When the ADP Research Institute recently investigated a relationship between HR staffing and employee turnover, we found what looked like an optimal ratio of HR personnel to employees, one that might lead to greater retention.
That raised a new question. HR divisions can be sprawling enterprises with broad responsibilities that affect employee’s day-to-day lives. Which aspects of HR specifically have the greatest impact on employee retention?
To answer that, we began with data from our HR XPerience Score, or HRXPS, which tracks employee sentiment about HR departments. The HRXPS survey was conducted every four months between June 2022 and June 2023 utilizing a stratified random sample of U.S. respondents, half of them individual contributors and half of them managers. We examined responses from 20,000 employees.
(See our full HRXPS research report for survey items and methodology.)
The Human Resources XPerience Score comprises five constructs related to employee feelings about the value of HR:
- Needs (You give me what I need)
- Safety (You make me feel safe)
- Value (You understand and value me)
- Growth (You want me to grow)
- Trust (I trust you)
Based on responses to questions in these constructs, we use a proprietary algorithm to place workers into the following categories:
- Value Promoting: People who feel that HR is a net positive that adds significant value to their experience as an employee.
- Performing: Employees who consider HR to be performing responsibilities effectively or as a neutral value proposition.
- Value Detracting: Employees who view the function of HR as a net negative when it comes to their experience at work.
Our analysis focused on the value promoting and value detracting categories.
We also asked respondents about their current desire to work for a different company. The goal was to understand the relationship between an employee’s experience with HR and employee retention.
We found that respondents who say they have no intent to leave their current company are 3.8 times more likely to see HR as a net benefit, or value promoting.
If a person’s perceptions of HR value are related to that person’s intent to stay at a company, what can an HR department do to affect those perceptions? We found two areas where even small changes might reap great benefits—onboarding, and the HR contact process.
It starts from day one. An employee’s first on-the-job experience comes during onboarding, which gives the HR team a critical window for selling itself as a net benefit to that new worker. The more formal the onboarding process, the better: Respondents who described their onboarding as “extremely formal” were 5.3 times more likely to view HR as a net positive.
The onboarding experience seems to have a lingering effect on employee perceptions of HR over the long term. Even years later, the formality of onboarding makes a difference.
Stark differences emerge when we look at onboarding formality and organization size. Smaller organizations—those with 1 to 49 employees—have considerably less-formal onboarding. In fact, about a third of employees at these small organizations report no formal onboarding process at all. Even incremental changes to the formality of the onboarding process could go a long way toward helping smaller organizations retain workers.
A dedicated HR contact
We found that respondents who have a dedicated HR contact, one person to whom they can reach out to for all their needs, were 2.8 times more likely to view HR as value promoting.
It’s important to note that nearly half of employees in smaller organizations reported having no HR person or department at all.
Having a single HR contact might not be practical or feasible for every organization, especially small ones, but even adjusting the HR contact process can make a difference in how employees perceive HR value.
The greatest share of value promoters, for example, are found at organizations that have a dedicated HR app available for employee use.
Yet the percentage of employees who report the availability of an HR app is small across organizations of all sizes. In fact, larger organizations fare a bit worse than smaller ones in this regard. Investing in app-based technology to help employees get the help they need might be a beneficial step for any HR department to take.
Of course, apps aren’t the end-all solution, nor are they the only approach to improving employee perceptions of HR value, but they are a great starting point for organizations that want to improve their current practices.
Organizations that combine the right staffing ratios with tangible efforts to promote the perception of HR value could help employees flourish in their roles – and stick around for the long haul.