It’s no secret, COVID massively accelerated the future of work timeline. It’s hurled us out of an outdated industrial-age model and into a distributed one that’s optimized for the internet era. HR tech no longer sits on the back burner, it is now front and center in the minds of employees, executives and boards. This flash-flood transition has very quickly accelerated what we used to call the “future of work” into the “now of work.”
This transition has only been exacerbated with the multitude of talent issues executives are facing. The Great Resignation—and the shrinking talent pool it’s leaving in its wake–is forcing today’s leaders into the most competitive war for talent we have ever seen. The battle to attract and retain top talent has never been more fierce or costly. Consider this—in November, the number of people quitting their jobs rose to a record high of 4.5 million. The pandemic has perhaps triggered a shift in priorities, leading many to take a leap of faith to pursue a different career path and some to call it quits on employers who failed to step up during one of the most difficult times in recent history.
With these fundamental changes to the workforce, today’s leaders urgently need to rethink the way they manage and measure the performance, productivity and wellbeing of their workforce. The good news is, there’s a renaissance in HR technology that’s helping executives navigate this unprecedented time. My company, Sapphire, is backing a number of these innovative tools. The adoption of new tech, a shift in mindset, and a change in management strategies have combined to help the C-Suite remedy three key areas that urgently need attention: the human capital equation, employee sentiment and workplace wellness.
Rethink HR as Not Just a Cost Center
Above all else, we need to rethink the way we look at human capital. Traditionally, we’ve considered HR a cost center, not a revenue generator, despite employees being the most valuable resource to almost any business. But there is much more to your workforce than just costs—hiring, training and replacing employees. Now, we’re seeing the other side of the human capital equation and it’s one that actually benefits businesses and leads to top line results.
We should start to view HR as a revenue calculation. That is, if you can upskill employees or drive them to be more engaged and effective, it will ultimately bring in more revenue. A University of Oxford study shows that happy workers are 13% more productive, which means investing in keeping workers happy isn’t just the right thing to do, it makes business sense.
But how can a company effectively measure its return on HR investments? It’s historically been a huge challenge to do so. Fortunately, emerging technologies such as ActivTrak (a Sapphire investment), Visier, and The Org, are changing the game and making measurement of people both possible and essential. Workforce analytics tools are helping companies piece the ROI equation together in a number of ways, such as detecting work patterns, measuring behaviors and benchmarking employees across peers and industries. With better measurement and increased visibility into productivity and output, it’s much easier for executives to convince their board and peers in the C-Suite of the need to invest in keeping people happy and engaged.
Employee Sentiment Should Be a Leadership Priority
With companies like Apple and Salesforce committing to hybrid work, while others like Twitter and Shopify proclaiming employees never need to return to the office, hybrid and distributed ways of working are likely here to stay. To get the most out of every employee in a distributed environment, it’s not enough to only measure employee activity from a distance. Businesses need to start tracking employee sentiment—that is, to understand how their employees feel about their work, management and company. In a workplace that’s starved of in-person meetings and water-cooler conversations, employee experience platforms that power pulse surveys and provide insights into employee sentiment are no longer just nice-to-haves. They have become essential tools that leadership teams deeply care about.
Speaking from experience, today, it’s not uncommon for companies to spend the first hour of a board meeting going through employee survey results. People now associate employee sentiment with real dollars. The realization of the importance of monitoring employee sentiment has led to a rise of analytics platforms that specialize in staff surveys among other capabilities, including companies like CultureAmp (a Sapphire investment) and Workvivo. These platforms give employees an avenue to voice their opinions on leadership, career development opportunities and much more. Businesses that prioritize tapping into the sentiment of their people are more likely to thrive in 2022 and beyond.
Workplace Wellness Is Now Table Stakes
It’s one thing to monitor employee sentiment, but taking actionable steps to improve workplace wellness is another challenge entirely. Depression causes an estimated 200 million lost workdays per year and costs employers between $17 and $44 billion. This improving mental wellness at work table stakes for managing employees in a remote world.
Mental wellbeing needs to be openly addressed in the workplace – and that requires better tools, with preventative care at the core. For leaders, that means finding and implementing technologies that support employees to prioritize their own mental health. These can be platforms that empower people to proactively measure and manage their mental health through clinically backed tools and training to those that help businesses analyze aggregated and anonymized data to better inform their workplace wellness strategies. Fortunately, a rise of mental health tools including those provided by Unmind (a Sapphire investment), Lyra and Calm are making this possible for companies of all sizes.
Furthermore, a big part of wellness at work is about helping employees learn new skills and find mentors and coaches. A Myers-Briggs study shows that people rate undertaking work where they learn something new as one of the most effective work activities that enhances their wellbeing. It’s evident that upskilling via learning experience platforms and personal development via coaching and mentorship are no longer just about improving skill sets; they should be core pillars of a company’s learning and wellness initiatives. Companies like Degreed (a Sapphire investment) and Cornerstone are focused on up-/reskilling of talent while others like BetterUp (a Sapphire investment) and Torch are straddling elements of coaching, learning and mental health. Those that take advantage of technologies that provide skills-based and on-demand coaching programs stand to do well with a new generation of workers that demands greater opportunity and personalization in how they navigate their careers.
As our virtual and physical work worlds collide, we’re seeing the ‘future of work’ develop in real-time. This transition marks a critical inflection point for leaders to rethink their philosophies on people management and the investments they make in emerging HR technologies.
According to Gallup’s Meta-Analysis, companies that prioritize employee engagement see a 23% increase in profitability. It’s no wonder that the organizations that prioritize measurement of human capital, employee sentiment and workplace wellness will be those that stand to thrive in the “now of work.”
Kevin Diestel is a partner at Sapphire, a venture capital company focused primarily on backing innovative consumer businesses and vertical software applications. He is passionate about Future of Work and FinTech startups with clear value propositions and great teams. In his career, Diestel has sat on the boards of over a dozen companies.