much less likely to engage in absenteeism. From improving day-to-day work and making sure that everything is getting done, to building a dedicated company-wide team of employee evangelists, increased job satisfaction is one of the most important goals you can have.
- Enhanced worker performance: Do we really need a statistic about how improved performance is good for business?
- Strong employee/management trust: This is a pretty big one, and sometimes it gets overlooked. Employees need to trust that their managers will give them the full direction and support, and that they are capable of making the right decisions to further the goals of the business. On the other side of the coin, managers must also trust their employees and demonstrate that trust through honest and open interactions. Unfortunately, although 80% of managers believe that they’re transparent with their teams, only 55% of employees agree.
Key Performance Indicators
With your goals firmly in mind, it’s time to figure out how you’re going to chart your progress. Key performance indicators (KPIs) are categories of metrics you can use to see what’s working, what isn’t, and whether your team is moving in the right direction.
KPIs are going to depend heavily on your business and your goals, but here are some common ones that employee relations professionals tend to keep a close eye on:
- Employee Retention Rates: If turnover is high or you’re having trouble keeping your best people, that suggests possible employee relations issues.
- Number of Complaints/Incidents: A high number of HR complaints or other employee relations incidents is obviously symptomatic of potential problems with the program. On the other hand, if you see that these issues are decreasing, then your program may be showing signs of success.
- Employee Satisfaction Survey Scores: Sometimes, employees who seem perfectly happy are really just hiding issues and concerns behind a smile. You can get a more accurate picture of employee satisfaction through anonymous employee surveys.
- Overall company growth and performance: Again, the success of your employee relations program will have an impact on the success of your company; make sure to include performance metrics in your evaluation.
Elements to Include
Finally, you need to determine what form your employee relations program is going to take. What will it include? What areas will it touch on? Employee relations is an expansive subject, but your program will likely need to be — at least at first — slightly more limited in scope. When creating your program, consider building it around the following elements:
- Onboarding resources: Detail everything that new employees will need to hit the ground running (resources as well as training), along with the processes involved in securing these resources.
- Training resources beyond onboarding: Hopefully, your employees don’t stop learning once they get settled in; your employee relations program needs to outline further training and educational opportunities that are available to help your workers improve their skill sets.
- Policies and procedures for misconduct: No one likes to think about having to take disciplinary measures against their employees, but things happen. When misconduct rears its head, you’ll need clearly and legally established policies and procedures in place.
- Written employee relations policies: Any other policies relating to employee relations will also need to be clearly detailed.
Employee Relations Best Practices
There’s a lot that goes into creating an effective employee relations program beyond just including the right documentation and knowing what to measure. The good news is that others have gone before you, and the insights they’ve developed can help you improve your chances of employee relations success. Here, we share our favorite tips and best practices, so you can offer the best possible support for your employees and your business:
Communication, Communication, Communication (and Communication)
Employees are only as effective as the information they’re given access to. As you work towards improved employee relations, communicate clearly and often with your people about organizational issues, policy changes, concerns, and everything else that might affect them or your business. Nothing relevant should be taboo. If you can build a relationship of open and honest communication, your team relationships will naturally become stronger. In fact, we’re going to say it one more time just so it sticks: Communication.
Get Buy In
Positive interaction is more than just informing your people about what’s what. It’s a two-way street — one that demands understanding and approval from the people who are involved. Get your workforce onboard with the mission and vision of your company, and frequently solicit their feedback via one-on-one meetings and regular work environment surveys. This will help your employees feel like authors of success, instead of just cogs in the machine.
Often, one of the most difficult — yet most important — aspects of leadership is the ability to step back. Give your people all the support and resources they need, and always be available to them, but don’t micromanage. Show them that you trust them to do their jobs well and to seek direction when they need it. Otherwise, they’ll come to rely on you for every answer, and that creates a poor environment for improved employee relations.
Buy In to Your Employees
You value your employees, sure, but do you show it? Demonstrate how much you care about their personal success beyond just what they contribute to the bottom line, by investing in their personal growth and happiness. Wellness programs, mentoring opportunities, educational resources, etc., are all effective and appreciated ways to invest in the people who drive your business.
Success, in all its forms, is the goal. So when success becomes a reality, that’s cause for celebration! Make public recognition a standard. Share and call out exceptional achievements. Give out awards. Even something as small as a sincere ‘good job’ can make a big difference to an employee. And if you want to go bigger, then you probably won’t get too much argument from the people you’re celebrating.
Build an Inclusive Environment
Our last tip is a simple one: Be inclusive. Every member of your team is valuable and important, and none of them should feel as though they’re being left out. Give everyone the same opportunities to participate, excel, and have their voices heard. Build inclusiveness into your work environment at every stage. If you can do that, then employee satisfaction becomes way more attainable.
Employee Relations Is an Ongoing Process
Your relationship with your employees — and their relationships with each other, your business, and your processes — is a dynamic entity. It grows. It changes. And it demands constant nurturing to remain healthy. The right approach to employee relations will help you prioritize these relationships to better support your people. And in turn, your people will support your business. But it has to be an ongoing process.
Ready to make it happen? Talk to a Gympass wellbeing specialist today! Our company wellness programs are the perfect opportunity to show your devotion to your workforce and your commitment to their health and happiness. And if that isn’t love, well, we don’t know what it is.
- Allas, T., & Schaninger, B. (2020, September 22). The boss factor: Making the world a better place through workplace relationships. McKinsey. Retrieved August 3, 2023, from https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/the-boss-factor-making-the-world-a-better-place-through-workplace-relationships
- Designing and Managing Wellness Programs. SHRM. Retrieved August 3, 2023, from https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/designingandmanagingwellnessprograms.aspx
- 5 Trends Shaping The Future Of Performance Management; A PeopleStrong Survey Report. (2020, October 29). PR Newswire. Retrieved August 3, 2023, from https://www.prnewswire.com/in/news-releases/5-trends-shaping-the-future-of-performance-management-a-peoplestrong-survey-report-859882138.html
- Gartner Survey Reveals 91% of HR Leaders Are Concerned About Employee Turnover in the Immediate Future. (2021, September 30). Gartner. Retrieved August 3, 2023, from https://www.gartner.com/en/newsroom/press-releases/09-30-21-gartner-survey-reveals-ninety-one-percent-of-hr-leaders-are-concerned-about-employee-turnover-in-the-immediate-future
- Gorde, S. (2020, June). A Study of Employee Retention. ResearchGate. Retrieved August 3, 2023, from https://www.researchgate.net/publication/339253142_A_Study_of_Employee_Retention
- Harter, J. (2022, August 13). Employee Engagement vs. Employee Satisfaction and Organizational Culture. Gallup. Retrieved August 3, 2023, from https://www.gallup.com/workplace/236366/right-culture-not-employee-satisfaction.aspx
- Kossivi, B., Xu, M., & Kalgora, B. (2016, January). Study on Determining Factors of Employee Retention. ResearchGate. Retrieved August 3, 2023, from https://www.researchgate.net/publication/303669148_Study_on_Determining_Factors_of_Employee_Retention
- Laker, B., & Roulet, T. (2021, April 26). How Organizations Can Promote Employee Wellness, Now and Post-Pandemic. MIT Sloan Management Review. Retrieved August 3, 2023, from https://sloanreview.mit.edu/article/how-organizations-can-promote-employee-wellness-now-and-post-pandemic/
- Madgavkar, A., Schaninger, B., Smit, S., Woetzel, J., Samandari, H., Carlin, D., Seong, J., & Chockalingam, K. (2022, June 2). Human capital at work: The value of experience. McKinsey. Retrieved August 3, 2023, from https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/human-capital-at-work-the-value-of-experience
- Pendell, R. (2022, June 14). The World's $7.8 Trillion Workplace Problem. Gallup. Retrieved August 3, 2023, from https://www.gallup.com/workplace/393497/world-trillion-workplace-problem.aspx
- Rogers, A. (2018, February 8). Employees Don't Trust Their Managers, And It's Hurting Your Bottom Line. Forbes. Retrieved August 3, 2023, from https://www.forbes.com/sites/forbestechcouncil/2018/02/08/employees-dont-trust-their-managers-and-its-hurting-your-bottom-line/?sh=1bd769081f33
- Survey: 84 Percent of U.S. Workers Blame Bad Managers for Creating Unnecessary Stress. (2020, August 12). SHRM. Retrieved August 3, 2023, from https://www.shrm.org/about-shrm/press-room/press-releases/pages/survey-84-percent-of-us-workers-blame-bad-managers-for-creating-unnecessary-stress-.aspx
- Work Injury Costs. (2023, April 12). Injury Facts. Retrieved August 3, 2023, from https://injuryfacts.nsc.org/work/costs/work-injury-costs/
The Gympass Editorial Team empowers HR leaders to support worker wellbeing. Our original research, trend analyses, and helpful how-tos provide the tools they need to improve workforce wellness in today's fast-shifting professional landscape.