Full Guide: What Employee Relations Really Means for HR

If you work in Human Resources, then you have likely been put under fire by your organization’s executives for some of these reasons:

• A high employee turnover rate
• Underperforming team members
• Or a lack of people willing to step up to higher positions.

The main source of these troubling issues in HR is employee relations, and, more importantly, how healthy they are between an organization’s executives and employees. 

And while many of these issues have a lot to do with how a company is run –which probably means it is not entirely your fault–most HR professionals are still held accountable for maintaining positive employee relations.

The truth is an HR professional’s ability to establish and maintain great employee relations is one of the core skills needed to progress in the industry. 

A company can only grow if its people grow with it. And if you can successfully help employees grow, you will have more growth opportunities yourself, as you progress in your path in HR.

And in this article, we will be covering everything you need to know about employee relations: from what is and is not in your control, to how you can accurately measure the relationship between employees and your organization. Further, we’ll also look at how you can use tools to help improve relationships.

What employee relations actually mean & why they matter

Employee relations refer to all efforts that have the end goal of creating and maintaining positive relationships between an organization and its employees.

Keeping people happy and motivated to work is one of the main tasks of the HR team. And, of course, this makes challenges related to maintaining positive employee relations one of the hardest to overcome.

HR professionals routinely need to balance the expectations of the executive team with the demands of their employees. This becomes complicated when there is a mismatch of opinions on either side.

In fact, challenges in employee relations might be more common than most people think. In the United States alone, 46% of American workers reported having left a job because they felt unappreciated, while 65% agreed that they would work harder if they knew their contributions would be appreciated by higher-ups.

This tells us that negativities in employee relations are still very much prevalent in the workforce, and extend far beyond simple “complaining about the boss” discussions during lunchtime.

Below, we will be covering the factors that affect employee relations, so you can explore the reasons negative feelings may arise among employees within an organization.

Factors that affect the quality of employee relations

A recent survey of knowledge workers–architects, engineers, lawyers, academics, programmers, etc.–found that the most bothersome things in their jobs are: stress (35%), feeling underappreciated (28%), and excessive bureaucracy (22%).

In the tech industry, this Forbes article states that 36% of digital workers feel undervalued in their jobs, and that many would be open to jobs with more independence and flexibility, along with higher pay.

Issues like stress and feeling underappreciated directly affect the relationships between workers and their organizations. And most commonly, these issues stem from conflicts regarding these factors:

1. Working hours

This factor involves employees who need to work more hours than expected without compensation or reassurance, such as during crunch periods, or times when the team is understaffed.

This can also refer to top-level management demanding a rigid working schedule with fixed hours, where some employees might work better with more flexible working hours.

Whatever the source may be, any mismatch in working hours between what the organization expects and what the employees are actually subjected to will most likely result in negative employee relations.

2. Conflicts

Conflict is inevitable in the workplace. However, it is how organizations deal with conflict that sets them apart from their competition.

Employee relations can turn sour when there are issues like internal politics within some teams. This includes possible preference or prejudice among team members, purposefully insinuating arguments, providing destructive feedback, and a buildup of unresolved problems, to name a few instances.

HR professionals routinely have to act as the intermediary between employees and the organization, and in this case, between the employees themselves. If there is prevalent bias in the workplace, those on the short end of the stick could feel undervalued, and thus not give their best at work.

3. Alignment on pay raises and benefits

Another prevalent issue in most companies involves how much a company is currently paying an employee, versus how much the employee believes they should be paid.

This issue often comes up when the actual work the employee is doing is more than what was expected. Conflict regarding pay typically heightens when it is time for performance reviews at the organization, as it is common to see an emotional connection from employees who equate pay raises to how much they are actually valued in the workplace.

It is very easy for someone to associate being underpaid, or under-compensated in terms of their benefits, with their value. Thus, it falls under HR to come in and mediate expectations with employees and ensure they have a healthy relationship with their managers.

4. Quality and safety of the workplace

This factor involves the overall quality of the workplace. Do employees have their own desks or cubicles? Do they have to share things like electrical outlets, monitors, or other electrical equipment? How cramped are the bathrooms, or is there a leisure area in the office?

If an office does not offer the necessities needed for employees to be productive–combined with a lack of anything from the first three factors above–employee relations could worsen.

Providing a constructive environment to be more productive is thus crucial to make employees feel important and valued in the workplace.

And now that we have discussed some of the main factors that affect employee relations, let us move on to how you as an HR professional can actually measure the level of employee relations within an organization.

The top metrics used to measure employee relations

HR professionals need to know that there are ways to accurately measure how good or how bad employee relations are within their companies. Knowing these metrics is the first step to improving the relationships between employer and employee: 

1. Employee retention rate

This refers to the percentage of employees who stay employed over a selected period of time. The more great employees a company is able to retain, the more they are able to grow in a stable and sustainable way.

This is why one of the key KPIs for HR personnel is how well they are able to come up with ways to keep employees happy and motivated to stay at the company. This directly connects to the next metric in this list: employee turnover.

2. Employee turnover rate

This metric refers to the percentage of employees who leave over a selected period of time. It typically involves both the rate that employees leave, and the rate at which they are replaced.  

According to a Glassdoor article, the average turnover rate among businesses is 57.3%. You can use this percentage to compare your company’s turnover rate to measure how well you are doing in that department.

To calculate your turnover rate, you will need (1) your company’s average number of employees, (2) the total number of employees who left, and (3) the total number of employees who were replaced.

Let us raise an example of a company that wants to learn its turnover rate for the entire year. The average number of employees can be calculated by taking the number of employees from the first day of the year, adding it with the number of employees from the last day of the year, and dividing the sum by 2.

If the company started the year with 50 employees and ended with 40, then the average number of employees would be 45 (from 50+40, divided by 2).

To get your turnover rate, simply take the number of employees who left, divide it by your average number of employees, and multiply it by 100.

In this case, it would be (10/45) x 100 = a 22.2% turnover rate.

3. Attrition rate

Slightly different from turnover, a company’s employee attrition rate refers to the gradual decrease of employees in the company. Attrition accounts for all kinds of separations, which include employees leaving the company, being laid off, contract terminations, and contracts that have simply come to an end.

Employee attrition is calculated by dividing the total number of separations by the average number of employees, and multiplying it by 100.

While the formula is similar to turnover, the attrition rate is used for a different purpose. The turnover rate is considered when calculating for positions that need to be replaced. Attrition, on the other hand, typically involves positions that do not immediately need to be replaced.

However, knowing both will help you calculate how healthy employee relations actually are within the organization.

4. Job satisfaction

Job satisfaction is a measure of general happiness and contentment in the workplace. Every company has a different way of measuring job satisfaction; An example would be having each employee rate their work experience out of 5 per week, and finding out the average weekly satisfaction by dividing the scores by the number of employees at the organization.

Honest ratings and reflections from employees can help you define negative employee relations trends far earlier, compared to letting them happen off the radar and finding out when it is too late.

5. Company milestones/KPIs

Arguably the simplest of the five items on this list, what HR professionals can do to spot any drop in employee relations is see how well the company is performing overall.

Are they hitting revenue goals? Are employees meeting their KPIs? Are they hitting goals more often than not, or are they dropping the ball in some areas, or calling in sick more often than before?

Since a company can only grow if its people grow, a company’s growth from Point A to Point B can be a strong indicator of employee relations within a company.

RELATED: The Curse of Motivation Decay: How to Deal with the Threat of Employee Burnout

RELATED: Hybrid Work: Four Ways to Strategize Employee Retention

How HR professionals can take more control of employee relations

So far, we have covered the factors that contribute to positive or negative employee relations, along with ways to accurately measure them in an organization. Now, it is beneficial to find out what you can do as an HR professional to help improve employee relations.

While employee relations often involve factors that are out of your control, like company culture, general disagreements between employees and the organization’s vision, etc., here are some ways that you can provide an impact, so you do not feel the pressure of being blamed for bad employee relations:

1. Remember to focus on what you can control.

The world of HR is incredibly stressful. A normal daily routine for HR workers would include dealing with recruitment, hiring, employee growth, satisfaction, payroll, and benefits; The list goes on. Every HR function also serves a purpose, which means that you cannot just let one go.

In fact, around 42% of HR teams suffer from burnout and exhaustion due to too many projects and responsibilities, according to the Society for Human Resource Management. Chances are that you are among these people.

The first thing to understand is you cannot control the decisions of the CEO and management. You can only empathize with employees and the organization, and come up with solutions that are beneficial to both sides.

In a progressive organization, you can bring issues up as they rise, such as issues that directly affect the happiness and motivation of employees, and how they affect productivity. As an HR professional, this is how you can provide value in improving employee relations.

Doing so will also take the weight off your shoulders from feeling like you have to handle everything alone.

2. The present: Save time on other HR functions, to make more time to improve employee relations.

Most HR functions take up several hours of an HR professional’s typical work week. However, many modern tools exist that can help them shave hours off certain tasks. Recruitment, for example, is one of the most time-consuming HR functions.

On average, recruiters need to deal with up to 40 requisitions at one time. And any HR professional tasked with bringing in the brightest talent will have to compete with this number. 

Applicant tracking systems like Manatal help eliminate the need for doing everything manually in spreadsheets, by providing HR teams with a complete applicant tracking system (ATS) that helps them automate time-intensive tasks in recruitment.

Software like these help you save hours that would otherwise be spent manually posting job openings across dozens of job boards, sourcing candidates, and recording which candidates you have and have not contacted. This time could thus be used to brainstorm for ways to improve employee relations which internally, should be your main priority.

RELATED: Here are some more resources to help you save time.

Over 400 Job Description Templates

HR Email Templates

Complete Interview Questions Database

3. The future: Improve your recruitment process to fit the organization’s talent needs.

People join an organization through recruitment efforts. And if the recruitment process is flawed in any way, then companies–and HR professionals–run the risk of spending hours on recruitment, just to bring in the wrong people.

To prevent possible negative employee relations, it is best to start early, from the recruitment process itself. While an organization’s culture is strongly dependent on its founders, what HR professionals can do today is have a strategy in place that provides the organization with a steady supply of recruits who are ready to work.

Take into account the career goals, beliefs, and motivators of each candidate, and refine your recruitment process around the ideal candidate for each job. Doing so will increase your chances of hiring employees who come in with expectations that are closer to what the company offers, and prevent misalignments in employee relations.

Your key takeaways

When trying to maintain positive employee relations, it is always best to remind yourself of what you can and cannot control in the organization.

Discuss issues that directly affect employee relations with management; While you cannot control whether your executives will take action on the matter, it is your responsibility as an HR professional to inform them and suggest how things can be better for their employees.

You can use important metrics, like employee turnover, attrition, and job satisfaction, to bolster your points by showing them the business value of your findings and suggestions.

It is also best to save time in all HR functions where you can, such as in recruitment, which normally takes hours off your regular work week. Modern recruitment SaaS like an ATS should be able to help save your time by:

• Automating job posting across multiple platforms
• Recording all applicant and candidate data in one place
• Accessing AI-driven candidate recommendation
• Tracking the progress of each candidate throughout your recruitment process
• And generating reports to gauge the success of your recruitment strategies.

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‍If you want to know how much time you can actually save from using an ATS, Manatal’s ATS is currently available for a 14-day free trial. The trial requires no commitment so you can decide whether the software can truly help. If you are interested, sign up for your free trial today!