As competition for talent remains fierce, a recent study finds that a strong HR function is a critical driver of a company’s talent brand and vital to winning and retaining the best workers.
In a first-of-its-kind study by the ADP Research Institute (ADPRI), the organization constructed a metric—the HR XPerience Score (HRXPS)—that measures the employee view of HR service quality and value, and identifies key factors that directly correlate to a strong talent brand.
According to the findings, generating a strong HRXPS is influenced by an employee’s relationship with HR and frequency of interaction. Employees who have a single point of contact with HR are twice as likely to say HR is “value-promoting” than those with multiple HR contacts, and five times more likely than employees who have no HR.
Additionally, the number of interactions matter as employees are nearly 7½ times more likely to say HR is value-promoting when they experience at least seven interactions with HR compared to no interactions. In fact, the study found the more services that are used by an employee, the higher the HRXPS. And those who use five services from HR are 11 times more likely to say HR is value-promoting than those who do not use any services.
“Our research found that the HR function is critical to the talent brand—so much that every employee interaction that takes place, specific services used and a personalized feel with a single point of contact are what influences a higher HRXPS. In fact, this high-ranking, single point of contact upends the current industry trend of doing away with HR,” notes Marcus Buckingham, head of people and performance research at the ADP Research Institute.
What Influences HRXPS
To better understand what influences a company’s talent brand—the likelihood an employee would recommend their company to a family member or friend as a place to work—the 25-country study of more than 32,000 respondents set out to pinpoint the factors that influence the talent brand and generate a high HRXPS. It also identified what exactly will influence an employee’s intent to leave, and influence people to actually leave.
As part of the HRXPS construct, ADPRI found that there are five experiences that comprise employees’ perception of HR, with corresponding items categorized under each experience:
- You give me what I need
- You make me feel safe
- You understand and value me
- You want me to grow
- I trust you
The metric then categorizes the HR function of a company as value-promoting, value-performing and value-detracting.
A Positive Perspective of HR
When an employee thinks HR is value-promoting, they are eight times more likely to be a talent brand promoter. In addition, employees who are value-promoting are nearly four times more likely to have no intent to leave compared to value-detracting.
For employees who are value-detracting according to the HRXPS, they are nearly 3½ times more likely to be actively searching for a new job compared to value-promoting. Moreover, employees who voluntarily leave are 1.6 times more likely to see HR as value-detracting three months prior to leaving the company.
The research also identifies strategies that HR can leverage to improve services. For example, employees that experience a formal onboarding process, get frequent performance attention and receive health benefits and use them are more likely to view HR as adding value than those that do not receive these services.
For instance, employees who experience a formal onboarding process are 8½ times more likely to say HR is value-promoting compared to those who had no formal onboarding. In addition, employees who receive the most frequent attention on their performance are 4.4 times more likely to say HR is value-promoting than those who receive no performance attention.
Other Characteristics
The study further analyzed additional factors and characteristics that do not relate to HR service quality. Here, the study found that employment status, whether full time or part time, does not increase the likelihood of any one of the HRXPS categories. The average HRXPS is relatively equal between full time and part-time workers.
What’s more, being a certain gender or age does not increase one’s likelihood to view HR as value-promoting or value-detracting, nor does an employee’s level of education. High school graduates are just as likely to rate HR as value-promoting as college graduates.
While an employee’s tenure with an organization has been found to be a driver for many outcomes, such as engagement, the study notes that length of employment does not increase the likelihood of being in any one of the HRXPS categories. Company size has also been found to not impact the HRXPS.
“As companies continue to ramp up hiring, HR has an opportunity to refocus efforts on the onboarding process as this is a critical touchpoint, as uncovered in the study,” says Sreeni Kutam, ADP’s chief human resources officer. “A company's talent is vital and this study shows where and how HR can make a direct impact on the talent brand of an organization.”
