It’s no secret that CFOs and human resources leaders don’t always have the same motivations. But finance chiefs, especially those who oversee human resources (HR), might be interested to know there are also significant disconnects between HR leaders and employees.
The misalignment is a theme in a new survey report from Lee Hecht Harrison (LHH), a large provider of talent acquisition and job recruitment services. The research polled 2,524 HR leaders from organizations with 500+ employees, as well as 7,028 white-collar workers, in five countries: Australia, Canada, France, the United Kingdom, and the United States.
Much of the survey was dedicated to issues around layoffs. A key finding was that many workforces are shrinking. More than three-fourths (77%) of participating HR leaders said their organizations are currently undertaking or considering layoffs.
Additionally, 56% of the surveyed workers said their team, unit, or division had been downsized via layoffs in the last 12 months, the report points out.
In fact, according to John Morgan, president of LHH’s career mobility and learning and development businesses, the current wave of layoffs and downsizing is unique over at least the past two decades.
“The major difference is not in the overall number of companies considering a downsizing,” he said, “but rather that many more companies in this cycle are doing it for the first time ever.”
The top five drivers of layoffs, all about equal in prevalence, were identified as over-hiring in recent years, cost-cutting imperatives, restructuring or reorganization, poor business performance, and merger/acquisition causing duplication.
HR and Worker Perception Gaps
In some respects, the report notes, concerns of HR leaders with respect to layoffs matched those of white-collar workers. For example, among both groups, about a third cited both the risk of disengagement by current employees (35%) and resignations by people the organization wants to keep (34%) as concerns.
This points to a need to focus on retaining people, the report says — but on this, the views of employees and employers diverged significantly in a key aspect.
That is, a “troublingly high” proportion (72%) of workers said their team has been “burned out” in the last 12 months due to uncertainty and increased workloads.
Yet, at the same time, a mere 6% of HR leaders cited the risk of employee burnout as a concern. LHH called that a “misstep,” given that almost one-fifth (18%) of workers reported that burnout has caused them to become less engaged at work. The same proportion of employees said they have considered leaving their employer as a result.
In fact, the report says, “most, if not all, of HR leaders’ top concerns [about layoffs] are likely to be exacerbated by employee burnout.” These concerns, in addition to the ones mentioned above regarding business objectives and talent recruitment, included the inability to achieve business objectives; lawsuits by disgruntled ex-employees; and disengagement by remaining employees.
Another notable disconnect between HR leaders and white-collar employees is related to retention strategies. While 81% of HR leaders said they believe existing strategies are effective, 57% of workers said they are considering leaving their jobs.
Most people, according to LHH, want to be in control of their own professional lives and destinies, with the ability to work flexibly and develop their skills and careers.
“We would expect, then, that organizations’ retention efforts would be focused on these factors, but that does not appear to be the case,” the report says.
When LHH asked HR leaders about their retention strategies, the three least common answers were leadership development (12%), reward and recognition (11%), and more flexible work options (6%). “Each of these directly addresses the most common reasons given by workers for wanting to leave,” the report says.
Another disconnect between HR leaders and white-collar workers suggests that organizations may offer a level of support for laid-off employees that the employees aren’t actually aware of.
For example, 59% of HR leaders said their organization offers an “opportunity to find a new role in the organization.” However, only 16% of employees reported that such opportunity exists where they work.
The same pattern applied to mental health support, mentoring, career coaching, and letters of recommendation. While HR leaders champion such programs, they don’t register heavily in employees’ minds.
What Is Technology’s Role?
While there has been much societal talk about technology acting as a scourge against full employment, the survey did not ask participants specifically about the role of technology in employee layoffs.
“Increased digitization is creating uncertainty in the workforce,” said Morgan. “But while tech advancement is certainly encouraging organizations to reassess business goals, it’s too early to point to it as the primary driver [of layoffs].”
In a separate recent survey, LHH did find that young workers largely didn’t fear being displaced by advancing technology. Those in the 45-54 age group were the most worried, and those who shared that concern reported that they were working an average of 40% harder than normal.
"Now is a valuable time for organizations to upskill and reskill workers to meet their business needs while assuaging their concerns around their future careers,” said Morgan.
This article has been updated with comments from John Morgan, president of LHH’s career mobility and learning and development businesses.
David McCann is a New York-based freelance writer and a former senior editor at CFO magazine and CFO.com.