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2020 ELMO AU NZ HR Industry Survey - The 2021 Report - FINAL
2020 ELMO AU NZ HR Industry Survey - The 2021 Report - FINAL
Survey 2020:
Your 2021 Report
Australia and New Zealand
in
partnership
with
Welcome to ELMO’s second annual “HR Industry Benchmark Survey” Report, conducted in partnership with the Australian Human Resources Institute (AHRI).
When our survey was conducted in September 2020, the world was in the grip of COVID-19. The pandemic has fundamentally changed how organisations operate, perhaps forever. This report offers a
rare opportunity to view, compare and contrast data sets from the past two years of data – one from a time before COVID-19, and one since the COVID-19 pandemic was first thrust upon the world.
ELMO has consulted with a range of subject matter experts to examine what the results mean and why they tell the story they do. Herein, we not only provide the results and insights, but provide some
handy tips to bridge the gap between theory and practice that organisations can apply in their own environments.
Moreover, in the individual sections of the Appendix covering the respective HR functional areas, we have divided our commentary into the following 3 core distinctions:
Happy benchmarking!
in
partnership
with
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2
Table of contents
• Introduction and respondent profiles Page 04 • Appendix A: Respondent profile data Page 62
• The general state of HR Page 08 • Appendix B: The general state of HR Page 69
• Appendix C: Recruitment Page 119
• Appendix D: Onboarding Page 149
• Appendix E: Performance management Page 175
• Appendix F: Succession management Page 198
• Appendix G: Learning & development (L&D) Page 216
• Appendix H: Rewards & recognition (R&R) Page 240
• Appendix I: Remuneration & benefits Page 262
Appendix J: Payroll Page 279
• Appendix K: Rostering / time & attendance Page 309
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Introduction and
respondent profiles
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Respondent profiles and sample sizes
n = 1920+
We would like to thank all HR & payroll professionals who participated in the 2020 HR Industry
Benchmark Survey. Their participation has enabled us to provide comprehensive Australian and
New Zealand (A / NZ) HR industry benchmark data that can be broken down into segments such as Level of seniority
28% 26%
country, organisation size, seniority level and industry# (referred to in this report as data segments). 24%
19%
In total, over 1800 respondents started the survey and at least completed the first section of
questions, with nearly 800 respondents having completed the survey in its entirety. All data
3%
captured has been used for the analysis to provide as large a sample size as possible. Questions at
the start of the survey have higher numbers of respondents than questions towards the end of the
survey due to survey respondent drop-off rates. Leadership / Senior Mid-level Junior to mid- Other
C-level management management level (individual
Any references to industry segments in this report align with Australian and New Zealand Standard contributor)
Industry Classification (ANZSIC) codes. Almost every question in this report has been broken down
by country, organisation size, industry# and respondent seniority level.
Sample sizes^ per question and data segment are provided for every data point in both Part 1 and
Part 2 of this report, denoted by n =. Where the number of respondents varied mid-way through a
Country Organisation Size
section of questions, the sample size has been provided for the question with the fewest
15% 14%
completions, alongside a plus sign to indicate that some questions may have had a larger sample
size. For example, if 765 people completed the first question in a given section but only 745 people 34% 53%
completed the last question in that section, the sample size has been given as n = 745+. 85%
In this report, organisations have been rolled up into three high-level categories:
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Industry codes and sample sizes
While industry data has been collected and segmented for each question during our Industry types (as per the ANZSIC industry list)
analysis, industry level information is only called out in the event of a clear pattern
or trend that is of interest for a given question. Professional, Scientific And Technical Services 17%
Health Care And Social Assistance 10%
The general rule is that, in order for responses to have statistical significance, they
should have a minimum sample size of 30 respondents. Having said that, inferences
Not-For-Profit 10%
can still be made from any data points that have less than 30 respondents and we Financial And Insurance Services 9%
have therefore left the data points with less than 30 responses visible in the report Education And Training 7%
for your perusal. It is only a small subset of the industry-segmented data that will Public Administration And Safety 7%
have less than 30 respondents for specific questions. Information Media And Telecommunications 6%
Manufacturing 6%
Construction 5%
Retail Trade 4%
Transport, Postal And Warehousing 3%
Accommodation And Food Services 3%
Electricity, Gas, Water And Waste Services 3%
Administrative And Support Services 2%
Agriculture, Forestry And Fishing 2%
Wholesale Trade 2%
Mining 2%
Rental, Hiring And Real Estate Services 2%
Arts And Recreation Services 1%
Other 0.5% n = 1920+
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Respondent involvement in specific HR areas
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The general state of HR
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Workforce decrease vs increase
Over the next year, do you anticipate the size of your workforce to:
The percentage of respondents who expected their workforce to
grow in the next 12 months declined since the 2019 survey. Given the
impact of COVID-19 and the economic downturn, this general Decrease in size Remain the same Increase in size
decline in hiring sentiment was not surprising and reflected a drop
in overall market and consumer confidence.
On the whole, it’s apparent that even during the height of the 2019 2020 2019 2020 2019 2020 2019 2020
pandemic, most employers in Australia and New Zealand were
optimistic that they would weather the storm or continue to grow. n = 633 n = 1016 n = 618 n = 651 n = 259 n = 261 n = 1510 n = 1928
SMB Mid-market Enterprise
Overall
(1 - 199) (200 - 1999) (2000 +)
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Workforce decrease vs increase per industry
*Net workforce
Over the next year, do you anticipate the size of your workforce to:
n= Industry increase
(increase – decrease)
Decrease in size Remain the same Increase in size
59 Accommodation and food services 17%
45 Administrative and Support Services 18% 25% 32% 42%
* This is calculated by subtracting the % of respondents who anticipated their workforce decreasing in size from the % of respondents who anticipated an increase in the size of their workforce. This question was answered
by all survey respondents. Rounded whole numbers can cause what appears to be a -1% or +1% discrepancy.
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Workforce growth rates per industry
* This is calculated by subtracting the % of respondents who anticipated a decrease in *Net **Average %
the size of their workforce from the % of respondents who anticipated an increase in the Industry ^n= workforce n= headcount
size of their workforce. This question was answered by all survey respondents. Rounded increase growth planned
whole numbers can cause what appears to be a -1% or +1% discrepancy. (See the
previous pages for a more detailed view of the data and how this is calculated). Accommodation and food services 59 17% 25 14%
Administrative and support services 45 18% 15 28%
** This question was only answered by respondents who intended to expand their Agriculture, forestry and fishing 34 24% 11 12%
workforce over the next 12 months, hence why there is a much smaller number of
Arts and recreation services 27 0% 6 35%
respondents per industry.
Construction 88 9% 25 19%
Overall, these results suggest that Australia and New Zealand will see a net workforce Education and training 134 -1% 35 22%
increase of 24% over the next 12 months, with an average workforce growth rate of 19%. Electricity, gas, water and waste services 59 -5% 11 10%
The 3 industries (based on a large enough sample size) expecting to expand their
Financial and insurance services 164 21% 61 21%
workforce the most in 2021 are: Health care and social assistance 202 50% 108 19%
Information media and telecommunications 118 30% 56 23%
1. Health care and social assistance: shows a 50% net workforce increase and an Manufacturing 117 27% 45 14%
average headcount growth rate of 19%.
Mining 32 13% 11 21%
2. Not for profit: shows a 37% net workforce increase and an average headcount Professional, scientific and technical services 330 28% 132 19%
growth rate of 14%. Public administration and safety 126 20% 36 25%
3. Information media and telecommunications: shows a 30% net workforce Rental, hiring and real estate services 29 24% 11 14%
increase and an average headcount growth rate of 23%. Retail trade 71 23% 27 21%
Transport, postal and warehousing 64 27% 29 23%
Wholesale trade 33 9% 7 8%
^ The general rule is that, in order for responses to have statistical significance, they should have a Not for profit 187 37% 82 14%
minimum sample size of 30 respondents. Having said that, inferences can still be made from any data
points that have less than 30 respondents and we have therefore left the data points with less than 30
Other 9 44% 4 30%
responses visible in the report for your perusal. It is only a small subset of the industry-segmented data
that will have less than 30 respondents for specific questions.
Average overall growth rate 1928 24% 737 19%
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Projected workforce growth rates
As shown by the data on the previous two pages, more organisations planned to increase than decrease their workforce over the coming 12 months. The data on this page focuses on the average
headcount growth rates. Please note that this question was only asked of respondents who indicated that their organisation intended to grow its workforce.
While the projected headcount growth rates reduced across all types of organisation, enterprise organisations were the least optimistic, with those expecting to increase headcount dropping from 31% in
2019 to 13% in 2020.
In many ways, COVID-19 presented an opportunity for organisations to take stock of their current workforce and available skill sets, and reconsider how best to use internal resources in a more efficient
and cost-effective way, rather than increasing the size of their workforces. Research from McKinsey indicates that adapting employees’ skills and roles to the post-pandemic way of working will be
critical to building resilient business models.
ELMO’s own Chief Human Resources Officer, Monica Watt, commented: “We have moved from outputs to outcomes, assessing what we can achieve with what we’ve got.”
It’s likely that, during 2021, some organisations will return employees to their workforces who were furloughed or stood down in 2020. Others may have hired people on a contract and / or casual basis
until conditions allow for full-time equivalent (FTE) increases.
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The time and cost of managing people
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Turnover rates
The overall A / NZ employee turnover rate decreased from 17% in 2019 to 15% in
2020. A possible reason for this result is that voluntary turnover (whereby an
employee willingly chooses to leave their job) decreased because people were
opting to hold onto the security of their current job rather than risk moving to a new Average turnover Average turnover
job, where they would be more vulnerable to job cuts. Organisation size n= n=
rate 2019 rate 2020
In Australia, concerns about finding a new job were amplified by the rise in
unemployment across the country. In September 2020, when this survey was
conducted, the Australian unemployment rate was 6.9%. This September 2020 figure Australia 868 17% 998 15%
was 1.7% higher than September 2019 and is the equivalent of nearly one million
people out of work.
New Zealand 118 17% 164 14%
Interestingly, the average employee turnover rate in New Zealand decreased to 14%,
even though the NZ unemployment rate barely changed and in fact slightly
SMB (1-199) 439 16% 589 14%
decreased from Sept 2019 (4.2%) to Sept 2020 (4.0%).
Another hypothesis about the decrease in employee turnover is that government Mid-market (200-1999) 408 17% 444 16%
wage subsidy schemes have worked. Such schemes meant that employees who were
stood down or had their hours reduced were able to hold onto existing jobs while Enterprise (2000+) 139 17% 129 18%
still being paid rather than scrambling to find new jobs. According to the rules of one
scheme, Australia’s JobKeeper, if an employee resigned or terminated their
employment after 1 July 2020, they were unable to receive JobKeeper payments from Overall 986 17% 1162 15%
a new employer. It’s likely that many people stayed with their existing employer in
order to access JobKeeper payments and other support.
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2020 turnover rates per industry
2019 2020
% pt.
Industry 986 1162 change
The decrease in employee turnover was fairly consistent across most industries. The
resp. resp. since 2019
only industries that reported an increase in turnover (with a large enough sample size
in 2019 and 2020 to make a reasonable comparison) were ‘public administration and Accommodation and food services 30% 27% -3%
safety’, ‘financial and insurance services’, and ‘education and training’. Retail trade 25% 21% -4%
Administrative and Support Services 18% 17% -1%
Although the survey question did not specify voluntary or involuntary turnover, given
Health care and social assistance 19% 17% -2%
the uncertain conditions of 2020, it is surprising that the overall employee turnover
Not-for-profit 19% 17% -2%
figures were not higher. However, the true test may be yet to come as the economy
Information media and telecommunications 20% 16% -4%
improves, the job market rebounds and people opt to explore employment
Construction 18% 16% -2%
opportunities elsewhere. Indeed, research from Deloitte following the global
Financial and insurance services 14% 15% 1%
financial crisis in 2009 showed that voluntary turnover tends to increase during
Arts and Recreation Services 15% 15% 0%
periods of economic recovery. The research found that those organisations that look
after their people well (or as well as they can) during a downturn, tend to fare better Education and training 12% 14% 2%
in the long-run in terms of employee retention. Professional, scientific and technical services 14% 14% 0%
Mining 11% 14% 3%
While pay increases and bonuses may not be an option, employers should consider Transport, postal and warehousing 16% 13% -3%
non-financial rewards, including cost-effective learning & development such as Public administration and safety 11% 13% 2%
special projects or mentoring programs. Employers should also aim to optimise the Manufacturing 13% 13% 0%
employee experience (e.g. wellbeing initiatives and flexible work options). A total Electricity, gas, water and waste services 11% 13% 2%
rewards strategy is one way to emphasise and promote everything an employer can Rental, Hiring and Real Estate Services 27% 12% -15%
offer an employee. Wholesale trade 15% 10% -5%
Agriculture, forestry and fishing 16% 8% -8%
A/NZ Overall 17% 15% -2%
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2020 turnover rates for new hires
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Top challenges for the next 12 months
Please select the top three items that you believe will challenge your organisation over the next 12 months:
The anticipated challenges facing business leaders in 2021 was quite different to those identified in our 2019 survey. Many of these changes
were linked to the impact of COVID-19, such as the decline in challenges associated with rapid growth and high employee turnover, both of
which were somewhat stunted during the economic downturn.
Of particular note is the fact that two learning & development-focused challenges dominate: the upskilling / cross-skilling or reskilling of
1 in 4 respondents said up-skilling, employees; and leadership development, which ranked as the top challenge back in 2019. It’s possible that employers at the time the survey
cross-skilling or reskilling employees was conducted (September 2020) were forecasting ahead to the rebuilding / recovery phase following the uncertainty of 2020. In order to do
was their top challenge this, there will be a strong need to focus on employee skills.
It’s also worth noting that challenges related to cultural change, change management, the upgrading of technology and a lack of resources all
declined, possibly due to many organisations switching focus from long-term strategy to functional, ‘day-to-day’ issues. In addition, in many
cases, dealing with change became part of every worker’s life for most of 2020.
There were only subtle differences in the top anticipated challenges based on organisation size. Enterprise organisations expected to be
slightly more challenged than their smaller counterparts by issues such as diversity and inclusion, employee wellness, remote working, a lack
of resources and high employee turnover. Mid-market organisations and SMBs expected more challenges relating to rapid growth,
1 in 2 respondents from the ‘healthcare and performance management and leadership development. SMBs also anticipated challenges relating to productivity.
social assistance’ industry said leadership
development was a top challenge By industry, several key trends stood out:
➢ Leadership development challenges were more prevalent in the ‘health care & social assistance’ and ‘manufacturing’ industries,
having been cited by 1 in 2 respondents working in these industries
➢ Upskilling, cross-skilling and reskilling employees was the top challenge for respondents from the ‘information media and
telecommunications’, ‘construction’ and ‘manufacturing’ industries
➢ Change management was the top challenge for the ‘administrative and support services’ and ‘arts and recreation services’ industries
➢ The increase in remote working was particularly challenging for respondents from the ‘wholesale trade’ industry, with 1 in 2
respondents having selected this, followed by the ‘agriculture, forestry and fishing sector’, with just over 1 in 3 respondents having
1 in 5 respondents said upgrading selected this as a challenge
technology was a top challenge
Please select the top three areas that you believe to be taking up too much of HR's time in your
organisation, relative to the value they deliver:
Similar to 2019 results, ‘general admin work’ once again dominated responses to this question. This was consistently selected as the
area that takes up too much of HR’s time, regardless of job role, company size or location. It’s an indication that, despite the time-
saving benefits of automation, there’s still a long way to go until the paperwork associated with people management becomes less
onerous. It’s also possible that due to COVID-19 and heightened government rules and regulations, general administrative work
increased for employers during 2020.
When compared to the 2019 results, far fewer respondents said they were spending their time undertaking ‘recruitment and executive
search’ or ‘onboarding / induction’. Given the more subdued hiring levels seen in most industries throughout 2020, this was not
3 in 4 respondents said ‘general admin’ surprising. It’s also worth noting the impact of technology on these areas. There has been an increase in fully implemented recruitment
took up too much of HR’s time and onboarding technology (which increased by 17% and 16% respectively).
One of the biggest increases was seen in the amount of time spent meeting with senior leaders / business partners. Again, COVID-19
was likely responsible for this rise as HR and executive teams scrambled to roll out processes and strategies to keep their
organisations operational. This was more of an issue for larger organisations: 1 in 4 respondents from enterprise organisations said
meetings with senior leaders / business partners took up too much of HR’s time, compared to just 1 in 7 respondents from SMBs and
mid-market organisations. This was the only significant difference in results between organisation sizes for this specific question.
‘Industrial / employee relations’ saw a slight increase in 2020. As mentioned elsewhere in this report, this may be attributed to more
redundancies having to be made throughout 2020 and the need to navigate the complex industrial landscapes. For further information,
download ELMO’s guide to HR compliance in Australia and New Zealand.
1 in 7 respondents from SMBs and mid-
market organisations said ‘meetings with When analysed by job role, many senior managers and C-suite leaders selected ‘operations management’ as something taking up too
senior leaders / business partners’ took up much of HR’s time. In the earlier stages of the COVID-19 pandemic, HR was often responsible for providing strategic direction, but also
too much of HR’s time for ensuring day-to-day operations continued. It also often fell to this cohort to train junior managers on how to manage remote or
geographically dispersed workforces. Other areas that C-suite leaders felt took too much time for HR included industrial / employee
relations and functional areas such as workforce management (rostering / time & attendance) and performance management.
Which of the following stages best describes your organisation's current state
of HR & payroll technology?
Fully implemented Currently implementing Less than 12 months away More than 12 months away Not considering at all I don't know
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The implementation of HR technology
69% 20% The graph on the previous page shows how prominent communication / collaboration platforms have
of respondents have are currently become, with 69% of respondents indicating this type of technology is fully implemented in their
already fully implemented implementing a organisations and an additional 20% indicating that it’s currently being implemented. In terms of being
a communication / communication / fully implemented, this is second only to payroll. The rise of remote working is no doubt why this type of
HR technology was in such high demand throughout 2020. At the height of the pandemic, research from
collaboration platform collaboration platform
AON indicated that communication was the biggest challenge facing HR leaders. Different research from
Forrester showed that 63% of Australians admitted to being less productive at home, and only 54%
believed their organisation had the technology and resources to enable effective remote working.
Another direct impact from COVID-19 was the uptake of employee wellness technology. In this graph,
78% 54% employee wellness shows the largest percentage of respondents who are ‘currently implementing’.
Current and future technology adoption is seen most prominently in recruitment, onboarding and core
of respondents have fully of Australians believe
HR. Less prominent is succession management and workforce planning.
implemented payroll their organisation had the
technology technology and resources
to enable effective remote
working
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HR technology implementation trends
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% change in HR technology implementations
The table on the previous page showed that the uptake of various types of HR technology is steadily rising and is forecast to boom during 2021. This table presents the same data but also includes the
‘% point change’ and ‘% change’ in HR technology implementation levels.
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Key insights about the uptake of HR technology
Larger organisations are more likely to have fully Remuneration / compensation & benefits 48% 45% 49% 56%
implemented HR technology due to the complexities of Rewards & recognition 39% 37% 38% 48%
managing large workforces. However, there are a Rostering / time & attendance 51% 49% 50% 61%
number of HR technology types where the Succession management 21% 21% 18% 29%
implementation levels across SMBs are almost Workforce planning 27% 27% 23% 40%
comparable to implementation levels for larger Workplace health & safety (WHS) 59% 57% 60% 67%
organisations. For example, work health & safety,
payroll, core HR and onboarding. Saturation map scale:
Lowest Highest
value value
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Use of software / technology to minimise challenges
Over the following pages, the survey data is analysed to determine which
challenges in specific functional HR areas are assisted by the use of software / Has fully implemented Does not have fully
technology. technology implemented technology
% pt. change
Recruitment: What are your organisation's key Total resp. Total resp.
recruitment challenges? n = 600 n = 308
Respondents with fully implemented recruitment software / technology
showed a reduction in roughly half of the challenges listed. Creating a positive candidate experience 18% 20% 2%
There were some surprising results. For example, even with technology Building a stronger employer brand 31% 30% -1%
implemented, 50% of respondents still found competition for talent to be a
challenge (versus 43% for those without technology implemented). While A manual or inefficient recruitment
18% 40% 22%
more automation helps to reduce the time and resource challenges associated process
with each step in the talent acquisition process, it cannot by itself help Reducing the time to hire 26% 24% -2%
employers find the right talent. However, with process-related tasks handled
more effectively, the focus can shift to enhancing the employer brand, which in Competition for talent 50% 43% -7%
turn can be used in the war for talent.
Skills shortage 43% 39% -4%
Technology also streamlines processes such as making job offers, which can Slow decision making / too many
enhance the candidate experience. The latter became an even more critical 28% 23% -5%
stakeholders
element to consider during the remote working conditions seen throughout
Lack of HR resources 16% 19% 3%
most of 2020.
It’s also worth noting the significant impact technology can have on easing the None - we have no challenges 6% 6% 0%
burden of manual or inefficient recruitment processes. In enterprise
organisations, for example, 44% of those using recruitment technology Saturation map scale:
indicated this was a challenge; this was selected by 70% of those without Lowest Highest
technology. value value
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Use of software / technology to minimise challenges
Onboarding:
Has fully implemented Does not have fully
Respondents who use onboarding software / technology technology implemented technology
selected fewer challenges than those who don’t. In particular, % pt. change
What are your organisation's key onboarding Total resp. Total resp.
they reported a significant reduction in challenges relating to
challenges? n = 415 n = 376
ad hoc or informal onboarding processes. There was also
double the amount of respondents who selected ‘none – we
Ad hoc steps / lack of formal processes 18% 44% 26%
have no challenges’ for those who had onboarding technology
implemented compared to those without onboarding Too little information for new hires 8% 19% 11%
technology.
Too much information for new hires 33% 24% -9%
However, it’s also apparent that technology does not resolve
Lack of role clarity for new hires 16% 20% 4%
all challenges. For example, challenges relating to the lack of
regular check-ins with new hires was only marginally reduced Lack of orientation for new hires 16% 32% 16%
for those who use technology. This may be due to the fact that
Lack of training for new hires 22% 27% 5%
the success of onboarding remains tied to interpersonal
relationships, such as that between manager and employee. Lack of training for you / your team 9% 10% 1%
While technology may provide reminders and prompts to
Length of onboarding process 19% 19% 0%
undertake certain tasks, it has limited impact on enhancing
those relationships. Lack of regular check-ins with new hires 31% 40% 9%
Certain challenges were amplified by technology. For example, Integrating new hires into teams / culture 32% 33% 1%
‘too much information for new hires’ was cited as a challenge
None - we have no challenges 14% 7% -7%
by 33% of those who have technology but only 24% of those
without technology. This reinforces how critical it is to have
structured onboarding steps with the right information
Saturation map scale:
Lowest Highest
disseminated at the right times throughout the process.
value value
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Use of software / technology to minimise challenges
‘Senior leadership buy-in’ was selected as a challenge by roughly Meeting compliance obligations 20% 18% -2%
a quarter of respondents, regardless of their technology status. Providing access to learning content 15% 27% 12%
This indicates that improvements may still need to be made in
terms of quantifying the value of L&D to the business. Being able Training program logistics 16% 20% 4%
to provide key metrics or return on investment statistics can also None - we have no challenges 8% 5% -3%
assist with securing budgets and funding for learning initiatives.
Saturation map scale:
Lowest Highest
value value
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Use of software / technology to minimise challenges
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Use of software / technology to minimise challenges
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Use of software / technology to minimise challenges
Rewards & recognition: Has fully implemented Does not have fully
technology implemented technology
Inconsistency across managers, departments, etc. was the biggest
% pt. change
challenge for respondents when it came to rewards & recognition, What are your organisation's key rewards & Total resp. Total resp.
regardless of whether or not software / technology was utilised. recognition challenges? n = 249 n = 383
However, there were several areas where it was clear that software /
technology does help to overcome challenges. Examples include: Discretionary effort is not recognised or
18% 34% 16%
rewarded
● Recognising or rewarding discretionary effort (cited by 18% High performers are not recognised or rewarded 17% 29% 12%
of those with technology and 34% of those without Inconsistency (e.g. across managers,
technology)
37% 47% 10%
departments, etc.)
● High performers not being rewarded or recognised (cited by Lack of budget 28% 35% 7%
17% of those with technology and 29% of those without Lack of insight into what rewards employees
technology)
19% 34% 15%
would value
● Lack of insight into what kinds of rewards and recognition Lack of peer-to-peer recognition 12% 22% 10%
employees would value (cited by 19% of those with Lack of personalised rewards & recognition 20% 32% 12%
technology and 34% of those without technology) Lack of resources 12% 21% 9%
It’s also apparent that technology assists in the delivery of peer-to- Lack of time 8% 15% 7%
peer recognition and personalised rewards & recognition. Low engagement with program 23% 16% -7%
Over-reliance on financial reward 20% 23% 3%
The only challenge that was not selected less by those with
Recognition is not timely 20% 26% 6%
technology was ‘low engagement with program’, which may indicate
None - we have no challenges 13% 8% -5%
that employers can’t fall into a ‘set and forget’ mentality when it
comes to rewards & recognition. Any rewards & recognition program
Saturation map scale:
needs to be regularly updated and communicated to employees. Lowest Highest
value value
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Use of software / technology to minimise challenges
Remuneration & benefits: Has fully implemented Does not have fully
technology implemented technology
Compared to the other functional areas, remuneration & benefits % pt. change
What are your organisation's key Total resp. Total resp.
challenges were not as greatly impacted by the use of software /
technology. However, it’s telling that a fifth (20%) of respondents with remuneration & benefits challenges? n = 268 n = 334
software / technology indicated they have no challenges at all, while only
11% of those without software / technology made the same claim. It’s also Can't compete with external market rates 32% 31% -1%
apparent that software / technology reduces challenges relating to not
having structured processes in place. Lack of flexibility 10% 14% 4%
It’s also clear that technology can only do so much. For example, Lack of transparency 15% 24% 9%
‘misalignment between performance and remuneration’ remained a
Misalignment between performance and
challenge for 32% of those respondents with technology, which was only 32% 41% 9%
remuneration
slightly better than the 41% of those without technology who cited this as a
challenge. This might indicate that the gap between performance and No structured management process 14% 34% 20%
remuneration can be closed more effectively by ensuring that there is
meaningful feedback between managers and employees and by Process is too complicated 9% 8% -1%
encouraging realistic key performance indicators (KPIs) and objectives &
key results (OKRs) to track and encourage better performance. Process is too lengthy 7% 10% 3%
Another example is the inability to compete with external market rates, Remuneration budget is frequently over 7% 6% -1%
which was cited by 32% of those with technology and 31% of those without
technology. However, while software / technology by itself cannot improve Remuneration budget is frequently under 11% 11% 0%
market competitiveness when it comes to remuneration, it can help ensure
remuneration budgets are being optimised through budget modelling and None - we have no challenges 20% 11% -9%
other tools, and help managers make more informed decisions by
providing them with greater access to remuneration data. Saturation map scale:
Lowest Highest
value value
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Use of software / technology to minimise challenges
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Use of software / technology to minimise challenges
Rostering / time & attendance: Has fully implemented Does not have fully
technology implemented technology
Those who are using rostering / time & attendance software % pt. change
/ technology are faced with fewer challenges than those who What are your organisation's key rostering / time & Total resp. Total resp.
are not. attendance challenges? n = 205 n = 151
The challenges that were selected significantly less by Ability to monitor shift and roster costs 13% 17% 4%
respondents who use a form of rostering / time & attendance Communication to employees about rosters and changes 19% 17% -2%
software / technology were: Compliance 13% 19% 6%
● Manual processes Data input errors 19% 23% 4%
● No real-time reporting Ineffective leave management 17% 26% 9%
● A lack of alignment with their payroll system Ineffective reporting 9% 20% 11%
Ineffective rostering 12% 23% 11%
In addition, ineffective rostering was selected by 12% of Keeping up to date with industrial awards, etc. 17% 13% -4%
those who have software / technology implemented and Lack of flexible reporting 11% 15% 4%
23% of those who do not. Compliance-related challenges Manual processes or workarounds 29% 42% 13%
were also fewer for those who use software / technology. Monitoring certification eligibility to do particular shifts (e.g.
7% 8% 1%
licences, RSAs)
Conversely, ‘keeping up to date with industrial awards, etc.’ No or ineffective integration of employee systems across HR
was selected more by those respondents utilising software / 16% 31% 15%
vs. rostering / time & attendance, and / or payroll systems
technology, as was ‘too much absenteeism’. The latter is
No real-time reporting 14% 27% 13%
possibly due to absenteeism being easier to track with
The effort to fill a roster 13% 19% 6%
software / technology, thus making it more transparent if /
Too much absenteeism 16% 12% -4%
when absenteeism levels increase. Too much overtime 11% 14% 3%
The ratio of respondents who said that they do not have any None - we have no challenges 19% 22% 3%
challenges is roughly the same, regardless of whether or not I don't know 9% 6% -3%
rostering / time & attendance software / technology was Saturation map scale:
implemented. Lowest Highest
value value
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Collaboration tools / software
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Priorities for FY20/21
2020 proved just how adaptable and agile organisations need to be in order to survive HR Priorities
in a VUCA (volatile, uncertain, complex and ambiguous) world. Here are the top 3
priorities identified by respondents, based on a combination of their ‘high’ and
Employee wellness 50% 37% 9% 4%
‘medium’ priorities:
Compliance 55% 29% 10% 6%
1. Employee wellness: Half of respondents said this was a high priority for their
organisation and roughly another third said it was a medium priority. This Learning & development 34% 44% 18% 4%
means that almost 90% of organisations plan to focus on employee wellness Workplace health & safety (WHS) 43% 35% 15% 8%
in 2021. In 2019, employee wellness was a high or medium priority for almost
Performance management 31% 44% 17% 7%
75% of organisations, so there was a priority shift between 2019 and 2020. This
was likely linked to the impact of COVID-19 on employee mental health and Communication / collaboration platforms 33% 36% 18% 13%
wellbeing (view Australian research here and New Zealand research here). HR reporting & analytics 24% 44% 24% 8%
2. Compliance: In 2019, 76% of respondents said compliance was a high or Diversity & inclusion 31% 37% 23% 9%
medium priority. This increased to 84% in 2020. This can be attributed to many
Workforce planning 25% 42% 23% 10%
factors. For example: the introduction of various government support
initiatives, especially wage subsidy programs, new work health and safety Recruitment 29% 37% 24% 11%
obligations relating to COVID-19, and the many compliance obligations related Managing a remote workforce 30% 34% 21% 15%
to workforce downsizing.
Onboarding 20% 40% 26% 14%
3. Learning & development: In 2019, learning & development was the top
Infrastructure to better support remote working 24% 36% 24% 16%
priority, with 80% of respondents saying it was a medium or high priority for
their organisation. While this figure was similar in 2020 (77%), employee HR technology implementation or consolidation 29% 31% 24% 16%
wellness has become a greater priority than learning & development. However,
Rewards & recognition 17% 41% 29% 13%
it stands to reason that professional development would remain a key way to
increase employee capability, productivity and retention. Many employees Remuneration / compensation & benefits 15% 39% 32% 13%
were also required to upskill or reskill in new areas in order to take on the roles Offboarding 7% 22% 41% 30%
left by their departed colleagues. Research from McKinsey suggests that
employers who committed to employee professional development during the
High Medium Low Not a priority
pandemic will emerge stronger from the crisis.
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Budgets in FY20/21
HR Budget
5. Management of a remote workforce (31%) Communication / collaboration platforms 34% 28% 5% 7% 26%
Rewards & recognition 18% 42% 13% 6% 21%
Below are the top 5 areas where HR budgets decreased from
2019: HR reporting & analytics 19% 41% 6% 13% 21%
Remuneration / compensation & benefits 19% 41% 15% 5% 21%
1. Remuneration / compensation and rewards (15%)
Managing a remote workforce 31% 28% 3% 13% 24%
2. Learning and development (14%)
Workforce planning 16% 43% 5% 11% 24%
3. Recruitment (14%) Diversity & inclusion 16% 41% 5% 14% 24%
4. Rewards & recognition (13%) Offboarding 8% 46% 7% 15% 24%
5. Onboarding or offboarding (7%)
Increased from last year Same as last year Decreased from last year
No budget allocated this year I don't know
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Priorities and budgets FY20/21
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Metrics used to assess HR performance
Which metric(s) does your organisation use to measure the overall performance of your HR department?
Almost 1 in 3 organisations (32%) did not measure the performance of their HR department in 2020. This result was higher for SMBs (39%) and significantly lower for enterprise organisations (13%).
Employee turnover, employee engagement and employee absenteeism were the most commonly used metrics for assessing HR performance for organisations of all sizes.
Other responses did vary depending on organisation size however. For example, length of service was more likely to be utilised as a metric by mid-market organisations (23%) than enterprise
organisations (15%) and SMBs (18%).
Diversity and inclusion targets were used to measure HR performance by 27% of enterprise organisations, 7% of SMBs and 15% of mid-market organisations. This indicates that even larger
organisations are not very focused on diversity and inclusion beyond their mandatory compliance obligations. This insight is also echoed by the fact that only 10% of mid-market and enterprise
organisations use pay equity metrics as a means of gauging HR performance.
It’s important to note that, in some cases, HR appears to be assessed against metrics they have little or no influence over, such as employee turnover. This metric is a more accurate reflection of
managers’ performance than that of HR. Other metrics, such as customer satisfaction scores, are perhaps still not widely used due to the persistent belief that they are simply ‘not for’ HR and are better
suited to tracking the performance of other parts of the business. Other important metrics (which were not included in the survey response options) are: internal referrals; ‘boomerang employees’ (i.e.
returning employees); and ‘cross-boarding’ (i.e. employees who move to other roles within the same organisation).
Indeed, as the HR function matures and evolves, so too will the corresponding metrics and measures. For those just starting out on this journey, Deloitte recommends 7 key steps:
1. Start where you are: Assess your organisation’s current HR metrics capabilities and what your needs are to gain clear insight into potential gaps. Focus first on the ’lower hanging fruit’, or easy
wins, while developing a longer-term analytics road map.
2. Ask the right questions: Understand which questions matter most to HR, as well as to the broader business (including strategy and priorities).
3. Use ‘right-size’ metrics: Match the metrics and measurements with those ‘right questions’ that need to be addressed.
4. Accelerate insights: Automate the delivery of key information to HR (and organisation) stakeholders.
5. Focus on user engagement and visualisation: Create output that delivers insights end users truly need in the forms that will enable HR and the business to execute fact-based decision-making.
6. Work towards creating a fact-driven culture: Embed metrics and reporting capabilities into HR decision-making processes and procedures.
7. Remember change management: Knowing how and when to communicate change to users and HR customers takes significant planning and strategy. Whenever changes are made, additional
business risk is always introduced.
How would you describe your organisation's skill level using HR metrics?
None: We don't use HR metrics at all
4% 5%
Basic: We have some basic HR metrics but 11% 12% 13%
19% 20%
they don't factor heavily into business 28%
decisions
37% 36%
40%
43% 41%
Developing: We track HR metrics and leverage 42%
44%
these metrics for decision-making purposes
42%
35%
Optimised: We track HR metrics and apply 42%
descriptive analytics, pulling insights out of 35% 32% 34%
historical data to facilitate our decision-making 29%
27%
22% 8%
8% 5%
Advanced: We track HR metrics and apply 5% 8% 5% 5%
4% 3% 11% 2%
predictive and / or prescriptive analytics, 6% 6% 5% 4%
3% 3% 4%
forecasting future possibilities and options, to
better inform our decision-making 2019 2020 2019 2020 2019 2020 2019 2020
SMBSMB
(1 - 199) Mid-Market
Mid-market (200 - 1999) Enterprise
Enterprise (2000+) Overall
I don't know Overall
(1 - 199) (200 - 1999) (2000 +)
The comparison of 2020 results with 2019 results revealed limited change in the level of skill in the use of HR metrics. Indeed, results in 2020
could be deemed disappointing. In 2019, 34% of respondents classified their skills in the use of HR metrics as ‘developing’, but this dropped to
27% in 2020. There was also an increase in the percentage of organisations that were not using any metrics at all (13% in 2019 vs. 20% in 2020).
Enterprise organisations remained the leaders, with 43% of respondents classifying their usage of HR metrics as either ‘developing’ or
Just over 1 in 4 respondents rate
‘optimised’. Mid-market organisations were slightly behind, with 40% using those two classifications. The skill level of SMBs regressed across
their skills in HR metrics as
all classifications (‘basic’, ‘developing’, ‘optimised’ and ‘advanced’). The number of SMB respondents that selected ‘none’ increased from 2019
‘developing’
to 2020.
While it’s understandable that upskilling in metrics may have taken a back seat during a challenging year, it’s also apparent that what suffers
the most without the use of HR metrics is the level of organisational insight. It’s difficult to anticipate risks, inform strategy and prepare for the
future without HR metrics. It’s also difficult to justify decisions without accessing and utilising metrics – and in 2020 there were plenty of tough
decisions to be made (e.g. downsizing). A lack of knowledge about the metrics that matter can result in blanket decisions being made on the fly,
instead of a more nuanced and targeted approach being taken. The former approach can be devastating, especially when it comes to
redundancies and other significant corporate upheavals.
1 in 5 respondents do not use any
HR metrics at all Research in June 2020 by the HR Analytics ThinkTank revealed how crucial it is for HR professionals to have at least a basic level of HR metrics
in place during uncertain times. In that research, 79% of those surveyed said their analytics function added more value to HR decision-making
during COVID-19 than during other, more settled times. This basic data (for example, headcount data, work style or work-from-home data,
absence and sickness data, employment type data and productivity data) is what will add value down the line as new challenges emerge and
organisations return to some semblance of 'normal'.
Similar to the findings of our data (see ‘challenges faced implementing HR metrics’), the HR Analytics ThinkTank research also revealed how
critical it is to have the right technology and tools. Nearly half (45%) of respondents said they lacked the tools to add the most value to
decision-making during COVID-19.
Almost 1 in 10 enterprise
respondents said their skills in HR Cloud technology may be assisting. The HR Analytics ThinkTank research found that 95% of respondents were able to access data and software
metrics was ‘optimised’ remotely – in other words, they did not require access to on-site technology and tools.
What are the top five challenges you have faced / are facing when trying to implement HR metrics within
your organisation?
Identifying quantifiable links between HR and business goals, identifying value-add HR metrics, subjectivity of HR metrics, and linking
incentives with HR metrics have all increased significantly as challenges since 2019. These results show that HR teams are struggling to
develop metrics that have real meaning for their senior leaders and, as such, may not be accurately demonstrating the true value of their
efforts. However, looking at these significant shifts through a positive lens, it means that more HR teams are starting to think about
More than 1 in 2 respondents struggle metrics and trying to determine how to use them effectively.
to identify quantifiable links between
HR and business goals Different HR metrics will be meaningful to different types of stakeholders. Within an HR team, there might be a number of metrics used to
measure success and manage performance specific to HR activities. The collection of these metrics is commonly referred to as an HR
scorecard. The HR scorecard is not solely about HR performance – it is about enabling market opportunities, building competitive
advantage, and driving business results (read more here).
This definition means that HR metrics must be linked to the overarching business goals. HR must fully understand what the business goals
are to identify what metrics will be of interest at the executive level. For example, if one of the organisation’s goals is to gain more market
share, then HR needs to familiarise themselves with the plan to do this, and what HR activities will contribute to the success of this goal.
If the plan to gain market share is to acquire other organisations and their existing staff, then HR might use metrics that quantify the
4 in 10 respondents said obtaining
efficiency of onboarding acquired employees into the company (e.g. time taken to complete the transition process) and the experience
raw data was a key challenge
that acquired staff have when they start with the new company (e.g. employee engagement measured through employee experience and
engagement surveys and the subsequent turnover rate of acquired staff).
However, if the plan is to gain more market share by expanding and upskilling the sales team, the metrics would be very different. Metrics
such as time to hire new sales professionals and the quality of the hire (e.g. time it takes to start meeting sales targets and hiring manager
feedback about new starter performance) will be of greater interest to the C-suite. In addition, any costs relating to learning &
development for sales staff might be analysed in conjunction with the increase in sales to assess how effective the learning &
development was and the return on investment.
1 in 3 respondents said a lack of skills Without clear guidance about the overarching goals and objectives of the organisation, it is challenging for HR teams to determine
among HR staff was a challenge meaningful metrics to present to leaders that demonstrate how HR has contributed to those goals.
Which of the following areas does your organisation measure the performance of?
Recruitment 43%
52%
Workplace health & safety (WHS) 42%
51%
Learning & development 40%
39%
Performance management 39%
43%
Organisational culture 34%
37%
Diversity & inclusion 31%
25%
Employee wellness 30%
22%
Payroll 28%
30%
26%
2020 (n = 863)
Onboarding 26%
Remuneration / compensation & benefits 25% 2019 (n = 803)
36%
Industrial / employee relations 22%
23%
Communication / collaboration 19%
N/A
Rostering / time & attendance 19%
20%
Rewards & recognition 18%
23%
Succession management 8%
11%
Organisational design 4%
6%
None - we don't measure the performance of any areas of our organisation 8%
N/A
I don't know 5%
6%
Technology plays a significant role in assessing various aspects of organisational performance. All
areas, from recruitment and payroll through to performance management and employee wellness,
9 in 10 respondents with fully implemented technology are able were more likely to be assessed when technology was fully implemented.
to measure the performance of their payroll processes
However, apart from a few exceptions, most areas that could be measured declined between 2019
and 2020. Performance management, recruitment, workplace health & safety and remuneration /
compensation declined the most.
Several areas saw an uptick in measurement, including employee wellness and diversity & inclusion.
Given the events of 2020, it was no surprise to see employee wellness increase as a means of
assessing organisational performance, simply because so much depends on having healthy
employees – from levels of absenteeism and presenteeism to productivity and engagement.
Just over 1 in 2 respondents with fully implemented technology The reasons for the increased number of respondents who selected diversity & inclusion as a means
are able to track and assess employee wellness of assessing organisational performance were less clear-cut. This relatively high level (31%)
contradicted the responses to a previous question, which asked about the metrics used to specifically
assess HR performance (where diversity & inclusion declined as a metric). This could be due to
diversity & inclusion moving beyond being deemed solely an ‘HR problem’. It is now seen as the
responsibility of all business leaders and executives. Indeed, there are now statutory reporting
requirements relating to gender equity, which is a critical part of most diversity & inclusion programs.
In Australia, all non-public sector employers with 100 or more employees in their corporate structure
are required to report annually to the Workplace Gender Equality Agency (WGEA). A similar
requirement is being debated in New Zealand.
3 in 4 respondents with fully implemented technology are able
to measure the performance of their recruitment function
Which skill(s) are you aiming to develop for yourself in the next 12 months?
Strategic planning was the most popular skill for HR to develop for themselves over the coming 12 months. Having come through the crisis management phase, where the focus was on keeping
people safe and ensuring supply lines and critical areas of business kept humming, 2021 will be about post-pandemic strategy. This requires a conscious shift in thinking. One Forbes article stated:
“It’s going from ‘fire fighting’ to fire-starting, from tactical to strategic. It’s about shifting from an ad hoc, crisis-driven, reactive mode of operating, to a pro-active, can-do, seeing-what’s-next mode of
operating. It’s about carving out time to consider how the world is changing, and will evolve during the next year, three years and five.”
‘HR reporting & analytics’ was the second most popular skill to develop. Although HR’s use of data and analytics was still low throughout 2020, having ‘HR reporting & analytics’ rate so highly as a
desired skill indicates a growing awareness that data literacy will be critical as organisations emerge from COVID-19. PwC stated the following:
“In an effort to stay competitive in the modern and complex business landscape, particularly as a result of COVID-19, organisations should continue to leverage analytics to forecast their workforce
requirements and to better optimise revenues and reduce costs. They should also become more reliant on analytics to measure and monitor workforce performance and productivity. By regularly
analysing and monitoring employee performance and engagement metrics, HR can determine the strategic talent acquisition, development and management decisions required to prepare the
workforce for the challenges they will face post COVID-19.”
Despite several ‘soft’ (or ‘essential’) skills having been identified as the top recovery-focused HR skills in 2021 by the Australian Human Resources Institute (among them flexibility, adaptability and
agility), in this survey, ‘soft’ skills fared poorly. Negotiation skills and problem solving were given low priorities, although a quarter (25%) of respondents indicated ‘communication’ was a focus area.
● ‘Risk assessment and mitigation’, which saw a 5 percentage point increase from 2019. In many organisations, risk management took on new urgency as leaders dealt with increased
regulations and compliance requirements. The focus on employee health and safety due to COVID-19 also likely increased the desire to learn more about risk assessment and mitigation.
● ‘Change management’, which remained popular, with just under a third (32%) of respondents selecting this. This is also a rapidly evolving area, which HR would benefit from staying on top
of. For example, Gartner research shows that successful change management outcomes require a shift away from the traditional cascading of initiatives down from senior leaders to
employees. Open-source change involving employees directly is seen to be more effective. Gartner says the probability of change success increases by as much as 24 percentage points with
an open-source approach.
● ‘General business knowledge and skills’, which was selected by just under a third (28%) of respondents. This figure was higher for junior to mid-level managers. COVID-19 has also likely
impacted this area. Although HR professionals have been criticised for their lack of general business knowledge in the past, the pandemic forced organisations to rely on and leverage HR in
unprecedented ways. This in turn improved HR’s depth of knowledge across all facets of business operations. For perhaps the first time in the profession’s history, ‘general business
knowledge and skills’ is less of a priority.
5% 5% 3% 3% 5% 5%
8% 12%
11%
30% 29%
21% 35%
48% 41%
53%
81%
67% 69% 67%
61%
54%
48%
42%
SMBSMB
(1 - 199) Mid-Market
Mid-market (200 - 1999) Enterprise
Enterprise (2000+) Overall
Overall
(1 - 199) (200 - 1999) (2000 +)
A formal process to measure employee engagement is embedded into just over half (54%) of the organisations surveyed. There were slight variations based on organisation size. For example, 2 in 3
mid-market and enterprise organisations indicated they had a formal process in place, while less than half (42%) of SMBs had something in place. SMBs and enterprise organisations saw a decline
in the use of formal processes to measure engagement between 2019 and 2020, and indeed, the overall percentage of those using formal processes declined from 61% in 2019 to 54% in 2020.
Research has shown that many of the disruptions taking place prior to COVID-19, such as new business models being implemented and exponential technology usage, have only been hastened by
the pandemic. As a result, measuring employee engagement has never been more critical. HR industry observer Josh Bersin suggested that at the height of the pandemic, many organisations were
treating their employees better than ever before. Bersin added that employee disengagement – a problem that plagues more than two-thirds of organisations year after year – actually decreased
due to this care and attention, not to mention the extra focus on corporate culture. It therefore makes sense that business leaders would want to regularly “check the pulse” of their workforce by
undertaking regular engagement surveys.
More than 1 in 2 respondents have a formal 4 in 10 SMB respondents have a formal 2 in 3 mid-market and enterprise organisations have
process in place to measure engagement process in place to measure engagement a formal process in place to measure engagement
81%
Engagement surveys
85%
65%
Exit surveys
66%
53%
Pulse surveys
43%
40%
One-on-one meetings with employees 2020 (n = 600)
35%
2019 (n = 578)
30%
Onboarding surveys
27%
18%
Employee Net Promoter Score (eNPS®)
16%
9%
Stay surveys
8%
0%
I don't know
1%
Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.
In terms of how employee engagement is measured, the biggest change from 2019 was the increase in the use of pulse
surveys, followed by the increase in the use of onboarding surveys and one-on-one meetings with employees.
The popularity of pulse surveys has grown in recent years, with research showing that for organisations not using traditional
engagement surveys, most (64%) are using small-scale pulse surveys and one-off, topic-specific surveys to measure
4 in 5 respondents use engagement surveys to engagement.
measure employee engagement
A ‘less is more’ mentality is driving the rationale for shorter, sharper surveys. Another reason for their increased popularity
is because the amount of data gathered, analysed and actioned from these surveys is far more manageable for everybody –
HR teams, senior leaders and managers. A smaller volume of insights can be digested and actioned per survey, which
means that surveys can be conducted more regularly. It also means employee engagement is tracked more frequently.
Some organisations undertake weekly, monthly or bi-monthly surveys to have a constant measure of engagement, which
can be combined to create an ‘end-of-year score’.
PeoplePulse, an ELMO company, suggests these best practice tips when using pulse surveys:
Just over 1 in 2 respondents use pulse surveys ● Limit the number of questions asked so that the information gathered remains relevant and survey respondents
to measure engagement don’t feel overwhelmed
● Ensure the questions are relevant to your organisation’s current goals and opportunities
● Prepare in advance a simple action planning framework and post-survey communication plan that can be executed
in a timely manner after the survey results have been released. Delays in releasing reports and / or action planning
can mean that survey results are quickly forgotten about because business priorities can change so quickly
● Identify your top 2 or 3 strengths to promote to the wider organisation to reinforce positive messages, but do not
forget to be open and transparent about at least one area of opportunity to improve, which the organisation is
willing to commit to changing. This balanced approach is important, as it demonstrates that leaders have listened
to employee feedback, taken it seriously and will do something with it
Just under 1 in 10 respondents use stay surveys ● Whenever there is an opportunity to do so, leaders should regularly mention the initiatives being introduced in
to measure engagement employee discussion forums, and link these back to the results from the pulse survey. This format can be very
simple, e.g. “You said… So we did…”
Why doesn't your organisation have any formal processes in place to measure employee engagement?
We don't feel the need for a formal process given the size of our organisation 24%
14%
We don't have buy-in from senior leadership (e.g. C-level, Directors) 23%
26%
I don't know 8%
6%
We don't see measurement of employee engagement adding significant value to the organisation 4%
7%
‘We don’t feel the need for a formal process given the size of our organisation’ was the number one reason for not measuring employee engagement,
which was almost exclusively selected by SMBs. Some 33% of SMBs and 4% of mid-market respondents selected this option.
A lack of buy-in from senior leaders was an issue for 23% of SMBs and 19% of SMBs. Somewhat surprisingly, this was selected by 38% of enterprise
respondents.
‘Too busy to implement / no resources’ appeared to be more of an issue for larger organisations. This was selected by 18% of SMBs, 27% of mid-
1 in 4 respondents said a lack market organisations, and 31% of enterprise organisations.
of senior leadership buy-in was
their biggest engagement A higher percentage of mid-market organisations had a formal process in place to measure engagement than enterprise organisations, and of those
measurement challenge that didn’t, 30% said they were in the process of planning one.
Regardless of organisational size, in times of great uncertainty and change, hearing and acting upon ‘the voice of the employee’ becomes more
important. Employee surveys can be used to help organisations gather baseline data to build business cases and measure the impact of change
initiatives.
Obtaining senior leadership buy-in is critical. Here are two tips from PeoplePulse, an ELMO company, to obtain that buy-in:
● Link employee engagement results with business performance metrics. This can be a way of demonstrating how employee engagement has a
tangible impact on the organisation and can be done at both an organisational and departmental level. For example, if engagement levels
were to go down in the Customer Service department, would there also be a decrease in customer satisfaction or an increase in employee
turnover? For each department, use one or two common metrics that are easy to source, such as employee turnover and absenteeism rates,
1 in 3 enterprise respondents plus one or two department-specific metrics that relate to department performance, such as sales revenue, customer retention, or data input
said they were too busy to accuracy rates. HR may need to partner with other stakeholders in the organisation to capture some of the additional metrics. Doing so
implement a measurement provides a more holistic employee engagement scorecard that can directly link employee engagement back to business performance.
process or did not have ● Promote the benefits of having a ‘feedback culture’. Employee surveys that are executed well don’t just gather data that is useful to a select
resources to do so group of people. Everyone stands to benefit. Survey results give senior leaders an opportunity and platform to connect with their people and
show them that their collective voices are valued. Sharing survey learnings openly and transparently with the wider organisation models a
culture where people are listened to, their feedback is genuinely valued, and it is safe to put forward suggestions and raise new ideas.
Other 11%
n = 1194
I don't know 1%
An employer’s duty of care extends not just to creating safe working conditions, but also to doing
3 in 4 respondents use employee assistance whatever is possible to safeguard the wellbeing of employees. COVID-19 reinforced how critical this
programs (EAPs) to support employee wellbeing duty of care is, especially with remote working becoming so widespread in 2020.
Employee Assistance Programs (EAPs) were by far the most popular wellbeing initiative, with 2 in 3
SMBs and 9 in 10 mid-market and enterprise organisations having one in place.
The focus on mental health throughout 2020 is confirmed by other research. For example, The State of
Wellbeing in Australia report by the Australian Human Resources Institute and The Wellbeing Lab
found that over 80% of surveyed workers were anxious about the coronavirus and over 90% said they
were nervous about the economy. Only 10% of workers said they were ‘constantly thriving’. The
1 in 4 respondents use mental health days / situation was similar in New Zealand. Research from the University of Otago indicated that 30% of
programs to support employee wellbeing those surveyed reported moderate to severe psychological distress and 16% had moderate to high
levels of anxiety. Almost 40% said their level of wellbeing was low.
Whilst enterprise organisations were more likely to have a range of wellbeing initiatives to choose
from, the difference in results for this question between mid-market and enterprise organisations was
not vast. The biggest differences were that enterprise organisations were more likely to offer gym and
health insurance subsidies and access to a wellbeing application. For SMBs, the percentages for all
wellbeing initiatives were consistently lower than their larger counterparts.
2020 proved to be the largest remote working experiment the world has ever seen. The global pandemic thrust flexible work practices into the spotlight and
many organisations were forced to adopt alternative work arrangements for the first time. Of course, flexible work encompasses more than offering work-from-
home (WFH) options. Here is a summary of results from the 2020 survey:
● Most organisations (80%) offered flexible start and finish times as a minimum
● 1 in 2 organisations offered WFH sporadically or 1-2 days per week
● 1 in 3 organisations offered compressed hours, which is an emerging trend
4 in 5 respondents offer ● Only 3% of organisations said they do not offer any form of flexible working options
flexible start / finish times ● Enterprise organisations are generally more mature in their flexible work offerings. The largest differences were their offerings relating to career breaks
(unrelated to parental leave), job sharing, purchased leave, RDOs, working from home three or more days per week and working from other locations
ELMO ran a Work From Home (WFH) Survey in June 2020, which was completed by nearly 300 HR professionals. The goal of the survey was to find out more
about WFH provisions and senior leader attitudes towards working from home both before and during COVID-19. The results of the survey revealed that, before
the pandemic, only half of organisations had senior leaders who were supportive (to some degree) of working from home, but it was mostly only available to
those who had a good enough reason to justify it. The results from the WFH Survey echo the results for this question, with only half of survey respondents
saying they offer WFH sporadically or 1-2 days per week.
In the wake of COVID-19, expectations around where and when work is undertaken have shifted. Attracting and retaining top talent who now expect formalised
working from home opportunities will become an issue for organisations who are not willing to adjust to this so-called ‘new world’. Another insight from the
WFH Survey was that 46% of respondents thought their senior leaders would be significantly more open to WFH options part-time or full-time post pandemic,
and another 32% thought their senior leaders would be slightly more open to it.
1 in 3 respondents offer
the option to purchase The benefits of flexible work are becoming increasingly apparent. This article from Forbes suggests that flexible work can provide smaller organisations with a
leave competitive edge, especially when it’s not possible to match the staff benefits of their larger rivals. It can also help organisations cope with the demands of
globalisation. Specifically, the demand for customer services across time zones and outside of 9-to-5 has driven the emergence of alternative shift patterns and
organisations with these flexible options in place will benefit. Finally, flexible work widens the available pool of talent to those unwilling or unable to work
traditional hours or commute to and from a physical workplace.
What are the top challenges for your organisation when it comes to providing flexible work options?
Getting consistency across all managers to allow flexible work options within their own team 39%
Maintaining adequate levels of communication / collaboration across remote vs. non-remote staff 37%
Operational issues related to flexible work options 35%
Negative stigma associated with working from home 29%
Reduction (perceived or actual) in productivity resulting from flexible work options 29%
Convincing top-level management of the benefits of flexible work options 28%
Measuring the use and / or success of flexible work options 27%
Creating equal opportunities for staff who want or need flexible work options 27%
Demonstrating the return on investment (ROI) of flexible work options 26%
Issues with employees misusing or abusing flexible work privileges 23%
Demonstrating tangible benefits of flexible work options (e.g. increased employee wellness or engagement) 20%
The creation of online communities and support networks for remote workers 15%
Lack of flexible work options to attract talent and / or retain staff 9%
Increasing staff awareness about their flexible work options 9%
Other 5%
None - we have no challenges 5%
I don't know 2%
n = 1202
While flexible work offers many benefits to employers and employees, it also presents a raft of challenges. The top 3 challenges are: consistency in how flexible working is
applied across the organisation, managing communication / collaboration when some staff are working remotely, and other operational issues that occur when staff are
utilising different types of flexible work options.
29% of respondents said that negative stigma about working from home is a top challenge for them, and 28% said they’ve struggled to convince senior management about
the benefits of flexible work options. It doesn’t help that 29% of respondents said they were challenged by a reduction in productivity (perceived or actual) and 23% said
that staff misusing or abusing flexible work options was a problem for them.
4 in 10 respondents said More than 1 in 3 respondents said maintaining Just over 1 in 4 respondents said a
consistency across managers adequate levels of communication between reduction in productivity (perceived
was a top challenge remote and non-remote staff was a challenge or actual) was a challenge
n = 1202
Monica
ELMO Watt
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| ELMO| CLOUD
2021 |HRUnclassified
& PAYROLLPublic
| 2018 62
Location of respondent
23%
18%
14%
10% 10%
6% 6% 5% 4% 5%
1 - 49 50 - 99 100 - 149 150 - 199 200 - 499 500 - 999 1,000 - 1,999 2,000 - 4,999 5,000 - 9,999 10,000+
SMB (1 – 199 employees) Mid-market (200 – 1999 employees) Enterprise (2000+ employees)
Level of seniority
28%
24% 26% n = 1928
19%
3%
Leadership / C-level Senior management Mid-level management Junior to mid-level (individual Other
contributor)
Industry No. Resp. Industry types (as per the ANZSIC industry list)
Professional, Scientific And Technical Services 330
Professional, Scientific And Technical Services 17%
Health Care And Social Assistance 202
Health Care And Social Assistance 10%
Not-For-Profit 187
Not-For-Profit 10%
Financial And Insurance Services 164
Financial And Insurance Services 9%
Education And Training 134 Education And Training 7%
Public Administration And Safety 126 Public Administration And Safety 7%
Information Media And Telecommunications 118 Information Media And Telecommunications 6%
Manufacturing 117 Manufacturing 6%
Construction 88 Construction 5%
Retail Trade 71 Retail Trade 4%
Transport, Postal And Warehousing 64 Transport, Postal And Warehousing 3%
Accommodation And Food Services 59 Accommodation And Food Services 3%
Electricity, Gas, Water And Waste Services 59 Electricity, Gas, Water And Waste Services 3%
Administrative And Support Services 45 Administrative And Support Services 2%
Agriculture, Forestry And Fishing 34 Agriculture, Forestry And Fishing 2%
Wholesale Trade 33 Click here to reference
Wholesale Trade 2%
Mining 32
the full ANZSIC list
Mining 2%
Rental, Hiring And Real Estate Services^ 29 Rental, Hiring And Real Estate Services 2%
Arts And Recreation Services^ 27 Arts And Recreation Services 1%
n = 1928
Other^ 9 Other 0.5%
Which of the following area(s) are you responsible for or actively involved in?
Mid-level
Responsible for: Overall Junior to mid-level Senior management Leadership / C-level
management
Monica
ELMO Watt
SOFTWARE
| ELMO| CLOUD
2021 |HRUnclassified
& PAYROLLPublic
| 2018 69
Organisational growth and decrease plans
Over the next year, do you anticipate the size of your workforce to:
26%
37% 39%
44% 44%
56% 52% 52%
45%
48% 46%
45% 44%
41% 40%
38%
29%
11% 15% 12% 15%
6% 7% 7%
Average % headcount
The average n= Industry
headcount growth growth planned
SMB Mid-market Enterprise Overall
rates cited in this (1-199) (200-1999) (2000+) average 25 Accommodation and food services 14%
table are only based
15 Administrative and support services 28%
on respondents who
said their 11 Agriculture, forestry and fishing 12%
organisation intends 6 Arts and recreation services 35%
to grow the size of 2019 2020 2019 2020 2019 2020 2019 2020
their workforce
25 Construction 19%
35 Education and training 22%
Average %
11 Electricity, gas, water and waste services 10%
headcount growth 33% 21% 21% 17% 31% 13% 28% 19% 61 Financial and insurance services 21%
planned 108 Health care and social assistance 19%
56 Information media and telecommunications 23%
n= 356 440 323 235 113 62 792 737
45 Manufacturing 14%
11 Mining 21%
82 Not for profit 14%
4 Other 30%
132 Professional, scientific and technical services 19%
36 Public administration and safety 25%
11 Rental, hiring and real estate services 14%
27 Retail trade 21%
29 Transport, postal and warehousing 23%
Note: The general rule is that, in order for responses to have statistical significance, they should have a minimum sample size of 30 respondents.
7 Wholesale trade 8%
Having said that, inferences can still be made from any data points that have less than 30 respondents and we have therefore left the data points
with less than 30 responses visible in the report for your perusal. It is only a small subset of the industry-segmented data that will have less than 30
737 Average overall growth rate 19%
respondents for specific questions.
1 to 49 440 1.9
50 to 99 262 1.9
100 to 149 182 2.6
150 to 199 111 2.8
200 to 499 334 4.4
500 to 999 182 9.3
1000 to 1999 108 16.2
2000 to 4999 91 40.2
5000 to 9999 69 54.7
10000+ 73 188.4
Which of the following stages best describes your organisation's current state
of HR & payroll technology? n = 1570+
Fully implemented Currently implementing Less than 12 months away More than 12 months away Not considering at all I don't know
n= 1570 296 402 463 408 1337 233 844 533 192
% of respondents who have HR technology Junior to Mid-level Senior C-suite SMB Mid-market Enterprise
Overall Australia New Zealand
fully implemented: mid-level management management leaders
92%
90%
respondents:
86%
84%
84%
84%
82%
78%
78%
77%
75%
73%
73%
72%
72%
69%
69%
• With fully implemented
66%
65%
technology in 2020.
59%
59%
54%
53%
51%
51%
49%
48%
48%
46%
• Who are currently
41%
41%
40%
39%
37%
35%
35%
implementing their technology.
32%
32%
27%
26%
25%
21%
18%
15%
• Who said their fully
implemented technology is less
N/A
2019 (Fully implemented) 2020 (Fully implemented) * 2021 (Projection of fully implemented) n = 1570+
Monica
ELMO Watt
SOFTWARE
| ELMO| CLOUD
2021 |HRUnclassified
& PAYROLLPublic
| 2018 77
Connection and collaboration
What connection / collaboration platform(s) is your Did your organisation implement or decide to increase
organisation currently using or implementing? investment into your connection / collaboration platform(s)
in response to COVID-19?
Microsoft Teams 77%
Zoom 58%
3%
Skype for Business 26%
22%
Yammer 15%
Slack 11% 49%
26%
Google Hangouts 8%
Other 6%
Jabber 4%
Webex Yes, we implemented this type of technology in response to COVID-19
3%
Workplace 1% Yes, we increased investment in this type of technology in response to COVID-19
SharePoint 1% No, we were already in the process of implementing or considering it prior to March 2020
Priority Level
Average n = 1448 267 375 428 377 1232 216 779 492 176
SMB Mid-market Enterprise
% of organisations placing high or medium Junior to Mid-level Senior C-suite
Overall Australia New Zealand
priority on these areas of HR: mid-level management management leaders
(1 - 199) (200 - 1999) (2000+)
Communication / collaboration platforms 69% 68% 72% 68% 67% 68% 70% 66% 70% 76%
Compliance 84% 86% 88% 85% 78% 84% 82% 81% 88% 87%
Diversity & inclusion 68% 73% 77% 63% 61% 69% 62% 61% 72% 86%
Employee wellness 87% 87% 90% 87% 84% 87% 86% 84% 90% 93%
HR reporting & analytics 68% 74% 69% 68% 62% 69% 64% 57% 79% 83%
HR technology implementation or consolidation 60% 62% 62% 61% 56% 61% 53% 53% 68% 68%
Infrastructure to better support remote working 60% 62% 67% 56% 56% 61% 56% 59% 59% 68%
Learning & development 78% 78% 75% 79% 79% 78% 81% 77% 81% 75%
Managing a remote workforce 64% 67% 69% 62% 57% 65% 56% 60% 66% 70%
Offboarding 29% 36% 33% 24% 27% 29% 30% 26% 34% 31%
Onboarding 60% 67% 60% 61% 56% 60% 63% 57% 66% 58%
Performance management 76% 74% 78% 78% 73% 76% 75% 75% 78% 73%
Recruitment 66% 69% 67% 67% 61% 66% 65% 62% 70% 69%
Remuneration / compensation & benefits 54% 54% 56% 54% 53% 53% 60% 54% 55% 55%
Rewards & recognition 58% 57% 59% 58% 58% 58% 58% 57% 59% 58%
Workforce planning 67% 65% 69% 68% 66% 68% 64% 63% 72% 73%
Workplace health & safety (WHS) 77% 77% 80% 77% 74% 77% 81% 74% 80% 86%
HR Budget
Increased from last year Same as last year Decreased from last year No budget allocated this year I don't know n = 905+
n= 1100 201 297 330 273 948 152 577 392 131
Does your organisation have budget SMB Mid-market Enterprise
Junior to Mid-level Senior C-suite
allocated to these priorities over the next 12 Overall Australia New Zealand
mid-level management management leaders
months? (1 - 199) (200 - 1999) (2000+)
Communication / collaboration platforms 67% 43% 61% 73% 84% 67% 65% 72% 65% 51%
Compliance 69% 41% 60% 79% 86% 69% 67% 73% 68% 51%
Diversity & inclusion 62% 44% 55% 68% 75% 63% 54% 63% 65% 48%
Employee wellness 74% 53% 65% 82% 87% 73% 76% 77% 75% 56%
HR reporting & analytics 65% 43% 59% 74% 78% 65% 64% 67% 67% 52%
HR technology implementation or consolidation 72% 49% 67% 83% 83% 72% 72% 73% 77% 56%
Infrastructure to better support remote working 67% 48% 61% 72% 82% 67% 68% 71% 67% 51%
Learning & development 77% 53% 70% 86% 91% 77% 76% 80% 78% 64%
Managing a remote workforce 62% 43% 55% 70% 76% 62% 61% 67% 60% 50%
Offboarding 61% 40% 53% 69% 75% 62% 54% 63% 63% 43%
Onboarding 71% 48% 63% 80% 85% 71% 66% 73% 72% 57%
Performance management 70% 47% 61% 79% 86% 70% 72% 74% 70% 52%
Recruitment 77% 52% 70% 88% 92% 77% 77% 80% 78% 63%
Remuneration / compensation & benefits 74% 50% 63% 85% 90% 74% 75% 78% 76% 55%
Rewards & recognition 73% 47% 64% 83% 88% 73% 72% 77% 74% 54%
Workforce planning 64% 41% 57% 72% 80% 65% 62% 67% 66% 48%
Workplace health & safety (WHS) 74% 47% 67% 83% 89% 74% 72% 77% 74% 57%
Compliance
High priority 27% 39% 3% 26% 5%
Priority
Budget
Increased from last year Same as last year Decreased from last year I don't know No budget allocated this year
Budget
Increased from last year Same as last year Decreased from last year I don't know No budget allocated this year
Budget
Increased from last year Same as last year Decreased from last year I don't know No budget allocated this year
Budget
Increased from last year Same as last year Decreased from last year I don't know No budget allocated this year
Budget
Increased from last year Same as last year Decreased from last year I don't know No budget allocated this year
Budget
Onboarding
High priority 32% 36% 5% 21% 6%
Priority
Increased from last year Same as last year Decreased from last year I don't know No budget allocated this year
Budget
Performance management
High priority 28% 43% 4% 16% 9%
Priority
Increased from last year Same as last year Decreased from last year I don't know No budget allocated this year
Budget
Increased from last year Same as last year Decreased from last year I don't know No budget allocated this year
Budget
Increased from last year Same as last year Decreased from last year I don't know No budget allocated this year
Budget
Increased from last year Same as last year Decreased from last year I don't know No budget allocated this year
Budget
Workforce planning
Increased from last year Same as last year Decreased from last year I don't know No budget allocated this year
Budget
Increased from last year Same as last year Decreased from last year I don't know No budget allocated this year
Budget
30%
74%
Top 3
Operations management
31%
Performance management 25%
27%
Workforce management (rostering / time & attendance) 24%
19%
Recruiting and executive search 23%
33%
Industrial / employee relations 23%
21%
Driving and managing organisational culture / behaviour 18%
21% 2020 (n = 1251)
Meeting with senior leaders / business partners 16%
12% 2019 (n = 1053)
Onboarding / induction 16%
23%
Offboarding / standing down 11%
N/A
Other 10%
7%
Employee engagement 10%
8%
Learning & development (L&D) 9%
7%
Developing HR strategy 8%
N/A
Employee wellness 6%
N/A
Please select the top three areas that you believe to be SMB Mid-market Enterprise
Junior to Mid-level Senior C-suite
taking up too much of HR's time in your organisation, Overall Australia New Zealand
Mid-level management management leaders
relative to the value they deliver: (1 - 199) (200 - 1999) (2000+)
Developing HR strategy 8% 8% 12% 6% 8% 8% 13% 9% 6% 9%
Driving and managing organisational culture / behaviour 18% 23% 18% 20% 14% 18% 21% 18% 19% 17%
Employee engagement 10% 8% 9% 11% 9% 10% 10% 11% 7% 10%
Employee wellness 6% 4% 7% 5% 6% 6% 4% 6% 5% 6%
General admin work 71% 76% 69% 72% 70% 72% 69% 70% 74% 69%
Industrial / employee relations 23% 16% 23% 24% 26% 22% 26% 19% 27% 29%
Learning & development (L&D) 9% 9% 7% 7% 11% 9% 5% 10% 7% 5%
Meeting with senior leaders / business partners 16% 19% 18% 17% 12% 17% 15% 16% 14% 24%
Offboarding / standing down 11% 14% 11% 10% 12% 11% 12% 9% 13% 15%
Onboarding / induction 16% 19% 17% 16% 14% 16% 17% 16% 18% 12%
Operations management 30% 29% 23% 33% 34% 30% 26% 31% 29% 28%
Performance management 25% 21% 24% 26% 26% 24% 26% 23% 25% 31%
Recruiting and executive search 23% 22% 25% 23% 23% 23% 24% 26% 23% 13%
Workforce management (rostering / time & attendance) 24% 19% 25% 22% 27% 24% 22% 22% 25% 25%
Please select the top three items that you believe will challenge your organisation over the next 12 months:
Please select the top three items that you SMB Mid-market Enterprise
Junior to Mid-level Senior C-suite
believe will challenge your organisation over Overall Australia New Zealand
mid-level management management leaders
the next 12 months: (1 - 199) (200 - 1999) (2000+)
Automating administrative tasks 19% 16% 17% 21% 22% 20% 14% 21% 19% 15%
Boosting productivity 16% 7% 14% 18% 21% 15% 24% 20% 11% 11%
Change management 22% 23% 21% 21% 23% 21% 24% 20% 25% 19%
Cultural change 22% 21% 21% 23% 23% 22% 21% 21% 22% 23%
Diversity & inclusion 6% 9% 7% 3% 6% 6% 6% 5% 6% 11%
Employee wellness 17% 19% 19% 19% 12% 17% 17% 16% 17% 23%
High employee turnover 11% 13% 12% 12% 9% 12% 10% 9% 13% 17%
Increase in remote working 23% 23% 28% 20% 22% 24% 20% 23% 22% 28%
Lack of resources 20% 16% 21% 21% 20% 19% 22% 20% 18% 25%
Leadership development 26% 22% 25% 31% 24% 26% 23% 26% 28% 20%
Low employee engagement 16% 24% 19% 15% 11% 17% 13% 15% 16% 21%
Offboarding / standing down 3% 3% 3% 3% 1% 3% 3% 3% 3% 1%
Performance management 12% 12% 13% 12% 12% 12% 14% 12% 14% 8%
Rapid growth 12% 12% 9% 11% 17% 13% 9% 13% 13% 4%
Recruitment 13% 10% 12% 14% 13% 12% 18% 14% 10% 13%
Succession planning 13% 14% 13% 14% 11% 14% 8% 13% 13% 10%
Upgrading technology 20% 25% 18% 18% 21% 20% 21% 19% 22% 20%
Upskilling, cross-skilling or Reskilling employees 26% 29% 25% 24% 29% 26% 26% 26% 27% 26%
Which skill(s) are you aiming to develop for Junior to Mid-level Senior C-suite SMB Mid-market Enterprise
Overall Australia New Zealand
yourself in the next 12 months? mid-level management management leaders
(1 - 199) (200 - 1999) (2000+)
Budget management 16% 12% 16% 17% 19% 17% 14% 20% 12% 12%
Change management 32% 34% 38% 30% 26% 31% 33% 30% 32% 36%
Communication and employee relations 25% 42% 27% 18% 17% 24% 28% 26% 24% 21%
Conflict management 20% 32% 25% 16% 13% 20% 23% 22% 18% 21%
General business knowledge and skills 28% 38% 29% 22% 26% 28% 30% 29% 27% 25%
HR reporting & analytics 39% 48% 41% 40% 29% 41% 29% 37% 44% 34%
Managing employee wellness 32% 34% 35% 33% 29% 33% 32% 36% 31% 22%
Negotiation skills 17% 27% 19% 12% 12% 17% 13% 16% 17% 19%
Organisational development 32% 32% 35% 30% 30% 31% 33% 32% 32% 30%
Policy / procedure creation 19% 29% 19% 15% 16% 19% 19% 22% 16% 13%
Policy / procedure enforcement 16% 23% 17% 14% 13% 16% 16% 20% 12% 9%
Problem solving 13% 27% 17% 7% 7% 13% 14% 13% 12% 18%
Program development and implementation 19% 29% 23% 14% 14% 19% 18% 19% 19% 18%
Remote workforce management 26% 22% 27% 29% 27% 27% 24% 28% 26% 23%
Risk assessment and mitigation 20% 15% 20% 20% 23% 20% 20% 23% 15% 16%
Strategic planning 41% 34% 43% 43% 42% 42% 38% 42% 43% 35%
Workforce planning and job analysis 29% 30% 33% 28% 25% 30% 22% 28% 31% 27%
None - I don't intend to develop new skills 3% 1% 3% 3% 6% 3% 3% 4% 2% 3%
What type of flexible working options does your Junior to Mid-level Senior C-suite SMB Mid-market Enterprise
Overall Australia New Zealand
organisation offer? mid-level management management leaders
(1 - 199) (200 - 1999) (2000+)
Career breaks (unrelated to parental leave) 25% 24% 26% 26% 22% 26% 17% 18% 28% 46%
Compressed days 35% 34% 36% 36% 34% 35% 34% 29% 42% 43%
Flexible start / finish times 80% 76% 79% 80% 85% 80% 82% 79% 82% 86%
Job sharing 29% 29% 29% 30% 27% 30% 19% 21% 32% 56%
Leave without pay 70% 68% 69% 72% 69% 70% 66% 62% 80% 76%
Our organisation doesn't offer flexible working options 3% 2% 4% 3% 2% 3% 4% 4% 2% 1%
Parental leave (above statutory requirements) 41% 42% 46% 38% 39% 44% 22% 32% 50% 61%
Part-time work 72% 73% 69% 74% 72% 72% 68% 66% 79% 75%
Purchased leave 29% 36% 32% 28% 22% 30% 19% 18% 37% 55%
Rostered days off (RDO) 26% 28% 28% 25% 24% 27% 19% 18% 33% 42%
Swapping workdays (if part-time) 39% 33% 39% 41% 41% 41% 25% 39% 37% 44%
Time-in-lieu 57% 50% 59% 60% 56% 58% 48% 51% 64% 60%
Work from home 1-2 days a week 49% 47% 47% 54% 46% 49% 48% 46% 54% 49%
Work from home 3 or more days a week 39% 37% 38% 40% 41% 41% 32% 36% 40% 53%
Work from home sporadically 50% 47% 50% 53% 48% 50% 51% 44% 56% 61%
Working from other locations 41% 41% 38% 42% 44% 41% 42% 35% 46% 56%
I don't know 0% 0% 1% 0% 0% 0% 1% 0% 0% 1%
Saturation map scale:
Lowest Highest
value value
What are the top challenges for your organisation when it comes to providing flexible work options?
Getting consistency across all managers to allow flexible work options within their own team 39%
Maintaining adequate levels of communication / collaboration across remote vs. non-remote staff 37%
Operational issues related to flexible work options 35%
Negative stigma associated with working from home 29%
Reduction (perceived or actual) in productivity resulting from flexible work options 29%
Convincing top-level management of the benefits of flexible work options 28%
Measuring the use and / or success of flexible work options 27%
Creating equal opportunities for staff who want or need flexible work options 27%
Demonstrating the return on investment (ROI) of flexible work options 26%
Issues with employees misusing or abusing flexible work privileges 23%
Demonstrating tangible benefits of flexible work options (e.g. increased employee wellness or engagement) 20%
The creation of online communities and support networks for remote workers 15%
Lack of flexible work options to attract talent and / or retain staff 9%
Increasing staff awareness about their flexible work options 9%
None - we have no challenges 5%
I don't know 2% n = 1202
Convincing top-level management of the benefits of flexible work options 28% 31% 32% 30% 22% 28% 29% 26% 31% 32%
Creating equal opportunities for staff who want or need flexible work options 27% 29% 32% 25% 21% 26% 28% 24% 28% 34%
Demonstrating tangible benefits of flexible work options (e.g. increased employee wellness or
20% 15% 24% 24% 17% 20% 21% 17% 23% 28%
engagement)
Demonstrating the return on investment (ROI) of flexible work options 26% 24% 26% 26% 26% 26% 23% 22% 28% 33%
Getting consistency across all managers to allow flexible work options within their own team 39% 47% 43% 39% 30% 39% 42% 29% 47% 64%
Increasing staff awareness about their flexible work options 9% 14% 9% 6% 7% 9% 7% 6% 11% 14%
Issues with employees misusing or abusing flexible work privileges 23% 21% 26% 21% 23% 23% 20% 24% 21% 23%
Lack of flexible work options to attract talent and / or retain staff 9% 12% 12% 9% 6% 9% 9% 8% 11% 12%
Maintaining adequate levels of communication / collaboration across remote vs. non-remote
37% 37% 41% 35% 36% 37% 40% 38% 36% 38%
staff
Measuring the use and / or success of flexible work options 27% 19% 30% 30% 26% 27% 28% 26% 28% 30%
Negative stigma associated with working from home 29% 35% 36% 26% 23% 29% 31% 25% 33% 37%
Operational issues related to flexible work options 35% 30% 36% 39% 31% 34% 36% 31% 39% 37%
Reduction (perceived or actual) in productivity resulting from flexible work options 29% 25% 32% 30% 29% 30% 25% 27% 31% 32%
The creation of online communities and support networks for remote workers 15% 14% 17% 15% 15% 16% 9% 13% 17% 22%
None - we have no challenges 5% 2% 3% 4% 10% 5% 2% 8% 2% 1%
I don't know 2% 3% 2% 0% 2% 1% 3% 2% 1% 2%
Access to a wellbeing application 24% 28% 22% 20% 26% 25% 17% 19% 26% 40%
Employee assistance programs 76% 83% 81% 77% 67% 76% 76% 65% 88% 94%
Gym memberships / subsidies 24% 29% 28% 24% 17% 24% 20% 18% 27% 42%
Health insurance coverage / subsidies 23% 28% 24% 21% 20% 20% 43% 13% 30% 45%
Mental health day(s) / programs 24% 26% 22% 23% 26% 25% 18% 21% 26% 32%
Yoga / meditation 17% 18% 20% 15% 17% 18% 14% 13% 21% 24%
None - we have no wellbeing initiatives 11% 10% 7% 12% 14% 11% 10% 17% 4% 1%
I don't know 1% 1% 1% 1% 2% 1% 2% 2% 0% 1%
Which metric(s) does your organisation use to measure the overall performance of your HR department?
How would you describe your organisation's skill level using HR metrics?
None: We don't use HR metrics at all
4% 5%
Basic: We have some basic HR metrics but 11% 12% 13%
19% 20%
they don't factor heavily into business 28%
decisions
37% 36%
40%
Developing: We track HR metrics and leverage 43% 41%
these metrics for decision-making purposes 44% 42%
42%
I don't know n = 418 n = 622 n = 425 n = 409 n = 163 n = 133 n = 1006 n = 1164
SMBSMB
(1 - 199) Mid-Market
Mid-market (200 - 1999) Enterprise
Enterprise (2000+) Overall
Overall
(1 - 199) (200 - 1999) (2000 +)
None: We don't use HR metrics at all 20% 19% 17% 21% 22% 19% 26% 28% 12% 5%
Recruitment 43%
52%
Workplace health & safety (WHS) 42%
51%
Learning & development 40%
39%
Performance management 39%
43%
Organisational culture 34%
37%
Diversity & inclusion 31%
25%
Employee wellness 30%
22%
Payroll 28%
30%
Onboarding 26% 2020 (n = 863)
26%
Remuneration / compensation & benefits 25% 2019 (n = 803)
36%
Industrial / employee relations 22%
23%
Communication / collaboration 19%
N/A
Rostering / time & attendance 19%
20%
Rewards & recognition 18%
23%
Succession management 8%
11%
None - we don't measure the performance of any areas of our organisation 8%
N/A
I don't know 5%
6%
Organisational design 4%
6%
Which of the following areas does your Junior to Mid-level Senior C-suite SMB Mid-market Enterprise
Overall Australia New Zealand
organisation measure the performance of? mid-level management management leaders
(1 - 199) (200 - 1999) (2000+)
Communication / collaboration 19% 15% 21% 18% 21% 20% 13% 20% 17% 21%
Diversity & inclusion 31% 33% 35% 30% 28% 32% 26% 22% 35% 55%
Employee wellness 30% 26% 30% 30% 30% 29% 33% 30% 29% 28%
Industrial / employee relations 22% 23% 20% 22% 22% 22% 21% 15% 25% 36%
Learning & development 40% 40% 37% 39% 43% 39% 41% 41% 40% 35%
Onboarding 26% 28% 25% 27% 24% 27% 18% 27% 26% 23%
Organisational culture 34% 30% 32% 34% 38% 34% 35% 32% 37% 32%
Organisational design 4% 7% 3% 4% 5% 5% 3% 4% 4% 6%
Payroll 28% 28% 22% 32% 29% 27% 31% 27% 27% 32%
Performance management 39% 39% 32% 40% 43% 38% 42% 42% 38% 29%
Recruitment 43% 45% 39% 46% 41% 43% 41% 36% 49% 50%
Remuneration / compensation & benefits 25% 23% 20% 30% 27% 25% 29% 24% 28% 24%
Rewards & recognition 18% 22% 17% 16% 18% 18% 18% 19% 17% 18%
Rostering / time & attendance 19% 14% 17% 22% 21% 19% 20% 19% 18% 23%
Succession management 8% 7% 7% 6% 10% 8% 8% 6% 8% 13%
Workplace health & safety (WHS) 42% 43% 42% 43% 41% 41% 51% 40% 45% 45%
None - we don't measure the performance of
8% 5% 7% 7% 11% 7% 10% 9% 7% 3%
any areas of our organisation
I don't know 5% 13% 6% 2% 2% 5% 5% 3% 5% 11%
Which tool(s) does your organisation currently use to gather and report on HR metrics?
62%
Employee survey feedback
62%
59%
Manual processes (e.g. paper-based processes or use of spreadsheets)
61%
26%
Integrated HRIS platform
27%
19%
Stand-alone HR technology platform
18%
18% 2020 (n = 858)
System developed in-house
21%
2019 (n = 796)
17%
Third-party reporting tool(s) / analytics platform(s)
17%
15%
Third-party aggregator (e.g. LinkedIn, Seek or review sites)
16%
7%
Enterprise resource planning (ERP) platform(s)
7%
4%
None - we have no tool
3%
3%
I don't know
2%
Employee survey feedback 62% 59% 62% 61% 66% 63% 61% 56% 69% 66%
Enterprise resource planning (ERP)
7% 7% 7% 4% 11% 7% 6% 6% 7% 10%
platform(s)
Integrated HRIS platform 26% 28% 30% 23% 22% 27% 15% 18% 31% 36%
Manual processes (e.g. paper-based
59% 61% 52% 66% 58% 59% 61% 58% 66% 45%
processes or use of spreadsheets)
Stand-alone HR technology platform 19% 22% 16% 19% 21% 20% 17% 19% 21% 16%
System developed in-house 18% 14% 20% 16% 22% 18% 20% 15% 17% 32%
Third-party aggregator (e.g. LinkedIn, Seek or
15% 12% 13% 16% 17% 15% 10% 13% 17% 17%
review sites)
Third-party reporting tool(s) / analytics
17% 17% 18% 15% 18% 17% 19% 16% 17% 23%
platform(s)
None - we have no tool 4% 4% 4% 4% 4% 4% 3% 6% 2% 2%
I don't know 3% 7% 4% 2% 1% 3% 7% 2% 3% 9%
56%
Identifying quantifiable links between HR and business goals 47%
What are the top five challenges you have faced / are SMB Mid-market Enterprise
Junior to Mid-level Senior C-suite
facing when trying to implement HR metrics within Overall Australia New Zealand
mid-level management management leaders
your organisation? (1 - 199) (200 - 1999) (2000+)
Assigning accountability for metrics 35% 39% 34% 34% 37% 36% 34% 35% 35% 37%
Identifying quantifiable links between HR and
56% 50% 61% 57% 53% 56% 55% 54% 57% 55%
business goals
Identifying value-add HR metrics 54% 48% 53% 58% 55% 54% 56% 53% 57% 50%
Interpreting HR measurement with corporate
41% 38% 44% 43% 38% 41% 41% 37% 41% 54%
measurement
Lack of skills among HR staff 31% 27% 31% 31% 35% 33% 21% 28% 32% 44%
Lack of technological infrastructure 55% 55% 49% 63% 54% 56% 48% 52% 60% 51%
Linking incentives with HR metrics 32% 30% 32% 30% 36% 32% 32% 36% 30% 21%
Making metrics information available 35% 34% 36% 31% 39% 35% 38% 31% 39% 36%
Obtaining raw data 42% 36% 39% 46% 44% 42% 42% 41% 45% 36%
Subjectivity of HR measurement 42% 34% 38% 46% 46% 41% 46% 46% 37% 43%
5% 5% 3% 3% 5% 5%
8% 12%
11%
30% 29%
21% 35%
41%
48%
53%
81%
67% 69% 67%
61%
54%
48%
42%
81%
Engagement surveys
85%
65%
Exit surveys
66%
53%
Pulse surveys
43%
40%
One-on-one meetings with employees 2020 (n = 600)
35%
30% 2019 (n = 578)
Onboarding surveys
27%
18%
Employee Net Promoter Score (eNPS®)
16%
9%
Stay surveys
8%
0%
I don't know
1%
Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.
Pulse surveys 53% 58% 54% 47% 57% 53% 55% 46% 57% 61%
Engagement surveys 81% 79% 80% 85% 80% 82% 79% 77% 86% 80%
Onboarding surveys 30% 35% 28% 27% 34% 31% 24% 32% 29% 29%
Exit surveys 65% 67% 66% 62% 66% 66% 59% 68% 68% 47%
One-on-one meetings with employees 40% 35% 37% 38% 48% 40% 42% 54% 31% 29%
Employee Net Promoter Score (eNPS®) 18% 15% 12% 19% 23% 17% 22% 18% 20% 13%
I don't know 0% 1% 0% 0% 0% 0% 1% 0% 0% 0%
Why doesn't your organisation have any formal processes in place to measure employee engagement?
24%
We don't feel the need for a formal process given the size of our organisation
14%
23%
We don't have buy-in from senior leadership (e.g. C-level, Directors)
26%
21%
Too busy to implement / no resources
25%
19%
We don't have the budget
21%
We don't have the budget 19% 22% 26% 17% 14% 19% 16% 18% 19% 31%
Too busy to implement / no resources 21% 22% 27% 18% 20% 22% 16% 18% 27% 31%
Thinking about the entire HR function, how does your organisation manage its employee data?
49%
Spreadsheets
53%
44%
Stand-alone payroll system
42%
29%
Integrated HR & payroll system
32% 2020 (n = 1099)
2019 (n = 934)
19%
Integrated HR system (excluding payroll)
17%
12%
Multiple stand-alone, best-of-breed HR systems
14%
3%
I don't know
3%
Spreadsheets 49% 45% 46% 51% 52% 49% 48% 49% 53% 33%
Integrated HR system (excluding payroll) 19% 26% 21% 14% 19% 19% 19% 15% 23% 28%
Integrated HR & payroll system 29% 34% 33% 31% 21% 30% 23% 24% 33% 44%
Stand-alone payroll system 44% 38% 39% 47% 51% 43% 53% 49% 41% 28%
I don't know 3% 5% 4% 1% 3% 3% 6% 3% 2% 8%
Monica
ELMO Watt
SOFTWARE
| ELMO| CLOUD
2021 |HRUnclassified
& PAYROLLPublic
| 2018 119
Recruitment as a priority
75%
66%
52%
39%
2019 2020
% who said recruitment was a hght or medium priority for their organisation
% intending to increase workforce
Summary:
Compared to results from the 2019 survey, there was a significant reduction in the priority given to recruitment because fewer organisations intended to grow their workforce. In 2019, three-
quarters of respondents (75%) said recruitment was a high or medium priority for their organisation, in comparison to only two thirds of respondents (66%) in 2020.
Insight:
When analysed in conjunction with the question about organisations’ intentions to increase the size of their workforces, it is clear how extensively COVID-19 hindered workforce expansion
across Australia and New Zealand.
Action:
● Regardless of whether hiring was frozen, continued with few changes, or escalated in 2020, employers have been dealing with a new, uncharted business environment. Time should
be taken to align workforce planning strategies with the broader business plans. As these business plans will constantly be course-correcting to deal with the aftershocks of COVID-19,
any workforce strategies must also be adaptable.
The results for this question indicate that respondents found all recruitment-related issues / activities less challenging in 2020 than they did in 2019. The order in which the challenges were ranked
remained the same. Several developments are worthy of mention. Firstly, those selecting ‘manual or inefficient recruitment processes’ as a challenge dropped by 10 percentage points from 2019.
Secondly, roughly one third of respondents said they were challenged by ‘building their employer brand’ and one fifth said they were challenged by ‘creating a positive candidate experience’. These
challenges speak to how important it is to engage with and inspire candidates. It indicates that having a compelling brand is important in attracting top talent.
Insight:
These are two reasons why respondents were less challenged by recruitment-specific issues and activities in 2020 than they were in 2019:
1. An increase in fully implemented technology – In 2020, two thirds of respondents had fully implemented recruitment technology, in comparison to only half of the respondents back in 2019.
The increased uptake of technology was evident across all organisations, regardless of size, and it significantly reduced challenges relating to manual or inefficient recruitment processes.
2. When less recruitment is happening, naturally there are fewer challenges – Manual and inefficient processes can be improved, whereas challenges such as ‘skills shortage’, ‘competition for
talent’ and ‘slow decision making / too many stakeholders’ are more complex and may require different participants to resolve them. One hypothesis is that recruitment was less of a priority
across Australia and New Zealand in general, and therefore fewer of these challenges were encountered at the time the survey was conducted.
The percentage of respondents focused on ‘building a stronger employer brand’ and ‘creating a positive candidate experience’ did not change significantly from 2019. Awareness about the importance
of the employer brand and the critical need to manage it has been growing in recent years. This has been evident with the rise of employer review websites like Glassdoor.
In an unexpected way, COVID-19 presented employers with an opportunity to shine by demonstrating their values and concern for employee wellbeing. Indeed, HR observer Josh Bersin stated the
pandemic was “the best thing that ever happened to employee engagement” and his research indicated that “companies are looking after their employees better than ever”.
Employers may have damaged their employer brand in 2020 if they did not demonstrate care for their employees’ wellbeing, or if they made certain drastic changes to their workforce, such as job cuts
and pay cuts, without considering the message it sent to their wider organisation and the talent market in general. This will be felt as the economy recovers and disengaged employees begin to leave.
On the other hand, many organisations already have a respected employer brand and well-defined employee value proposition (EVP), but are keen to enhance their brand further.
Action:
● Capitalise on a buoyant candidate market. Streamlining recruitment processes through the use of technology can enhance the candidate experience and increase the time available to focus on
more strategic initiatives such as employer branding and value propositions.
● Prioritising your employer brand will help to attract top talent during the recovery phase. Your EVP forms the foundation of your brand and should be emphasised at every touchpoint a candidate
has with your organisation. Your employer brand should also reflect the core values and purpose of your organisation.
Summary:
The 2020 results show a significant decline in New Zealand respondents citing ‘competition for talent’ and ‘skills shortage’ as key challenges. In the 2019 report, the results showed it was much
tougher to recruit top talent and skills in New Zealand compared with Australia: Back in 2019, 2 in 3 New Zealand respondents cited these as top challenges in comparison to only 1 in 2 Australian
respondents. In 2020, New Zealand and Australian respondents were on par, with 1 in 2 respondents from each country citing the competition for talent and a skills shortage as key challenges.
Insight:
There have been fundamental changes in the talent market since the COVID-19 pandemic and the associated economic downturn hit. Compared with 12 months ago, there are more candidates
than jobs for many roles. It stands to reason that ‘competition for talent’ and ‘skills shortage’ would slip down the list of challenges. The New Zealand results reflect an additional shift in the talent
market in New Zealand. In November 2020, a survey conducted across thousands of New Zealand expats found that up to half a million New Zealanders will return to New Zealand as a result of
the COVID-19 pandemic, creating an influx of skilled candidates looking for jobs. “Currently, more of our skilled population live offshore than any other OECD country,” one expert commented.
Action:
● Regardless of your geographic location, position your organisation so that it is attractive to external candidates. Review the existing candidate experience and make adjustments so that
recruitment is seamless and fast, without cutting corners or jeopardising quality of hire.
● Review existing recruitment processes and re-assess your business strategy to ensure there is alignment between your strategic business plans and workforce planning (including talent
acquisition).
Creating a positive candidate experience 19% 20% 21% 18% 18% 19% 17% 14% 22% 40%
Building a stronger employer brand 31% 34% 32% 27% 33% 32% 24% 30% 33% 31%
A manual or inefficient recruitment process 25% 31% 27% 26% 20% 25% 27% 22% 28% 39%
Reducing the time to hire 25% 24% 33% 19% 26% 25% 27% 22% 26% 44%
Competition for talent 47% 47% 46% 48% 48% 47% 47% 44% 52% 53%
Skills shortage 42% 34% 42% 44% 42% 41% 49% 43% 40% 43%
Slow decision making / too many stakeholders 27% 34% 39% 24% 16% 27% 24% 23% 27% 50%
Lack of HR resources 17% 20% 19% 14% 17% 18% 11% 15% 19% 18%
I don't know 1% 4% 1% 1% 1% 1% 1% 1% 1% 3%
Has fully implemented technology Does not have fully implemented technology
Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
What are your organisation's key recruitment challenges?
n = 600 n = 319 n = 229 n = 52 n = 308 n = 205 n = 83 n = 20
Creating a positive candidate experience 18% 14% 19% 37% 20% 14% 30% 50%
Building a stronger employer brand 31% 32% 31% 29% 30% 26% 37% 35%
A manual or inefficient recruitment process 18% 17% 17% 27% 40% 30% 58% 70%
Reducing the time to hire 26% 23% 25% 44% 24% 20% 27% 45%
Competition for talent 50% 47% 53% 52% 43% 39% 49% 55%
Skills shortage 43% 43% 41% 50% 39% 41% 36% 25%
Slow decision making / too many stakeholders 28% 25% 28% 50% 23% 20% 24% 50%
Lack of HR resources 16% 14% 19% 13% 19% 18% 19% 30%
Which tool(s) does your organisation use to improve the recruitment process?
32%
None - we don't use any tools, we manage recruitment manually in-house
38%
30%
Applicant tracking software (ATS)
28%
30%
Psychometric assessment
27%
26%
Background screening tools
24% 2020 (n = 846)
22% 2019 (n = 684)
Video interviewing platform
16%
13%
Contract generation software
14%
6%
None - we don't use any tools, we use third-party agencies / recruitment firms
7%
2%
I don't know
2%
2019 2020
Summary:
In comparison to 2019, there were two significant changes relating to the tools used to manage recruitment: the increase in the percentage of organisations using video interviewing platforms (from
16% in 2019 to 22% in 2020); and the decrease in the percentage of organisations only using manual in-house processes to manage their recruitment activities (from 38% in 2019 to 32% in 2020).
Insight:
A mix of foreseen and unforeseen forces shaped responses to this question. An example of the former is the growing trend towards automation of recruitment tasks, which tech expert Josh Bersin
has identified as being the HR area most prone to AI-driven disruption. An example of the latter was, of course, the global pandemic. This impacted recruitment in unexpected ways, such as the
widespread adoption of video interviewing platforms. These became necessary due to social distancing.
It’s also interesting to note subtle differences in responses based on organisation size. For example, while many enterprise organisations moved all their recruitment in-house some time ago to
reduce costs, it’s only now that mid-market organisations have started following their lead, as they’ve become more capable and self-sufficient when it comes to recruitment. The most noticeable
shift for mid-market respondents was the increased use of applicant tracking software (ATS). In 2020, nearly half of mid-market respondents had ATS in comparison to only one third in 2019. The
decrease in the percentage of organisations only using manual in-house processes to manage their recruitment activities is also perhaps further evidence of the decline in use of third-party
agencies and recruitment firms. In 2020, only 1% of mid-market respondents said they used third-party agencies or recruiters, in comparison to 5% in 2019.
Action:
● Assess how technology can help the recruitment function. There has recently been an increase in the functionality and capability of recruitment technology tools, to cover not just the
fundamentals of talent attraction and selection, but also adjacent areas such as internal mobility and career management. Reporting tools have also improved with the rise of predictive
analytics. So, investigate which solutions are best suited to meet the talent acquisition requirements of your organisation.
● Refresh your interview guides and templates to ensure they accommodate a more virtual experience for candidates. Consider including additional stages to build rapport and social
connections in addition to the regular interview stages to accommodate for in-person time that may be lacking from virtual interviews.
Applicant tracking software (ATS) 30% 38% 27% 29% 29% 29% 36% 19% 43% 54%
Background screening tools 26% 33% 31% 21% 23% 26% 20% 20% 31% 47%
Contract generation software 13% 16% 11% 10% 16% 13% 8% 8% 19% 21%
Psychometric assessment 30% 29% 32% 30% 29% 30% 28% 25% 33% 51%
Video interviewing platform 22% 23% 24% 20% 22% 22% 18% 18% 25% 37%
I don't know 2% 3% 2% 2% 1% 2% 2% 2% 1% 6%
Which tool(s) does your organisation use to Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
improve the recruitment process?
n = 556 n = 300 n = 204 n = 52 n = 290 n = 194 n = 78 n = 18
Applicant tracking software (ATS) 40% 28% 51% 60% 11% 5% 19% 39%
Background screening tools 30% 24% 36% 46% 17% 13% 17% 50%
Psychometric assessment 33% 29% 34% 52% 23% 19% 29% 50%
Video interviewing platform 26% 22% 27% 46% 13% 11% 18% 11%
Which metric(s) does your organisation use to measure the performance of its recruitment processes?
Summary:
Overall, there was a regression in the use of metrics to measure the performance of recruitment processes for
organisations of all sizes. Over a third of respondents (38%) do not use any metrics at all, an increase of 7 percentage
points from 2019.
Insight:
The decline in the use of recruitment metrics is noteworthy because there was a significant increase in the use of
2 in 10 respondents do not use any metrics recruitment technology between 2019 and 2020. Those who utilised technology also used a larger variety of metrics, so the
to measure the performance of their question must be asked: why aren’t more HR teams using at least one metric to measure the efficiency and / or
recruitment process effectiveness of their recruitment processes? It’s also worth noting that the most common metric used to measure
recruitment process effectiveness was ‘overall employee turnover’, which does not accurately reflect the quality or
efficiency of recruitment processes. For example, it’s unlikely that the turnover of an employee with 10 years of service
accurately reflects the quality of the process that was used when they were recruited. This indicates that many HR
professionals may still be unsure what metrics they should be using to evaluate their recruitment processes.
‘Turnover rate of new hires’ is a valuable metric that all organisations can use. A lot of time and money is spent getting a
new hire on board. If the new hire does not stay long, this directly impacts bottom line costs. ‘Turnover rate of new hires’
can also be broken down further into voluntary and non-voluntary categories to create metrics that indicate an issue with
the new starter experience or with the quality of their hiring process.
Action:
2 in 5 respondents do not use any tools
to improve their recruitment process and ● Determine the metrics that are most valuable to assess recruitment processes. Effective measurement doesn’t need
they manage it manually in-house to rely on a single metric: consider identifying different metrics for candidate sourcing, interview effectiveness and
efficiency, new hire productivity and engagement.
● Access technology to help collate and analyse the metrics that matter.
Cost to hire 20% 19% 20% 20% 20% 20% 19% 17% 23% 30%
Number of employee referrals 15% 13% 8% 18% 17% 15% 11% 12% 18% 21%
Offer acceptance rate 14% 11% 9% 16% 17% 14% 13% 11% 14% 34%
Overall employee turnover rate 34% 28% 31% 37% 35% 35% 29% 30% 41% 37%
Time to hire 30% 32% 27% 29% 32% 30% 29% 22% 38% 46%
Turnover rate of new hires (in their first year) 27% 25% 26% 27% 30% 28% 25% 24% 32% 36%
None - we don't use any metrics 38% 29% 41% 38% 41% 38% 39% 45% 32% 16%
Which metric(s) does your organisation use Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
to measure the performance of its
recruitment processes? n = 549 n = 298 n = 201 n = 50 n = 290 n = 194 n = 78 n = 18
Cost to hire 24% 21% 26% 32% 13% 11% 15% 28%
Overall employee turnover rate 36% 33% 39% 40% 31% 26% 44% 33%
Time to hire 35% 28% 42% 46% 21% 15% 28% 50%
Turnover rate of new hires (in their first
30% 27% 33% 36% 23% 19% 29% 39%
year)
None - we don't use any metrics 36% 43% 30% 18% 43% 49% 36% 11%
76%
Job boards
83%
68%
Social media channels (e.g. LinkedIn, Facebook)
68%
65%
Employee referrals
68%
2020 (n = 834)
57%
Internal talent / succession program
57% 2019 (n = 681)
53%
External recruiters
60%
17%
Established external talent pool
17%
13%
Career fairs
16%
Summary:
Between 2019 and 2020, there was a decrease in the use of more traditional channels used to source candidates such
as job boards (e.g. Seek), external recruiters and career fairs. However, job boards remained the top channel used,
followed by social media and employee referrals.
Insight:
Why is the use of job boards declining? It may be that this channel is not always the most efficient use of a recruiter’s
time. Wading through an influx of irrelevant resumes from a job post can take many hours, whereas proactively
seeking out suitable candidates and utilising targeted social media posts and employee referrals tends to create
1 in 2 mid-level and senior management
better quality candidate pools. The reduced use of job boards may also reflect the changing dynamics of candidate
respondents and 3 in 10 C-suite leaders do not
sourcing. Social media, individual networks and prospecting efforts are now used more often to reach candidates
know the turnover rate for new hires within their
before they begin actively searching for roles.
probation period
Whilst very few SMB or mid-market respondents said they use career fairs to source candidates, 40% of enterprise
respondents said they still use them. In addition, enterprise respondents were more likely to source candidates
through a pre-established external talent pool.
Action:
● Review the effectiveness of the channels you use to find new hires. Some metrics to consider are channel
cost per hire, the time taken to hire through each channel, and the overall hiring quality achieved through
each channel.
● Ensure that any social media presence you have enables candidates to understand your brand and EVP. It
may be their first introduction to your organisation or a touchpoint in their research. Regardless, it will be an
important avenue to engage with and attract fresh talent.
External recruiters 53% 52% 58% 54% 49% 52% 60% 54% 50% 65%
Employee referrals 65% 62% 64% 66% 64% 65% 59% 65% 64% 63%
Job boards 76% 82% 76% 76% 74% 77% 68% 70% 84% 88%
Internal talent / succession program 57% 61% 51% 63% 52% 57% 57% 48% 68% 72%
Established external talent pool 17% 16% 12% 16% 22% 18% 10% 17% 13% 29%
Career fairs 13% 13% 14% 14% 11% 13% 10% 7% 17% 40%
Social media channels (e.g. LinkedIn, Facebook) 68% 75% 61% 70% 68% 68% 71% 64% 72% 78%
How would you rank the effectiveness of each channel in finding the most suitable candidate?
Social media channels (e.g. LinkedIn, Facebook) (n = 562) 11% 53% 30% 6%
Which source(s) does your organisation use to find Junior to Mid-level Senior C-suite SMB Mid-market Enterprise
Overall Australia New Zealand
a new hire? mid-level management management leaders
(1 - 199) (200 - 1999) (2000+)
External recruiters 73% 73% 76% 70% 74% 74% 67% 72% 74% 77%
Employee referrals 73% 74% 70% 77% 72% 75% 63% 73% 74% 70%
Job boards 74% 72% 77% 74% 71% 75% 67% 70% 81% 67%
Internal talent / succession programs 76% 82% 72% 71% 82% 76% 75% 77% 74% 76%
Established external talent pools 72% 63% 82% 67% 75% 72% 73% 73% 70% 70%
Career fairs 42% 63% 50% 36% 32% 45% 18% 47% 40% 41%
Social media channels (e.g. LinkedIn, Facebook) 63% 63% 68% 61% 63% 65% 54% 60% 69% 64%
Other source 75% 89% 57% 88% 69% 70% 91% 79% 60% 67%
Overall, how would you rate your organisation's internal systems and processes for efficiently and effectively
managing recruitment ?
Excellent 13%
Good 36%
Average 37%
Poor 9%
Very poor 4%
I don't know 1%
n = 737
Summary:
In terms of judging internal systems and processes, 60% of respondents with fully implemented recruitment
technology rated their recruitment systems and processes as ‘excellent’ or ‘good’, compared with 29% of
respondents who did not have fully implemented technology.
Insight:
6 in 10 respondents with fully implemented technology Technology made a significant difference in how respondents rated the efficiency and effectiveness of their
rate their recruitment systems as ‘excellent’ or ‘good’ recruitment systems and processes. It’s also apparent that enterprise respondents were far less satisfied with their
recruitment systems and processes than SMBs and mid-market respondents, and this was the same regardless of
whether they used technology or not.
This result is potentially linked to some of the key challenges that were more apparent for enterprise respondents,
such as ‘slow decision making / too many stakeholders’, ‘creating a positive candidate experience’ and ‘reducing
time to hire’. Unfortunately, these three challenges cannot necessarily be improved via the use of technology.
Action:
● Where established, leverage any technology solution to maximise efficiency and effectiveness. Also ensure
your users are familiar with new features and update processes to align with changing functionality.
● Review existing recruitment processes and identify where additional opportunities for optimisation exist.
Consider workflow automations or other technology solutions that may assist.
3 in 10 respondents without fully implemented technology ● Consider conducting candidate surveys to shed light on the candidate experience. This can be invaluable
rate their recruitment systems as ‘excellent’ or ‘good’ when trying to enhance talent acquisition processes.
Good 36% 43% 34% 31% 40% 36% 38% 38% 34% 26%
Average 37% 33% 41% 42% 31% 37% 37% 34% 39% 49%
I don't know 1% 2% 4% 0% 1% 1% 2% 2% 1% 2%
I don't know 1% 0% 0% 2% 3% 3% 1% 0%
Note: This question asked respondents to provide values relating to several aspects of the recruitment process. The Lowest
Saturation segment scale: Highest
number of respondents listed for each column in the table above refers to the average number of people who
provided an answer for these questions, as some respondents may not have answered all questions. average average
value value
Applicant tracking 2 1 2 1 2 2 2 2 1 1
Candidate sourcing 3 3 3 3 3 3 3 3 2 3
Interview scheduling 1 1 1 2 1 1 2 2 1 1
Interviewing 4 5 5 4 5 5 4 5 4 3
Job posting 1 1 1 1 1 1 1 1 1 1
Offer management 1 1 1 1 1 1 1 1 1 1
Reporting 1 1 1 1 1 1 1 1 1 1
Note: This question asked respondents to provide values relating to several aspects of the recruitment process. Lowest
Saturation segment scale: Highest
The number of respondents listed for each column in the table above refers to the average number of people who
median median
provided an answer for these questions, as some respondents may not have answered all questions.
value value
Mid-level managers 34 36 35 34 31 33 35 35 30 35
Senior-level managers 45 44 45 47 43 45 47 45 40 45
Executives 58 55 55 61 59 58 61 62 56 48
Note: This question asked respondents to provide values relating to several aspects of the recruitment process. Lowest
Saturation segment scale: Highest
The number of respondents listed for each column in the table above refers to the average number of people who
average average
provided an answer for these questions, as some respondents may not have answered all questions.
value value
Mid-level managers 30 30 30 30 30 30 30 30 30 40
Senior-level managers 40 38 40 40 40 40 44 40 38 50
Executives 60 40 60 60 60 58 60 60 50 60
Note: This question asked respondents to provide values relating to several aspects of the recruitment process. Lowest
Saturation segment scale: Highest
The number of respondents listed for each column in the table above refers to the average number of people
median median
who provided an answer for these questions, as some respondents may not have answered all questions.
value value
Entry-level / junior roles 3501 3998 2768 3831 3373 3737 2205 3722 2672 6145
Mid-level individual contributors 5468 5645 5497 5805 4956 5746 3821 5537 4677 10150
Mid-level managers 7199 8107 6238 7804 6574 7657 4693 7395 6097 12175
Senior-level individual contributors 9926 11260 8225 10315 9851 10394 7136 10435 8651 11500
Senior-level managers 12955 13180 11738 12919 13549 13514 9870 12933 12388 17778
Executives 22083 20307 23634 22092 21815 22990 16189 22086 20915 31375
Note: This question asked respondents to provide values relating to several aspects of the recruitment process. Lowest
Saturation segment scale: Highest
The number of respondents listed for each column in the table above refers to the average number of people
who provided an answer for these questions, as some respondents may not have answered all questions.
average average
value value
Entry-level / junior roles 1200 1300 1000 1500 1500 1100 1500 1187 1000 3000
Mid-level individual contributors 2000 2500 2000 2750 1500 2000 2500 2000 2000 7500
Mid-level managers 3000 5000 2000 4500 3000 4000 2750 3000 4750 7500
Senior-level individual contributors 5000 8250 2500 5000 5000 5000 5000 5000 5000 5000
Senior-level managers 5500 10000 5000 6500 8000 5500 10000 5000 7500 5000
Executives 15000 15000 7500 10000 15000 15000 8500 10000 15000 25000
Note: This question asked respondents to provide values relating to several aspects of the recruitment process. Lowest
Saturation segment scale: Highest
The number of respondents listed for each column in the table above refers to the average number of people
who provided an answer for these questions, as some respondents may not have answered all questions. median median
value value
Monica
ELMO Watt
SOFTWARE
| ELMO| CLOUD
2021 |HRUnclassified
& PAYROLLPublic
| 2018 149
Turnover rates for new hires
New hire
n= Industry segment
turnover rate n= 813 114 185 274 240 709 104 472 275 66
within probation
period
What is the turnover rate (as a Mid-
15 Accommodation and food services^ 9% Mid-level Senior Enterpri
percentage) for new hires in your Junior to C-suite New SMB market
Overall manage manage Australia se
6 Administrative and support services^ 4% organisation within their probation Mid-level leaders Zealand (1 - 199) (200 -
ment ment (2000+)
period? 1999)
12 Agriculture, forestry and fishing^ 6%
8 Arts and recreation services^ 5%
22 Construction^ 6% Provided details 55% 32% 45% 60% 67% 56% 49% 65% 43% 33%
35 Education and training 6%
I don't know 45% 68% 55% 40% 33% 44% 51% 35% 57% 67%
10 Electricity, gas, water and waste services^ 7%
38 Financial and insurance services 9% Saturation map scale:
Lowest Highest
41 Health care and social assistance 7%
value value
29 Information media and telecommunications^ 7%
30 Manufacturing 7%
7 Mining^ 7%
49 Not for profit 6% New hire turnover
n= Industry segment rate within
82 Professional, scientific and technical services 4%
probation period
17 Public administration and safety^ 3%
393 Australia 7%
8 Rental, hiring and real estate services^ 13%
50 New Zealand 6%
11 Retail trade^ 7% 302 SMB 5%
14 Transport, postal and warehousing^ 10% 119 Mid-market 9%
8 Wholesale trade^ 8% 22 Enterprise^ 13%
2020 new hire turnover rates were roughly the same as 2019, with the A / NZ average remaining at 7%. The results were also broadly the same as 2019 when calculated by country and organisation size.
There was little change between 2019 and 2020 in the percentage of C-suite leaders ‘actively involved in’ or ‘responsible for’ onboarding who did not know their new hire turnover rate.
Insight:
The lack of knowledge about new hire turnover rates was somewhat surprising given that this metric is fairly easy to calculate and can help an organisation gauge if there is an issue with the quality of
hiring and / or with new employee experiences. The cost of recruiting and training a new employee only to see them leave within the first year of their employment is especially regrettable, as the
organisation has likely not yet seen a return on investment for that new starter. In addition, the organisation is forced to fill the role again which duplicates hiring and training costs.
Overall, less than half of all the respondents who indicated they were ‘actively involved in’ or ‘responsible for’ onboarding knew their new hire turnover rate. This indicates that there are still many
executive teams who do not yet see HR as a strategic player at the table. These executive teams do not value the metrics and insights available to them, which can inform their organisational
effectiveness. They are either not asking for these metrics or HR teams are not proactively providing them. Unfortunately, it is common for requests for onboarding metrics to only occur after the
turnover of new starters is noticed by executives. By this time, the issue may be harder to resolve. Proactively tracking these metrics can help HR teams spot potential issues early and minimise new hire
turnover. This can save a lot of time and money.
Action:
● HR must proactively report on new hire turnover rates. A simple way to calculate new hire turnover (a.k.a. ‘early separators’) is to take the most recent segment of new hires who started
between 12 and 24 months ago, and then work out how many of them left within their first year of service. These figures can also be divided into voluntary and involuntary leavers. Voluntary
leavers are potentially reflective of a poor new starter experience. The involuntary leavers are potentially reflective of a poor hire / job fit. Using onboarding surveys can be a good way to
understand what drivers are behind the challenges for new hires.
Example of Company ABC calculating their 2019 new hire turnover on 31 December 2020:
No. of new FTE that started between Jan 1 2019 and 31 Dec 2019 Number that terminated before their 1-year tenure date New hire turnover rate
Insight:
28%
There are a few potential reasons for the decline in respondents saying that onboarding takes up % who said their onboarding program
too much of HR’s time relative to the value it brings: takes 1 day or 1 week
31%
● The increased use of technology to automate onboarding tasks is reducing the amount of
time that HR teams spend onboarding new employees.
● There was less focus on recruitment in 2020 due to the COVID-19 pandemic, so there was 60%
% who said onboarding was a high or
less requirement to spend time onboarding new employees. In many cases, remote
medium priority for their organisation
onboarding was also less time and resource intensive than in-person onboarding. 76%
● The percentage of respondents who said their onboarding program lasts 1, 3 or 6 months
increased whilst the percentage who said it lasts only 1 day or 1 week declined. This
indicates that perceptions around the purpose of onboarding are shifting, from being 16%
% who said onboarding is taking up too
viewed as an administrative task to being viewed as an important aspect of the employee
much of HR's time
experience (EX). Therefore, the perceived value of the time spent onboarding new 23%
employees has changed.
Action:
51%
% that had fully implemented
● Consider the benefits of implementing onboarding technology. With an economic recovery onboarding technology
likely in 2021, recruitment will no doubt return to business agendas. For organisations 35%
considering the use of technology to assist with recruitment and onboarding, now is the
time to undertake market research to find a solution that best fits the needs of the
organisation.
Summary:
There were no major changes in the results for this question between 2019 and 2020. The largest shift was the percentage of respondents who were challenged by ad hoc steps / lack of formal processes,
which reduced by 5 percentage points and could be linked to the increase in fully implemented onboarding technology. Respondents using technology were also less challenged by too little information
for new hires, a lack of orientation for new hires and a lack of regular check-ins with new hires. Twice as many respondents with onboarding technology said they had no onboarding challenges.
Insight:
Creating an effective onboarding process is not just the responsibility of HR teams. Whilst HR teams may take ownership of administrative onboarding tasks, formal induction programs and occasional
check-ins with new starters and individual managers will have the biggest impact on new hire success rates. HR teams can influence how managers onboard new starters by providing leadership
coaching in this area.
Despite technology resolving or reducing numerous onboarding challenges, the right balance of information must be carefully considered. It is tempting to cover too much once there is a form of
technology that can help automate some of the information. This challenges organisations to approach onboarding as an experience and to engage with intent, providing the right information at the right
time. When the key onboarding challenges were compared by organisation size, enterprise respondents found it more difficult to get their onboarding program right. However, this result is not surprising.
The larger the organisation is, the more complex processes tend to be, meaning there can simply be too much to cover in an onboarding program.
Action:
According to an article published in 2019 by Harvard Business Review, there are seven key steps that managers should take to onboard a new starter and set them up for success:
1. Understand the individual challenges for new hires based on their experience and how the change might be impacting them personally – e.g. have they relocated for the role? Is the role a
different level of seniority to their previous role?
2. Accelerate new hires’ learning by identifying what they need to learn from a technical, cultural and political perspective. This will speed up their ability to navigate their way through challenges.
3. Make them part of the team by making sure the team knows why the new starter was hired and what role they will undertake. Introduce them to everybody in the team as quickly as possible.
4. Connect them with key stakeholders outside of their immediate team and check in with them about how those relationships are forming.
5. Give them clear direction when asking them to undertake any work. There are three key things that need to be clarified: What do they need to do? How should they go about doing it? What is
the purpose or benefit of completing the task?
6. Help them succeed early by allocating tasks to complete within a realistic timeframe that considers the extra time they may need to navigate their way through the task for the first time.
7. Coach them for success by providing intensive support when they first join and then schedule regular check-ins to track how they are going and where they need more support.
Ad hoc steps / lack of formal processes 30% 35% 26% 30% 31% 30% 31% 30% 30% 33%
Too little information for new hires 13% 14% 16% 11% 13% 14% 9% 12% 12% 22%
Too much information for new hires 29% 25% 27% 29% 32% 28% 31% 26% 32% 36%
Lack of role clarity for new hires 18% 18% 21% 18% 15% 18% 21% 17% 17% 31%
Lack of orientation for new hires 24% 23% 26% 23% 23% 25% 18% 18% 28% 45%
Lack of training for new hires 24% 24% 25% 22% 28% 24% 26% 24% 25% 27%
Lack of training for you / your team 9% 11% 18% 7% 4% 10% 6% 10% 7% 13%
Length of onboarding process 19% 19% 22% 17% 18% 18% 24% 15% 21% 39%
Lack of regular check-ins with new hires 36% 36% 37% 30% 40% 35% 39% 30% 44% 40%
Integrating new hires into teams / culture 32% 33% 36% 31% 30% 32% 33% 29% 36% 43%
I don't know 4% 5% 5% 2% 3% 4% 3% 4% 4% 3%
Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
What are your organisation's key onboarding challenges?
n = 415 n = 231 n = 147 n = 37 n = 376 n = 211 n = 135 n = 30
Ad hoc steps / lack of formal processes 18% 18% 18% 16% 44% 43% 44% 53%
Too little information for new hires 8% 6% 6% 24% 19% 19% 19% 20%
Too much information for new hires 33% 31% 35% 32% 24% 19% 28% 40%
Lack of role clarity for new hires 16% 14% 17% 22% 20% 19% 17% 43%
Lack of orientation for new hires 16% 13% 17% 38% 32% 24% 40% 53%
Lack of training for new hires 22% 20% 24% 24% 27% 27% 27% 30%
Lack of training for you / your team 9% 8% 7% 16% 10% 12% 7% 10%
Length of onboarding process 19% 13% 25% 27% 19% 17% 16% 53%
Lack of regular check-ins with new hires 31% 26% 37% 41% 40% 34% 51% 40%
Integrating new hires into teams / culture 32% 30% 33% 41% 33% 27% 39% 47%
None - we have no challenges 14% 17% 11% 5% 7% 10% 2% 0%
I don't know 3% 3% 3% 3% 4% 5% 4% 3%
Which metric(s) does your organisation use to measure the performance of its onboarding processes?
I don't know 8%
7%
Summary:
There were no significant changes in the use of onboarding metrics between 2019 and 2020. Nearly half of the
respondents did not use any metrics to measure onboarding effectiveness, and only 1 in 3 respondents used a new hire
retention metric to measure onboarding effectiveness.
Insight:
2 in 5 respondents do not measure the performance The low level of respondents using a new hire retention metric is interesting because 55% of respondents knew their
of their onboarding process new hire turnover rates. Therefore, new hire retention rates should also be easy to calculate. This further strengthens a
previously cited insight in this report, which indicated that new hire turnover and retention rates are not of great
interest at the leadership level, despite the way this metric can help identify issues early and save the organisation from
duplicating hiring and training costs.
When comparing respondents who used onboarding technology, it was clear that technology makes the sourcing of
onboarding metrics easier for HR teams. Metrics relating to new hire retention, time to proficiency, the impact on team
morale / culture, employee performance milestones being met, and headcount vs. output were more commonly used
by those with technology, especially in the SMB and mid-market segments.
Action:
● Utilise metrics to provide insights about onboarding. As a minimum, new hire turnover / retention rates should
1 in 3 respondents measure the effectiveness be calculated and used in regular reports to the C-suite.
of their onboarding process via their new ● Set a regular cadence for analysing and reviewing onboarding metrics. These may be a part of HR meetings or
hire retention rate included in dashboards. Making metrics visible will help prompt questions about what areas need further
investigation and exploration.
Employee performance milestones being met 20% 13% 16% 26% 22% 21% 19% 21% 20% 17%
Impact on team morale / culture 15% 11% 13% 17% 16% 15% 14% 18% 12% 13%
New hire retention 32% 26% 25% 38% 35% 33% 26% 30% 35% 41%
None - we don't measure / use any metrics 43% 40% 44% 43% 46% 44% 42% 45% 45% 30%
Which metric(s) does your organisation use to measure Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
the performance of its onboarding processes?
n = 399 n = 219 n = 144 n = 36 n = 358 n = 198 n = 132 n = 28
Employee performance milestones being met 25% 26% 24% 19% 16% 16% 17% 14%
Impact on team morale / culture 17% 19% 15% 14% 13% 16% 8% 11%
New hire retention 38% 35% 40% 42% 27% 23% 29% 39%
None - we don't measure / use any metrics 38% 40% 39% 28% 49% 50% 52% 32%
25%
23%
22% 21% 2019 (n = 616)
20% 20%
2020 (n = 757)
4%
3%
2% 1%
1 day Up to 1 week Up to 1 month Up to 3 months Up to 6 months More than 6 No formal I don't know
months process
Summary:
Onboarding is increasingly being seen as a critical part of the employee experience (EX). This is seen in the reduced number of
respondents who said their onboarding program takes 1 day or 1 week, and the increased number of respondents who said it takes 1
month or 3 months. The shift to longer onboarding programs indicates that more staged programs are being developed that consider all
aspects of the EX and provide more support for new starters beyond the administrative aspects of onboarding.
Insight:
Best practice is to stage onboarding programs to make them meaningful, not just accessible. For example, aligning employee check-ins
1 in 4 respondents said the duration of their with development milestones that link to training, competency, internal and external relationship building, and social and cultural
onboarding program is up to 1 month integration. Those who are using technology are in a better position to analyse this and find the right balance because so much of the
onboarding journey can be tracked and measured. Regular checkpoints throughout the onboarding journey can be supported via the use
of technology and onboarding feedback surveys, which helps HR teams identify opportunities to improve both the process and the EX.
Roughly 1 in 11 organisations had no formal onboarding process, and this result did not differ greatly across the organisation size
segments. Whilst some organisations may give all the onboarding responsibilities to individual managers to carry out as they see fit,
these organisations are at risk of an unstructured or ‘sink or swim’ approach being used with a new starter.
Action:
● Regardless of the duration of the onboarding process, it’s essential to have a formal process in place. A formal process helps
time-poor managers take a more proactive role in the onboarding of new starters. It also ensures all steps are covered, with the
right amount of information for new hires distributed at the right time during their onboarding journey. This approach reduces
1 in 5 respondents said the duration of their the risk of information overload for new hires.
onboarding program is up to 1 week ● Ensure all new hires have a consistent onboarding experience. Without a formal process in place, there is no real understanding
of what the new employee experience is like; and as the organisation grows larger, so too does the risk that pockets of the
organisation are creating a poor EX for new starters. Unfortunately, the repercussions of onboarding inconsistencies are often
not known until valuable time and money has already been lost.
Up to 1 week 20% 19% 18% 22% 21% 21% 15% 20% 22% 14%
Up to 1 month 25% 29% 29% 18% 27% 25% 21% 26% 24% 22%
Up to 3 months 23% 20% 18% 28% 21% 21% 34% 22% 22% 28%
I don't know 3% 6% 6% 0% 1% 3% 4% 2% 3% 8%
Which of the following stages best describes your organisation's current state of HR and payroll
and technology for onboarding?
Has fully implemented technology Does not have fully implemented technology
Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
What is the average duration of your organisation's onboarding
program?
n = 399 n = 219 n = 144 n = 36 n = 358 n = 198 n = 132 n = 28
How long does it typically take for a new hire to be fully productive after they have commenced employment?
(Including onboarding period)
37%
33%
2019 (n = 615)
25% 2020 (n = 756)
20% 20%
17%
11%
10% 10%
7%
4% 3%
2% 2%
Summary:
3 months was still the most common length of time for a new starter to reach full productivity in 2020.
However, there was an increase in respondents who said that full productivity is reached within 1 month,
1 in 3 respondents said new hires typically take 3 which correlates with the increase in the number of respondents who said their onboarding program lasts 1
months to get up to full productivity month. There was no substantial difference between the answers given to this question by respondents who
do and do not use onboarding technology.
Insight:
Like many other areas of this report, it’s apparent that while technology can make onboarding processes
easier, save time and help create a more consistent EX for new starters, it can only improve processes so
much. For example, the impact of technology on time to productivity for new hires is negligible. This indicates
there are other elements to consider in getting new staff up to speed quickly. These elements may be how
well ‘socialised’ the new hire is with colleagues and peers, and any training and support they are given in
1 in 5 respondents said new hires typically take 6
these early days of employment.
months to get up to full productivity
Action:
● Ensure the onboarding process contains the right mix of elements to ensure new hires are productive
as soon as possible. This will include opportunities to meet and collaborate with colleagues,
providing relevant training and tools to do the job, offering information about the company and its
culture, and ensuring all compliance-related issues (including paperwork for third-party agencies) are
sorted out quickly and efficiently.
1 day 2% 2% 3% 1% 4% 2% 2% 3% 2% 2%
1 month 25% 28% 25% 24% 24% 26% 19% 24% 26% 22%
3 months 33% 32% 30% 35% 33% 32% 35% 30% 35% 39%
6 months 17% 16% 16% 21% 16% 17% 21% 18% 17% 13%
12 months + 3% 3% 3% 2% 5% 3% 4% 4% 3% 5%
Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
How long does it typically take for a new hire to be fully
productive after they have commenced employment?
(Including onboarding period)
n = 398 n = 219 n = 143 n = 36 n = 358 n = 198 n = 132 n = 28
1 Day 2% 2% 2% 0% 3% 4% 2% 4%
12 months + 2% 1% 3% 3% 5% 7% 3% 7%
Overall, how would you rate your organisation's internal systems and processes for efficiently and effectively
managing the onboarding of new starters?
Excellent 9%
Good 33%
Average 37%
Poor 12%
Very poor 6%
Summary:
Roughly 2 in 5 respondents said their onboarding process was excellent or good, and 1 in 5 respondents said their onboarding process was poor or very poor. Very few respondents selected ‘I don’t
know’ for this question, yet it was established in an earlier question that nearly half of respondents do not use any metrics to measure the effectiveness of their onboarding process.
Insight:
The lack of onboarding metrics raises an interesting question for those attempting to assess their internal systems and processes. What have respondents based their rating on? Gut feelings? Verbal
feedback from new starters or managers? This confusion again highlights how critical metrics are for assessing all aspects of HR’s role.
There were two main conclusions that were drawn from this question. The first was that there is plenty of room to improve onboarding processes across A / NZ. The second was that technology
significantly assists with the creation of a good onboarding process. 58% of respondents who have a fully implemented form of onboarding technology said their internal onboarding systems and
processes were excellent or good, in comparison to only 26% of respondents without onboarding technology.
A structured onboarding process is vital to improving perceptions of the onboarding experience. According to an article published by Forbes Magazine in 2019, new employees who went through a
structured onboarding program were 58% more likely to be with the organisation after three years, and organisations with a good onboarding process experience reported 50% greater new starter
productivity.
Action:
● Focus on the employee experience (EX) from day one. The impression an employer makes on a new hire is a fair indication of what the employee can expect for their future career with the
organisation. These early days are also the ideal opportunity to show how much the organisation values its people. The Forbes article cited above outlined the worst ‘first day experiences’ that
may lead to a new employee resigning:
- The manager is not there to greet the new employee or spend enough time with them.
- There is no workspace available for the new employee – e.g. they sit in a meeting room with a laptop rather than a pre-planned workspace with the rest of their team.
- The critical equipment and resources that a new hire needs are not available – e.g. they do not have essential logins set up, or there is no computer available to use.
- The organisation only talks about policies and procedures but there is no talk about the organisation’s mission, vision or values.
Good 33% 34% 35% 30% 35% 33% 33% 35% 32% 27%
Average 37% 36% 35% 41% 34% 36% 41% 36% 38% 38%
Poor 12% 12% 15% 11% 11% 12% 12% 10% 15% 14%
I don't know 2% 5% 3% 0% 3% 2% 2% 3% 1% 3%
I don't know 2% 1% 1% 6% 3% 5% 2% 0%
How many hours per week do you personally SMB Mid-market Enterprise
Junior to Mid-level Senior C-suite
typically spend on these key onboarding Overall Australia New Zealand
mid-level management management leaders
activities? (1 - 199) (200 - 1999) (2000+)
Onboarding forms 2 3 2 2 2 2 3 2 3 4
Pre-boarding 3 3 3 3 3 3 2 3 3 4
Role-specific training 7 5 7 10 5 8 4 9 4 7
Technology access 3 3 3 2 2 3 4 2 3 5
Note: This question asked respondents to provide values relating to several aspects of the onboarding process. Lowest
Saturation segment scale: Highest
The number of respondents listed for each column in the table above refers to the average number of people
average average
who provided an answer for these questions, as some respondents may not have answered all questions.
value value
How many hours per week do you personally SMB Mid-market Enterprise
Junior to Mid-level Senior C-suite
typically spend on these key onboarding Overall Australia New Zealand
mid-level management management leaders
activities? (1 - 199) (200 - 1999) (2000+)
Onboarding forms 1 1 1 1 1 1 1 1 1 2
Pre-boarding 2 2 1 2 2 2 2 2 2 3
Role-specific training 2 1 2 2 2 2 2 2 2 4
Technology access 1 1 1 1 1 1 1 1 1 3
Note: This question asked respondents to provide values relating to several aspects of the onboarding process. Lowest
Saturation segment scale: Highest
The number of respondents listed for each column in the table above refers to the average number of people
median median
who provided an answer for these questions, as some respondents may not have answered all questions.
value value
Monica
ELMO Watt
SOFTWARE
| ELMO| CLOUD
2021 |HRUnclassified
& PAYROLLPublic
| 2018 175
Performance management key challenges
Summary:
Overall there has been little change in key performance management challenges since 2019. The top three challenges remain the same as in 2020: ‘lack of consistency between managers /
departments’; ‘lack of manager training’; and ‘lack of timely and meaningful feedback’.
Insight:
Douglas McGregor highlighted why managers resist conventional performance processes in an article he wrote for Harvard Business Review back in 1957. Those findings essentially mirror the top three
challenges still being cited in 2020. This highlights that there have been few significant changes in the approach towards performance management in the last several decades.
While there’s general agreement that performance management is an essential business process, there is division about the best way to manage and carry out the process. Quite often, performance
management activities are not seen as valuable by employees or managers. Therefore, HR leaders need to question the true purpose of performance management within their organisation. It can often
be broken down into three high-level objectives:
● Compliance
● Building skills and potential (capability)
● Aligning employees and teams with corporate strategy and goals
When comparing the responses to this question from those who do have fully implemented performance management technology and those who do not, the results show that challenges relating to the
general process and formal frameworks are significantly reduced with the use of technology. However, the challenges relating to manager training and capability remain the same. This confirms that
technology is not a solution by itself, but can lay the critical foundations for a more efficient performance management process. The key to success, however, is developing managers’ coaching skills
and their abilities to have meaningful conversations with their employees, and using the process to create alignment between individual, team and organisational goals.
Action:
● Identify the underlying purpose of performance management in your organisation. Is it about meeting compliance obligations? Is it about aligning personal, team and organisational efforts?
Perhaps it’s focused on building skills and capability, or a combination of these and other drivers. Once the purpose is identified, review the processes that help achieve that core purpose.
● Assess how technology can help manage and deliver performance management processes, but don’t stop there. Also review the skills of managers to ensure they can conduct meaningful
conversations with employees. Finally, consider whether your corporate culture is open to building continuous performance improvement processes into everyday operations.
Lack of a formal performance framework 22% 24% 26% 25% 16% 23% 20% 20% 26% 23%
Lack of appropriate recognition & rewards 27% 30% 36% 23% 20% 27% 24% 25% 28% 32%
Lack of consistency between managers, departments, etc. 56% 64% 60% 58% 48% 58% 48% 45% 70% 74%
Lack of formal processes 20% 17% 19% 20% 23% 22% 13% 20% 21% 17%
Lack of manager training 48% 55% 51% 48% 44% 50% 42% 43% 55% 59%
Lack of personal development plans 37% 30% 36% 39% 38% 38% 29% 32% 43% 39%
Lack of recognition for high performers 29% 31% 34% 26% 26% 30% 23% 25% 30% 47%
Lack of support for underperformers 24% 25% 28% 22% 21% 23% 24% 20% 26% 35%
Lack of timely or meaningful feedback 44% 43% 52% 44% 38% 45% 42% 36% 54% 56%
Manual processes 35% 35% 37% 35% 34% 35% 34% 34% 37% 35%
Unclear goals / KPIs / OKRs 42% 34% 46% 42% 42% 41% 47% 41% 43% 45%
None - we have no challenges 5% 2% 2% 4% 10% 5% 2% 8% 2% 2%
I don't know 2% 8% 3% 0% 1% 2% 3% 3% 2% 0%
Has fully implemented technology Does not have fully implemented technology
Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
What are your organisation's key performance management
challenges?
n = 365 n = 188 n = 137 n = 40 n = 361 n = 214 n = 121 n = 26
Lack of a formal performance framework 12% 9% 15% 15% 33% 29% 40% 35%
Lack of appropriate recognition & rewards 21% 23% 18% 25% 32% 26% 40% 42%
Lack of consistency between managers, departments, etc. 56% 44% 66% 78% 57% 46% 74% 69%
Lack of formal processes 9% 6% 12% 10% 32% 33% 31% 27%
Lack of manager training 46% 43% 49% 55% 51% 43% 62% 65%
Lack of personal development plans 31% 28% 35% 30% 43% 36% 52% 54%
Lack of recognition for high performers 27% 25% 23% 48% 30% 24% 38% 46%
Lack of support for underperformers 20% 16% 21% 33% 27% 23% 32% 38%
Lack of timely or meaningful feedback 42% 31% 54% 53% 47% 40% 55% 62%
Manual processes 25% 24% 26% 23% 45% 43% 49% 54%
Unclear goals / KPIs / OKRs 35% 30% 39% 43% 49% 50% 48% 50%
None - we have no challenges 6% 10% 2% 3% 4% 6% 1% 0%
I don't know 2% 4% 1% 0% 2% 3% 2% 0%
Saturation map scale:
Lowest Highest
value value
Which of the following methods / paradigms are used to undertake performance management in your organisation?
Key performance indicators (KPIs) (e.g. specific sales / retention targets) 53%
51%
Balanced scorecards 9%
9% 2020 (n = 707)
Management by objectives (MBO) 8% 2019 (n = 610)
10%
I don't know 2%
5%
Summary:
There was no dramatic change in the methods being used to manage performance over the last year, with the top
three items from 2019 being carried across to 2020. There was a marginal increase in the use of objectives & key
results (OKRs), key performance indicators (KPIs) and personal development plans (PDPs). However,
7 in 10 respondents use performance performance appraisals were the most popular method used by some margin.
appraisals to track performance
Insight:
In the wake of COVID-19, it is understandable that HR teams may not have prioritised revamping their
performance management processes; however, research undertaken by ELMO in August 2020 suggested that
most senior leaders were highly concerned about employee performance and productivity whilst working
remotely.
The marginal increase in the use of OKRs is a positive development. OKRs form part of a goal-setting framework
that helps organisations define their top strategic priorities, breaking down strategy and execution into two
1 in 2 respondents use key performance components: objectives (this is the direction or aim); and key results (how those goals will be achieved). OKRs are
indicators (KPIs) to track performance particularly useful for establishing high-level, yet measurable goals for a business by establishing ambitious
outcomes that can be tracked over a set time frame – typically a quarter. The key results are set in performance
reviews and are tracked via regularly scheduled performance check-ins.
Action:
● Review existing performance management methods to ensure they are supporting, adding to, and
reinforcing overall business objectives.
● Consider exploring and experimenting with different structures and formats to find the right methods,
tools and procedures for your organisation, teams and employees.
1 in 4 respondents use 360-degree ● With hybrid work likely to continue in the future, ensure existing performance management methods
feedback to track performance support and are accessible to both on-site and work-from-home employees.
360-degree feedback 26% 26% 33% 21% 26% 27% 20% 23% 28% 33%
Objectives & key results (OKRs) 26% 24% 24% 27% 28% 24% 37% 27% 24% 30%
Performance appraisals 67% 75% 66% 69% 63% 68% 66% 63% 72% 75%
Personal development plans (PDPs) 49% 55% 54% 44% 48% 50% 44% 44% 55% 58%
I don't know 2% 4% 2% 1% 2% 2% 3% 3% 1% 2%
Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
Which of the following methods / paradigms are used to
undertake performance management in your organisation?
n = 358 n = 185 n = 134 n = 39 n = 359 n = 208 n = 116 n = 25
360-degree feedback 31% 30% 34% 28% 21% 18% 22% 40%
Objectives & key results (OKRs) 31% 32% 29% 31% 22% 22% 18% 28%
Performance appraisals 75% 71% 78% 82% 61% 56% 66% 64%
Personal development plans (PDPs) 57% 51% 64% 62% 42% 37% 45% 52%
I don't know 1% 1% 1% 3% 3% 4% 1% 0%
Which metric(s) does your organisation use to measure the effectiveness of its performance management
processes?
The use of metrics is still limited, only 2 in 5 respondents using metrics to assess the effectiveness of their performance management process. One quarter simply looked at whether an appraisal was completed
to measure success.
Insight:
The fact that all listed metrics rate relatively low, with only completion rates as a metric sitting above 25% of respondent usage, indicates uncertainty about what needs to be assessed. HR teams may be unsure
on the intent of the performance process or the value it can potentially bring to their organisation. Without this clarity, meaningful metrics cannot be defined to measure success. Value creation, business
outcomes, customer satisfaction, employee engagement / morale and team collaboration are suggested as ways to gauge whether an organisation has a successful operating model that develops its employees
and improves productivity. It’s critical to clarify your organisation’s goals for performance management. Some common goals include:
A combination of qualitative and quantitative data is required to gauge the effectiveness of the performance management process. This might be obtained through:
● Carrying out a pulse survey of a selection of employees and managers on their views and experiences of the performance management process and tools and how they have contributed to achieving the
desired goals
● Conducting interviews with a sample of employees and managers about their experiences of performance management
● Focus groups
● Reviewing a sample of objectives and personal development plans for quality
● Extracting data and reports from your performance management software (if you have one)
Action:
● Determine the metrics that will most effectively assess the performance management processes used in your organisation. Remember that some metrics can be obtained through other channels, for
example, information about employee engagement can be obtained by conducting employee surveys.
● Consider how technology can help with the extraction and analysis of the metrics that matter to your organisation. Also ensure managers have the appropriate skills to undertake effective performance
management interventions with employees.
Average performance rating 17% 17% 21% 16% 16% 18% 13% 16% 17% 28%
Employee and manager engagement 25% 26% 22% 25% 27% 25% 26% 25% 25% 25%
Employee productivity 17% 14% 17% 14% 22% 17% 20% 20% 13% 16%
Morale around performance 17% 14% 17% 16% 18% 15% 27% 18% 14% 20%
Performance appraisal completion rates 26% 26% 28% 29% 21% 28% 18% 22% 32% 33%
None - we don't use any metrics 39% 28% 36% 42% 45% 39% 43% 42% 41% 22%
Has fully implemented technology Does not have fully implemented technology
Which metric(s) does your organisation use to measure the Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
effectiveness of its performance management processes?
n = 357 n = 184 n = 134 n = 39 n = 347 n = 206 n = 116 n = 25
Average cost of terminating problem employees 3% 4% 1% 8% 1% 1% 1% 0%
Average performance rating 22% 20% 23% 28% 13% 12% 10% 28%
Employee and manager engagement 30% 32% 28% 33% 19% 18% 22% 12%
Employee productivity 18% 21% 15% 18% 16% 19% 11% 12%
Morale around performance 22% 23% 19% 26% 11% 13% 8% 12%
Performance appraisal completion rates 34% 29% 39% 44% 18% 16% 23% 16%
Problem employee rate 6% 5% 6% 8% 5% 4% 6% 4%
Rehabilitation rate for problem employees 4% 3% 4% 10% 2% 1% 3% 0%
Termination rate for problem employees 8% 8% 8% 13% 5% 4% 6% 12%
Time taken to complete performance appraisals 11% 10% 11% 13% 6% 7% 3% 8%
None - we don't use any metrics 29% 32% 32% 8% 50% 50% 51% 44%
I don't know 7% 7% 4% 21% 5% 5% 5% 4%
Saturation map scale:
Lowest Highest
value value
Weekly 1%
1%
Monthly 5%
5%
Quarterly 14%
10%
Biannually 24%
26%
Annually 31%
37%
Project-based appraisals 0%
1% 2020 (n = 704)
7% 2019 (n = 608)
We don't conduct any performance appraisals
5%
I don't know 1%
2%
Summary:
One third of organisations are using annual performance appraisals and one quarter are using a bi-annual (6-
monthly) cycle. This is very similar to the results of the 2019 survey. Given that one of the top three performance
management challenges is feedback not being timely or meaningful, it is surprising that over 50% of
organisations are still locked into undertaking appraisals once or twice a year.
Insight:
1 in 3 respondents conduct performance The challenge with annual and bi-annual performance appraisals is the risk that goals set more than 6 months
appraisals annually ago become less meaningful or even redundant if priorities have been adjusted throughout the course of the
year. As outlined in this research by McKinsey, agile organisations understand this and have designed
frameworks and operating rhythms that provide constant, almost real-time feedback opportunities that allow
for course correction. On a positive note, there are some trends in the right direction, with annual and bi-annual
cycles slightly reducing and quarterly cycles slightly increasing, which is likely linked to the emerging trend
towards OKRs.
Action:
● Consider the benefits of more frequent performance conversations. The days of annual performance
reviews are numbered. Employees expect regular performance conversations with their managers, so
consider formally introducing this kind of framework.
● Focus on the desired outcomes of the performance process. Many of the desired outcomes (e.g.
1 in 4 respondents conduct performance increased individual engagement) may already be happening through other processes and strategies
appraisals biannually within the organisation. Identify these and then build a framework around the aspects that genuinely
need more attention, so this does not become a ‘tick the box’ exercise and actually helps people to
achieve their own personal goals and ensures that those goals are in line with or contributing to the
broader strategic goals of your organisation.
Weekly 1% 0% 0% 2% 1% 1% 1% 2% 0% 0%
Monthly 5% 7% 3% 5% 5% 5% 3% 5% 5% 2%
Quarterly 14% 14% 13% 13% 17% 15% 14% 16% 14% 9%
Biannually 24% 25% 26% 27% 18% 23% 28% 22% 25% 36%
Annually 31% 32% 33% 31% 30% 31% 30% 29% 33% 34%
Ad hoc 6% 7% 6% 6% 5% 7% 1% 6% 7% 3%
Project-based appraisals 0% 1% 0% 0% 1% 0% 0% 1% 0% 0%
I don't know 1% 2% 1% 0% 1% 1% 2% 2% 0% 0%
How frequently are performance appraisals conducted in your Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
organisation?
n = 357 n = 184 n = 134 n = 39 n = 347 n = 206 n = 116 n = 25
Weekly 1% 3% 0% 0% 1% 1% 0% 0%
Monthly 6% 8% 6% 0% 5% 4% 6% 4%
Project-based appraisals 0% 0% 0% 0% 1% 1% 0% 0%
I don't know 1% 1% 1% 0% 2% 3% 0% 0%
Overall, how would you rate your organisation's internal systems and processes for efficiently and effectively
managing employee performance?
Excellent 6%
Good 26%
Average 41%
Poor 17%
Very poor 9%
Summary:
The responses to this question show that both managers and employees find the performance process onerous and ineffective. Just over half of the respondents (58%) rated their internal systems and
processes as either average or poor, and a further 9% said they were very poor.
Insight:
With the overwhelming number of respondents indicating that their performance systems and processes are ‘average’, and employees now expecting regular, meaningful performance conversations,
it’s clear that change is overdue in this area.
A comprehensive report written by a group of experts in this area called performance management “the Achilles heel” of HR management. Another article from The Washington Post labelled traditional
performance management “corporate kabuki”, specifically referring to its “endless paperwork” as being troublesome. The article suggested the reasons for this extreme dislike include evaluation
criteria that is unrelated to the jobs being assessed, and “simplistic and quota-driven ratings used to label the performance of otherwise complex, educated human beings”. Therefore, it is not surprising
that, although survey respondents said that they spent a lot of time on performance management, roughly two thirds felt that their processes and systems were average or below average.
Technology is not the sole answer to this issue. HR teams cannot implement performance management technology and expect it to generate an effective process for them automatically. At a higher
level, performance management is about organisational alignment. The company’s culture and management capability play an important role in developing an effective performance management
process. This is something technology alone cannot improve.
Instead of enforcing traditional approaches to performance management that have not fundamentally changed in decades, leaders need to play a different role, by acting as facilitators and enablers of
high performance, removing barriers to performance, and providing career pathways and guidance to their team members.
Action:
● Change the focus of performance management from being merely a box-ticking exercise. Concentrate on embedding performance-related conversations into the culture of the organisation and
ensure managers have the capability to undertake performance-related interventions, including having difficult conversations, with employees.
● Before implementing a new framework, pilot a few different structures with different teams and review their effectiveness. Think of ways to make performance management bottom-up and
driven by employees. People tend to make better decisions when they are motivated and empowered to take ownership of their own development.
● Ensure leaders endorse and support any new framework or approach to performance management.
● Once a suitable framework has been defined, ensure technology and tools are in place to support the end-to-end performance management process.
Excellent 6% 8% 3% 5% 8% 6% 6% 8% 4% 0%
Good 26% 22% 29% 21% 30% 25% 29% 29% 24% 14%
Average 41% 47% 40% 43% 38% 42% 39% 38% 44% 53%
Poor 17% 12% 15% 22% 14% 16% 18% 16% 16% 17%
I don't know 2% 2% 3% 0% 2% 1% 3% 2% 0% 3%
Overall, how would you rate your organisation's internal systems Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
and processes for efficiently and effectively managing employee
performance? n = 357 n = 184 n = 134 n = 39 n = 346 n = 205 n = 116 n = 25
Excellent 8% 11% 5% 0% 4% 6% 3% 0%
I don't know 1% 1% 0% 5% 2% 3% 1% 0%
Note: This question asked respondents to provide values relating to several aspects of the Lowest
Saturation segment scale: Highest
performance management process. The number of respondents listed for each column in the table average average
above refers to the average number of people who provided an answer for these questions, as some
respondents may not have answered all questions. value value
Employees 5 5 5 5 5 5 5 5 5 8
HR team members 10 8 11 10 10 10 12 10 10 13
People managers 16 20 20 16 15 17 15 15 20 17
Note: This question asked respondents to provide values relating to several aspects of the
Lowest
Saturation segment scale: Highest
performance management process. The number of respondents listed for each column in the table
above refers to the average number of people who provided an answer for these questions, as some median median
respondents may not have answered all questions. value value
Monica
ELMO Watt
SOFTWARE
| ELMO| CLOUD
2021 |HRUnclassified
& PAYROLLPublic
| 2018 198
Succession management key challenges
% of respondents who cited these as top challenges % of organisations with fully implemented succession
for their organisation in 2021 planning technology
13% 13% 29%
21% 18% 18% 21%
12% 15% 14% 15%
In the general section of this report, 13% of respondents said succession planning was expected to be a top challenge for their organisation in 2021. This was on par with the percentage of respondents who said
they would be challenged by performance management (13%) or recruitment (12%), yet the investment into performance management and recruitment technology remains substantially higher than succession
management technology.
In 2020, only 21% of organisations had a form of succession management technology fully implemented, which was the lowest volume of implementation for any HR technology type. This figure increased only
marginally from 2019 when implementation volume was at 15%. Implementation rates of succession management technology are broadly the same regardless of the organisation size. At best, 1 in 3 enterprise
organisations said they use a form of succession management technology.
Insight:
The 2020 survey results reinforced the belief that HR teams are struggling to find time to spend on succession planning, let alone do it well. According to an article published by Forbes in 2019, 2 in 3
organisations do not have a succession management strategy in place. For most organisations, succession management is seen as an aspirational part of HR’s remit; it appears there are always more pressing
issues that end up taking precedence. However, 59% of respondents said their organisation intends to invest in this kind of technology within the next 12 months, which reflects widespread awareness about the
benefits of effective succession management.
Action:
● Addressing succession planning will help retain talent, drive employee engagement, and enable more operational continuity when employee churn occurs in critical roles. HR must communicate these
benefits to the wider business – especially senior leadership.
● Prioritising succession discussions can be challenging with so many competing priorities. If it is difficult to find a starting point, don’t assume a comprehensive solution is required. Instead, try to initiate
career path questions in existing activities such as performance reviews, or remuneration cycles.
Summary:
Between 2019 and 2020, there were several changes to the key challenges relating to succession management. The first change
relates to the availability of talent – this was seen in the reduced number of respondents who selected ‘external talent shortage’,
‘weak talent pipeline’ or ‘weak bench strength’ as key challenges. The second noteworthy change was the increase in respondents
who selected ‘lack of professional development opportunities’ as a key challenge.
Insight:
The reduction in challenges relating to talent availability – either internally or externally – indicates there may be more organisations
1 in 3 respondents said a lack of professional out there getting a better handle on succession management. This shift is also likely related to the pandemic and subsequent
development opportunities was their biggest economic recession, which saw most organisations freeze recruitment and cut non-essential jobs and budgets. As workforce
succession management challenge reductions were made, the external talent pool began to increase. Employees who were retained were more likely to remain with
their employer in 2020 whilst the economic situation was uncertain, potentially improving succession bench strength and the overall
talent pipeline. However, it’s also timely to consider any constraints in relation to succession management. This might include the
resources required to run leadership development programs and reduced opportunity for internal role transfers, given COVID-19
lockdown and other unexpected cost constraints.
Action:
● Succession management must be prioritised in 2021. With professional development taking a backseat in many
organisations throughout 2020 due to budgetary and operational constraints, and with employment markets looking
stronger in the short-to-mid term, employers will need to be conscious of maintaining bench strength in the first half of 2021.
Less than 1 in 10 respondents said
they had no challenges relating to ● Consider how technology can assist. When responses were broken down by those who did and did not use a form of
succession management succession management technology, the results showed that technology does a lot to support HR teams with their
succession management strategy. For example, it helps to clarify the professional development opportunities available and
identify new / emerging roles for potential successors. It also makes the record keeping of skills, experience and
qualifications much easier, which may also be why respondents who use technology are less challenged by a lack of time or
resources.
External talent shortage 20% 11% 19% 22% 22% 20% 21% 19% 22% 18%
Lack of budget 22% 14% 28% 22% 22% 23% 18% 20% 24% 28%
Lack of professional development
33% 28% 39% 32% 32% 33% 38% 30% 37% 38%
opportunities
Lack of resources 25% 23% 33% 21% 24% 26% 22% 19% 32% 35%
Lack of time 25% 26% 26% 19% 29% 24% 29% 20% 32% 23%
New or emerging roles 18% 15% 21% 18% 16% 18% 17% 17% 20% 18%
No buy-in from senior leadership 17% 20% 19% 19% 12% 17% 17% 16% 17% 22%
No record keeping of current employees'
28% 37% 32% 27% 23% 29% 22% 19% 38% 43%
skills, experience or qualifications
Weak bench strength 17% 12% 12% 20% 20% 17% 17% 13% 22% 23%
Weak talent pipeline 29% 17% 30% 29% 34% 30% 26% 25% 32% 45%
I don't know 10% 20% 14% 10% 2% 10% 10% 11% 7% 13%
Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
What are your organisation's key succession
management challenges?
n = 121 n = 62 n = 42 n = 17 n = 524 n = 294 n = 187 n = 43
External talent shortage 21% 19% 21% 24% 19% 18% 22% 16%
Lack of budget 19% 19% 21% 12% 23% 20% 25% 35%
Lack of professional development opportunities 21% 21% 24% 18% 36% 32% 40% 47%
Lack of resources 15% 13% 19% 12% 27% 20% 35% 44%
Lack of time 20% 16% 21% 29% 26% 21% 34% 21%
New or emerging roles 25% 24% 29% 18% 16% 15% 18% 19%
No buy-in from senior leadership 9% 8% 10% 12% 19% 17% 19% 26%
No record keeping of current employees' skills,
12% 5% 24% 6% 32% 22% 41% 58%
experience or qualifications
Weak bench strength 17% 5% 26% 41% 17% 15% 21% 16%
Weak talent pipeline 26% 23% 24% 47% 30% 26% 34% 44%
None - we have no challenges 13% 18% 12% 0% 6% 8% 3% 5%
I don't know 9% 8% 5% 24% 10% 12% 7% 9%
Saturation map scale:
Lowest Highest
value value
Summary:
Overall, the results for this question indicated a regression in the use of succession management metrics between 2019 and
2020. More than half of respondents ‘actively involved in’ or ‘responsible for’ succession management said they do not use
any metrics to assess how effective their succession management processes are. This indicates that most HR teams are
unsure about the true objectives and desired outcomes for their succession management efforts.
The only metric that increased in use was ‘diversity amongst identified or placed successors’, which reflects the increased
focus on diversity and inclusion in specific roles and industries. No specific metric stood out from the rest as a potential ‘best
practice’ metric.
Insight:
The key reason that succession management is so challenging and tends to fall by the wayside in favour of other competing
priorities is that the types of data and metrics required to paint a holistic picture of a potential successor needs to be sourced
1 in 2 respondents do not use any metrics to from a variety of processes and systems, including those relating to performance management and professional
measure the effectiveness of their succession development. Pulling this data together can be an extremely time-consuming and complex process. Workforce analytics has
management process surged, especially in larger organisations, which has created more data and more complexity leading to even more confusion
about how to do this well.
Action:
● Select the metrics that most effectively assess succession management processes in your organisation. Some of these
metrics may be easier to obtain and track with the aid of technology – for example, ‘percentage of roles filled
internally’ or ‘retention rate of high-potential / high-performance employees’. When looking at the responses to this
question from those who do use succession management technology and those who don’t, it was evident that
technology makes the availability or ease of sourcing metrics much easier.
Which metric(s) does your organisation use to measure the Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
effectiveness of its succession management processes?
n = 121 n = 62 n = 42 n = 17 n = 523 n = 294 n = 186 n = 43
Diversity amongst identified or placed successors 17% 15% 17% 29% 5% 4% 6% 12%
Percentage of roles filled internally 19% 19% 19% 18% 11% 9% 13% 16%
Ratio of internal to external hires for critical roles 13% 6% 14% 35% 4% 2% 6% 9%
Retention rate of high-potential / high-performance employees 27% 26% 33% 18% 9% 7% 13% 9%
Turnover amongst high-potential / high-performance employees 21% 18% 26% 24% 9% 7% 11% 12%
None - we don't use any metrics 30% 37% 29% 6% 61% 62% 61% 51%
Which of the following employee levels in your organisation have a succession plan in place?
38%
None - we have no succession plans in place
37%
26%
Senior-level Management
31%
25%
Leadership / C-level
29%
21%
Key specialist / technical roles
20%
17%
Mid-level Management
21%
13%
Junior to mid-level (individual contributors)
10%
2020 (n = 644)
9%
I don't know
8% 2019 (n = 490)
6%
Long-serving employees (not C-level)
9%
Summary:
Out of the 644 respondents who said they were ‘actively involved in’ or ‘responsible for’ succession management, 1 in 3 said
they did not have any succession plans in place. Roughly a quarter had succession plans in place for senior-level
Management roles and leadership / C-level roles. One fifth had plans in place for key specialist / technical roles.
Insight:
The above statistic about not having any succession plans in place remained unchanged since 2019 and speaks volumes
about succession management being aspirational for most HR teams. Of note in 2020 was the decline in succession
planning for C-suite, senior and mid-level Management roles, and the increase in succession planning for junior to mid-level
and key specialist / technical roles. Whilst management roles still make up the majority of roles that HR teams focus their
succession planning efforts on, the increase in junior to mid-level and key specialist / technical roles for which succession
plans are in place reflects an emerging awareness of how succession management can be used to drive employee
1 in 3 respondents have no engagement and retention throughout the organisation.
succession plans in place
Action:
● Identify ‘at risk’, critical roles within your organisation – those roles which cannot be filled easily if the current
occupant were to leave the organisation or move to a different position. Can retention and engagement strategies
be targeted and used to keep these ‘at risk’ employees within your workforce?
● Assess whether other employees within your workforce have the skills, experience and desire to be groomed for
these key roles. If no one is suitable, consider creating a pool of externally sourced talent as part of a strategic
approach to talent management. Keep track of potential candidates working elsewhere who may be suitable for
these roles in the future.
Junior to mid-level (individual contributors) 13% 13% 9% 13% 15% 13% 9% 13% 14% 8%
Key specialist / technical roles 21% 16% 19% 25% 20% 21% 23% 20% 20% 30%
Leadership / C-level 25% 19% 20% 26% 30% 26% 17% 20% 29% 38%
Mid-level Management 17% 16% 19% 18% 14% 17% 13% 14% 20% 22%
Senior-level Management 26% 25% 25% 28% 24% 26% 22% 18% 33% 43%
None - we have no succession plans in place 38% 29% 37% 37% 42% 37% 44% 41% 37% 18%
Has fully implemented technology Does not have fully implemented technology
Which of the following employee levels in your Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
organisation have a succession plan in place?
n = 121 n = 62 n = 42 n = 17 n = 523 n = 294 n = 186 n = 43
Junior to mid-level (individual contributors) 23% 19% 29% 24% 10% 11% 10% 2%
Key specialist / technical roles 36% 31% 40% 41% 18% 18% 16% 26%
Leadership / C-level 41% 34% 50% 47% 21% 17% 25% 35%
Mid-level Management 35% 34% 36% 35% 13% 10% 17% 16%
Senior-level Management 43% 34% 48% 65% 22% 14% 30% 35%
None - we have no succession plans in place 12% 19% 7% 0% 43% 46% 44% 26%
Overall, how would you rate your organisation's internal systems and processes for efficiently and effectively
managing succession planning?
Excellent 3%
Good 12%
Average 30%
Poor 28%
Summary:
Only 1 in 7 respondents rated their succession planning systems and processes as excellent or good, in contrast to nearly 1 in 2 who said they were poor or very poor. When the responses to
this question were looked at in terms of those who use succession management technology and those who do not, 1 in 2 respondents using technology rated their systems and processes as
excellent or good in comparison to just 1 in 12 who did not use technology.
Insight:
In comparison to every equivalent question for the other HR topics examined in this report, the above figures indicate succession management is the most poorly regarded area within HR’s
remit. Organisations often lack clarity about what they want their succession planning strategy to deliver, which was evident in their inability to measure effectiveness. Furthermore, the events
of 2020 forced many organisations to re-evaluate their business operations, which pushed succession management even further down the priority list.
Succession planning does not need to be addressed in isolation from other HR activities and the desire to overcome these challenges may be achieved via complementary HR tools and
processes. However, dedicated succession planning software is designed to provide a holistic view of a person. Without it, HR teams are mining data from multiple sources (e.g. performance
management systems, L&D platforms etc.) to paint a picture about an individual’s capability. Technology is also making metrics easier for HR teams to access and analyse to measure the
effectiveness of their succession management processes.
Action:
● Re-assess the key drivers for succession planning within the business. For example, there may be a desire to reduce the risk of having roles vacant for an extended period, or perhaps
it’s about enhancing employee engagement by providing career pathways. These drivers are often not unique to succession – there may be similar drivers behind the desire to enhance
performance management and professional development.
● Evaluate the critical roles that could benefit from a succession plan and review the development opportunities on offer to prepare people for these roles. Consider how a succession
management process could improve engagement and retention. Instead of launching complex, all-encompassing succession plans, starting with simple solutions (including building
career path conversations into performance appraisals) may be sufficient in the short term, or until the economy shores up again.
Overall, how would you rate your organisation's SMB Mid-market Enterprise
Junior to Mid-level Senior C-suite
internal systems and processes for efficiently and Overall Australia New Zealand
mid-level management management leaders
effectively managing succession planning? (1 - 199) (200 - 1999) (2000+)
Excellent 3% 3% 0% 2% 8% 3% 2% 4% 2% 0%
Average 30% 23% 29% 33% 31% 31% 26% 30% 31% 30%
Poor 28% 26% 28% 29% 27% 28% 28% 29% 26% 28%
Very poor 18% 21% 22% 15% 16% 18% 20% 13% 24% 25%
Monica
ELMO Watt
SOFTWARE
| ELMO| CLOUD
2021 |HRUnclassified
& PAYROLLPublic
| 2018 216
Learning & development key challenges
Summary: What are your organisation's key learning & development (L&D)
Learning & development remains a focus for many organisations. Earlier in this challenges?
report, when asked about the top challenges for the next 12 months, 26% of
respondents said upskilling, cross-skilling or reskilling employees was high on the Lack of budget / funding 42%
list. Leadership development was also rated highly, indicating that professional 43%
development in general is high on corporate agendas. In terms of challenges, Lack of resources 28%
‘lack of budget / funding’ saw a slight decline compared with 2019. Just under half 36%
of enterprise respondents (48%) said ‘lack of budget / funding’ was their top Aligning training with corporate goals 27%
challenge, compared with 46% of mid-market respondents and 39% of SMB 27%
respondents. More significant was the reduced number of respondents who cited
Lack of senior leadership buy-in 25%
‘lack of resources’ as a challenge. This was cited by 28% of respondents in 2020 24%
vs. 36% in 2019. Other challenges, including difficulty scaling, low learner 23%
Low learner engagement
engagement and lack of leadership buy-in, saw slight increases. 18%
Providing access to learning content 22%
Insight: 21%
Organisations had to dramatically re-evaluate priorities in 2020 as they faced Difficulty demonstrating the ROI of training 22%
25%
new challenges and were more focused on short-term solutions. This was not
surprising, given the uncertainty experienced by most businesses and the wider Finding the right external partners 19%
economy throughout 2020. 21%
Meeting compliance obligations 18%
With workforce downsizing a sad reality in many workplaces in 2020, many 18%
employees had to take on new responsibilities, which may have required them to Training program logistics 18%
upskill or reskill. Many employees are likely to have been seeking opportunities 23%
to upskill or re-skill in 2020 as a result of workforce downsizing, causing some
Difficulty scaling 10%
employees to take on new responsibilities or to shift their focus from looking for 9% 2020 (n = 729)
promotion opportunities to simply holding onto their jobs. In addition, some 6%
None - we have no challenges
learning was driven by compliance obligations, for example, around health and 6% 2019 (n = 595)
safety in a COVID-19 world.his has implications for how organisations resource
and plan learning. I don't know 5%
5%
With just under a quarter of respondents selecting ‘low learner engagement’ as a challenge, employers should be attempting to
assess and improve learner engagement. While there are many elements that impact learner engagement (e.g. instructor
competence, intuitive course design, etc.), low engagement may also suggest issues unique to virtual learning delivery. With
face-to-face learning it’s much easier to look around a room, gauge engagement and make changes. In a virtual learning world,
this is challenging but not impossible. Surveys conducted following a learning initiative are a good way to assess its value and
gather feedback.
1 in 4 respondents are still challenged Finally, the impact and value of learning is being re-evaluated and this is generating new expectations. For example,
organisations are likely looking at metrics such as productivity improvements as a result of any learning initiatives undertaken.
by a lack of leadership buy-in
Action:
● Maintain focus. The PwC CEO Survey, 2020 indicated that 78% of CEOs believe the availability of key skills is a top
threat to growth. Therefore, a continued focus on building a skilled workforce that can drive and deliver what the
organisation needs is a key part of sustaining operations through challenging periods.
● Adopt new learning modes. Learner engagement must be prioritised in a hybrid work environment. A LinkedIn report
suggested that learners engage in the following ways:
- 52% at the point of need
- 47% in the evenings and weekends
- 42% at the office desk
3 in 7 respondents are still challenged - 30% when alerted to updates
by a lack of budget or funding - 27% on the way to and from work
● Assess impact. Learning modes are changing and organisations will need to improve how they measure and
understand impact so that they can make the smartest choices around the tools and platforms implemented.
Aligning training with corporate goals 27% 34% 28% 27% 22% 26% 29% 25% 29% 30%
Difficulty demonstrating the return on
22% 23% 20% 24% 20% 23% 17% 20% 23% 30%
investment (ROI) of training
Difficulty scaling 10% 11% 11% 10% 9% 10% 12% 9% 11% 12%
Finding the right external partners 19% 19% 15% 20% 20% 19% 16% 22% 15% 13%
Lack of budget / funding 42% 37% 47% 35% 48% 41% 45% 39% 46% 48%
Lack of resources 28% 21% 32% 27% 31% 29% 23% 25% 33% 31%
Lack of senior leadership buy-in 25% 25% 32% 25% 17% 24% 25% 23% 27% 28%
Low learner engagement 23% 24% 34% 17% 21% 23% 23% 21% 27% 22%
Meeting compliance obligations 18% 18% 18% 17% 21% 19% 17% 16% 19% 31%
Providing access to learning content 22% 18% 20% 23% 24% 22% 20% 20% 25% 21%
Training program logistics 18% 12% 18% 17% 23% 19% 13% 16% 22% 21%
What are your organisation's key learning & Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
development (L&D) challenges?
n = 297 n = 131 n = 123 n = 43 n = 432 n = 273 n = 135 n = 24
Aligning training with corporate goals 23% 31% 31% 33% 30% 22% 27% 25%
Difficulty demonstrating the return on investment
21% 31% 29% 28% 22% 14% 18% 33%
(ROI) of training
Difficulty scaling 9% 14% 12% 14% 11% 7% 10% 8%
Finding the right external partners 18% 35% 17% 12% 19% 15% 13% 17%
Lack of budget / funding 36% 55% 47% 42% 46% 31% 44% 58%
Lack of resources 22% 32% 33% 21% 33% 22% 33% 50%
Lack of senior leadership buy-in 25% 33% 25% 28% 24% 18% 28% 29%
Low learner engagement 25% 29% 33% 16% 22% 17% 21% 33%
Meeting compliance obligations 20% 18% 15% 28% 18% 15% 22% 38%
Providing access to learning content 15% 23% 25% 14% 27% 19% 25% 33%
Training program logistics 16% 22% 20% 19% 20% 12% 23% 25%
None - we have no challenges 8% 11% 6% 2% 5% 5% 6% 0%
I don't know 4% 6% 2% 9% 5% 4% 3% 21%
75%
Face-to-face learning (internal)
81%
60%
Face-to-face learning (external)
70%
58%
eLearning courses (internal)
54%
58%
eLearning courses (external)
48%
32%
Virtual classrooms
15%
2020 (n = 714)
10% 2019 (n = 586)
Massive open online courses (MOOCs)
9%
3%
I don't know
2%
Summary:
Compared with data from 2019, internal face-to-face delivery declined by 6 percentage points; similarly, external face-to-face
delivery fell by 10 percentage points. This contrasts to the rise in virtual classrooms, which increased by 17 percentage points.
Both internal and external eLearning course delivery also showed increases. There is a geographic difference in the use of
virtual classrooms in the use of virtual classrooms in New Zealand (17%) vs. Australia (35%) – indeed, Australia appears to have
adopted all forms of eLearning much more than New Zealand.
Insight:
3 in 4 respondents use face-to-face
COVID-19 saw a significant shift in how, where and when work was undertaken. Many employees were forced to work from
learning (internal) home and many employers adopted hybrid work models, with some employees working on premises and others continuing to
work from home. It’s also likely that these survey results reflect the wider adoption of independent learning strategies whereby
employees undertake learning as and when they desire it – which is only possible via eLearning solutions. Research from Grant
Thornton suggests that eLearning will boom in the COVID-19 recovery phase, thanks in part to the rise in mobile platforms,
gamification, 3D environments, social learning, data analytics and artificial intelligence.
It’s likely that a blended approach to learning catering to both on and off-site will continue. While the implementation of
learning & development technology does not reduce the need for face-to-face learning delivery, it means a multi-modal or
blended approach is required to engage people with learning. This in itself requires some adjustments to learning delivery.
Action:
6 in 10 respondents use eLearning courses
● Adopt and adapt to new learning methods. For example, video-conferencing tools should be utilised to ensure face-to-
(internal and external) face learning continues, regardless of where employees are based. Blended learning requires the facilitator to have
experience or knowledge in inclusive delivery i.e. talking to the camera to make eye contact with those on screen and
using interactive tools like breakout rooms.
● Consider using a Learning Management System (LMS), as this can help facilitate blended learning. For example, an
LMS can be used to deliver pre-course and course content, and then be used to schedule in-person training sessions
(virtually, if not in the same location) to share experiences with and through others.
Virtual classrooms 32% 33% 32% 31% 33% 35% 17% 23% 44% 43%
Face-to-face learning (internal) 75% 74% 74% 77% 72% 75% 70% 70% 79% 83%
Face-to-face learning (external) 60% 60% 59% 63% 58% 61% 55% 57% 63% 71%
Massive open online courses (MOOCs) 10% 8% 10% 11% 11% 11% 5% 10% 11% 11%
eLearning courses (internal) 58% 66% 61% 58% 52% 61% 43% 46% 71% 85%
eLearning courses (external) 58% 56% 55% 62% 57% 59% 51% 58% 58% 57%
I don't know 3% 5% 2% 3% 4% 3% 6% 4% 2% 0%
How is learning & development (L&D) delivered in your Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
organisation?
n = 293 n = 130 n = 121 n = 42 n = 421 n = 266 n = 132 n = 23
Virtual classrooms 40% 28% 50% 50% 27% 20% 39% 30%
Face-to-face learning (internal) 80% 79% 80% 83% 71% 65% 79% 83%
Face-to-face learning (external) 63% 60% 65% 67% 58% 55% 61% 78%
eLearning courses (internal) 75% 62% 86% 88% 46% 38% 58% 78%
eLearning courses (external) 65% 67% 64% 62% 53% 53% 52% 48%
I don't know 0% 0% 0% 0% 5% 6% 5% 0%
What are the most common courses (by volume) undertaken by your employees?
In terms of the courses being undertaken, ‘technical skills / certifications’ rose from 48% in 2019 to 55% in 2020. ‘Workplace health and safety (WHS)’ also increased from 48% to 52%, with mid-level managers
in particular focused on this area. There was a slightly stronger focus on ‘productivity’ (5% in 2019 vs. 8% in 2020) and ‘ethics and conduct’ (22% in 2019 vs. 25% in 2020). ‘Business management’ also increased
6 percentage points.
Insight:
There has been a subtle shift over the last year in the skills people want to develop through work-related learning. For employers, 2020 was not just about meeting compliance obligations but also about
maintaining motivation and productivity while remote working. It’s interesting to note that ‘compliance’ training only rose marginally, as COVID-19 no doubt resulted in more ‘tick the box’ L&D activities in 2020
that didn’t previously exist, for example, raising COVID-19 awareness and practical courses such as how to wash hands properly, etc. It’s possible this unexpected training is reflected in the increase in
‘workplace health and safety (WHS)’ courses in 2020. The data indicates that WHS training has been undertaken by employees at all levels, but mid-level management have taken the lead. This is not
surprising, as they have had to manage remote employees and ensure their health and safety is maintained.
Other research backs up the rise of holistic health being a concern for employers. MetLife’s 2020 Employee Benefits Trends study, which compared employee wellbeing both before and during COVID-19, found
that stress and burnout were the biggest concerns for employees. It also found that frequent feelings of stress and burnout directly resulted in a 73% decline in productivity, engagement and loyalty.
The increased focus on areas such as ‘technical skills / certifications’ and ‘business management’ also reflects that in some ways 2020 provided more opportunities for employees to undertake learning they
may have previously delayed. Given the new working conditions many employees found themselves in during the year – for example, remote working – they may have been more open to undertaking
eLearning without having to deal with the distractions of the workplace and the commute to and from work. Research by Josh Bersin suggests that although people may be time poor and may struggle to find
the time for formal learning, informal learning done during the course of the work day will continue to rise.
Action:
● Don’t lose sight of the bigger picture. While it makes sense that learning should be used to address immediate concerns, longer term issues such as change management and project management
should not be dropped. These are key areas that will require development in the coming 12 months and beyond.
● Redefine ‘critical roles’ and the skills needed for those roles. Gartner research suggests that before COVID-19, critical roles were viewed as roles with critical skills, or the capabilities an organisation
needed to meet its strategic goals. While this is still the case, employers now realise there is another category of critical roles: those that are crucial to the success of essential workflows. For example,
IT admin skills may not be central to an organisation’s core business, but are critical to supporting a remote or hybrid workforce. Leaders will need to develop succession plans and appropriate training
for these business-critical roles in the future.
● Maintain the focus on WHS, as well as employee wellbeing. There has been a major increase in wider community talk as well as research about mental health, and it seems today employers are more
willing to provide support for employees who are struggling with this. It has become an ethical issue – see more in this article citing Gartner research.
Business management 14% 10% 14% 13% 17% 14% 13% 14% 15% 11%
Compliance 45% 43% 46% 51% 41% 47% 37% 40% 52% 54%
Customer service 20% 15% 22% 20% 22% 20% 19% 21% 19% 22%
Equal employment opportunity (EEO) 17% 15% 19% 19% 14% 20% 2% 14% 20% 29%
Ethics and conduct 25% 22% 27% 26% 22% 26% 15% 20% 26% 45%
Finance 8% 11% 8% 6% 6% 8% 5% 9% 6% 3%
Induction 45% 38% 50% 52% 36% 45% 40% 39% 52% 46%
Sustainability 2% 3% 1% 4% 3% 2% 2% 3% 2% 3%
Technical skills / certifications 55% 44% 55% 61% 53% 54% 61% 56% 56% 43%
Workplace health and safety (WHS) 52% 50% 57% 52% 49% 52% 52% 48% 57% 62%
Which metric(s) does your organisation use to measure the effectiveness of its learning & development
(L&D) activities?
Training completion rates continue to be the most widely used measure of effectiveness for training; however, even this form of measurement declined in 2020 by 3 percentage points. Other declines included
‘meeting compliance obligations / targets’ and ‘percentage of employees trained / certified’. It’s worth noting that organisations with a fully implemented technology solution saw close to a 15 percentage point
increase in the use of training completion rates as a metric. In most instances, especially for SMB and mid-market respondents, the use of metrics increased for those with fully implemented technology. Just
under a third of all respondents (29%) still do not use any metrics to measure the effectiveness of learning & development initiatives.
Insight:
It’s significant that such a high percentage of respondents do not use any metrics to assess learning effectiveness. Indeed, the only areas to see a slight increase in 2020 were metrics related to employee or
team engagement. This suggests there is recognition that investing in employees’ skills has a direct contribution to the overall health of an organisation. It could also be a recognition that informal learning –
particularly learning on the job – cannot be assessed by traditional measures alone. Like any other area of business operations, using metrics to prove the value of learning will be essential to future investment.
However, 2018 research found that only 8% of CEOs report that they see the business impact of L&D programs, and just 4% see the ROI. Data released by LinkedIn in May 2020 revealed that CEOs were actively
championing learning programs 43% more than they did in 2019. Ongoing support of such programs will be dependent on leaders receiving a holistic view of learning – and that includes basic metrics.
Wider metrics relating to productivity and engagement may be more challenging to link specifically to learning interventions, as there will be other elements to consider in gauging success in these areas, but
this will improve as more sophisticated data analysis and ‘cross-pollination’ of data sets takes place. Technology such as a Learning Management System (LMS) can provide easy access to data so that
organisations can keep track of overall learning impact.
Action:
● Ensure that your organisation has an effective means of evaluating the effectiveness of learning & development activities. There are many tools you can use for this. One example is the framework
provided by the Kirkpatrick Model created in 1958 introduced four key ways to assess the impact of learning, all of which still resonate today. In summary:
- Reaction: What the learner’s thoughts, feelings and opinions are regarding the training.
- Learning: The increase in the learner’s knowledge and skill.
- Behavioural change: The level of change in the learner’s behaviour in the workplace.
- Results: The overall change in the organisation due to training.
- Potential payoff: A few years after it was first introduced, the Kirkpatrick model was extended to include a fifth level of measurement. This ties the potential payoff (i.e. the return on investment) to
the outcomes of a training program. It was an acknowledgement that linking training outcomes to business goals was critical.
● When assessing online learning, consider these metrics: course completions, learner satisfaction surveys, minutes of learning completed per employee per month, repeat visits to the LMS per month,
qualitative feedback about behavioural change.
Meeting compliance obligations / targets 33% 32% 32% 33% 33% 33% 32% 27% 38% 46%
Percentage of employees trained / certified /
29% 23% 29% 31% 29% 29% 27% 24% 32% 46%
etc.
Training completion rates 35% 37% 39% 33% 32% 36% 29% 24% 43% 62%
Training cost per employee 16% 13% 14% 17% 19% 17% 11% 15% 15% 26%
None - we don't use any metrics 29% 24% 28% 31% 31% 29% 30% 35% 25% 9%
Which metric(s) does your organisation use to measure Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
the effectiveness of its learning & development (L&D)
activities? n = 391 n = 392 n = 393 n = 394 n = 395 n = 396 n = 397 n = 398
Improvement in individual engagement / productivity 25% 32% 21% 12% 20% 22% 17% 9%
Improvement in overall employee engagement /
27% 32% 26% 12% 19% 19% 20% 9%
productivity
Improvement in team engagement / productivity 22% 27% 21% 12% 15% 14% 19% 9%
Knowledge achieved (via formal exams) 15% 17% 13% 14% 8% 7% 10% 9%
Meeting compliance obligations / targets 40% 34% 45% 43% 28% 24% 31% 52%
Percentage of employees trained / certified / etc. 38% 35% 39% 43% 23% 18% 27% 52%
Training completion rates 48% 38% 55% 60% 25% 18% 33% 65%
Training cost per employee 19% 20% 18% 21% 14% 13% 13% 35%
None - we don't use any metrics 18% 22% 17% 10% 37% 42% 32% 9%
Overall, how would you rate your organisation's SMB Mid-market Enterprise
internal systems and processes for efficiently Junior to Mid-level Senior C-suite
Overall Australia New Zealand
and effectively managing learning & mid-level management management leaders
development (L&D) for all employees? (1 - 199) (200 - 1999) (2000+)
Excellent 7% 10% 5% 6% 9% 7% 9% 7% 8% 6%
Good 27% 22% 31% 28% 26% 27% 27% 27% 29% 23%
Average 40% 41% 42% 35% 43% 39% 44% 40% 39% 42%
Poor 17% 14% 13% 23% 15% 17% 14% 19% 15% 14%
Very poor 7% 7% 7% 7% 6% 7% 2% 6% 7% 8%
I don't know 2% 6% 2% 1% 1% 2% 3% 2% 2% 8%
Summary:
While 34% of overall respondents rated their internal systems and processes as good or excellent, the remainder rated them as average or worse. Slightly more SMBs rated their systems and
processes as poor (19%) or very poor (6%), while mid-market respondents were more content, with the highest number of respondents rating their systems and processes as good (29%) or excellent
(7%). There were expected disparities by industry. ‘Electricity, gas, water and waste services’ (18%) and ‘construction’ (19%) gave the lowest ratings (‘very poor’). Industries with the highest ratings
(‘excellent’) were ‘accommodation and food services’ (17%) and ‘professional, scientific and technical services’ (13%).
Insight:
Clearly, work still needs to be done to ensure the learning needs of employees are being addressed. This general dissatisfaction is reflected in other industry research. PwC’s ‘New World. New Skills’
survey for example showed that 69% of employees are prepared to learn new skills or completely re-train in order to improve their future employability. However, only 23% were upskilling through
their employer.
When it comes to professional development, HR is caught in the middle. Gartner research from 2020 indicates that 60% of HR leaders report pressure from the CEO to ensure employees have the skills
needed in the future. At the other end of the spectrum, compared with three years ago, 69% of HR executives report more pressure from employees to provide development opportunities that will
prepare them for future roles.
Apart from ‘accommodation and food services’, which appeared in both the lowest and highest ratings, the industries with the lowest ratings have a large percentage of workers that would primarily be
on site and have limited time and access to the resources needed to complete learning-related tasks. The highest rated industries have a large percentage of workers who are desk-bound and can
undertake learning from anywhere at any time; however, eLearning via mobile or tablet could still be effective for geographically dispersed blue-collar workers.
Action:
● Survey employees about the learning opportunities they would like to see, how learning should be delivered, and the variety of topics or subjects that need to be offered. The World Economic
Forum’s Future of Jobs Report, released in October 2020, suggested that 50% of all employees will need reskilling by 2025, as adoption of technology increases. However, while technical skills
remain critical, soft skills – perhaps more accurately described as ‘essential skills’ – should also be prioritised. The World Economic Forum’s report showed that employers believe critical
thinking and problem-solving skills will grow in prominence in the next 5 years, while newly emerging skills in 2020 included active learning, resilience, stress tolerance and flexibility.
● Wherever possible, ensure learning is tablet and mobile friendly. This allows for learning on the go and is ideal for hybrid workforces split between the physical workplace and the home.
I don't know 2% 1% 1% 7% 3% 2% 3% 9%
Compliance-related activities 6 6 6 6 5 5 8 5 5 11
Reporting 4 5 5 4 4 4 8 4 4 9
Note: This question asked respondents to provide values relating to several aspects of the learning & Lowest
Saturation segment scale: Highest
development process. The number of respondents listed for each column in the table above refers
average average
to the average number of people who provided an answer for these questions, as some
respondents may not have answered all questions. value value
Compliance-related activities 2 4 2 2 2 2 5 2 2 5
Reporting 2 2 2 2 2 2 2 2 2 5
Note: This question asked respondents to provide values relating to several aspects of the learning &
Lowest
Saturation segment scale: Highest
development process. The number of respondents listed for each column in the table above refers
to the average number of people who provided an answer for these questions, as some respondents median median
may not have answered all questions. value value
Note: This question asked respondents to provide values relating to several aspects of the learning Lowest
Saturation segment scale: Highest
& development process. The number of respondents listed for each column in the table above
refers to the average number of people who provided an answer for these questions, as some average average
respondents may not have answered all questions. value value
Note: This question asked respondents to provide values relating to several aspects of the learning
Lowest
Saturation segment scale: Highest
& development process. The number of respondents listed for each column in the table above
refers to the average number of people who provided an answer for these questions, as some median median
respondents may not have answered all questions. value value
Summary:
Employees undertake a median of 4 days per year of learning across all business sizes, with enterprise businesses undertaking slightly more at 5 days and mid-market organisations slightly less at 3
days. However, it costs enterprise businesses more than 5 times more per employee compared to their smaller counterparts. This may be a reflection of the amount of on-the-job training undertaken
in smaller businesses, which may negate the need for ‘formal’ learning. The median annual cost spent on training per employee in Australia is $1500 and in New Zealand it’s less at $1000.
Insight:
Benchmarking against industry peers in relation to time and cost spent on training per year is an invaluable way to understand how an organisation measures up. It can also help to identify what they
need to focus on to remain up to date and competitive.
The comparatively high cost of training in enterprise businesses perhaps reflects the fact they have dedicated in-house resources to facilitate and provision training. SMBs and mid-market
organisations will tend to outsource these roles. This cost blowout for enterprise organisations is perhaps also indicative of the challenges relating to cost-effective scaling up to suit a larger
population. It’s also worth considering if enterprise respondents are simply more likely to track cost closely and have the tools, resources and functionality to do so. For all organisations regardless of
size, learning technology provides access to metrics, making assessment of time and money spent on training much easier.
There were also anticipated variations between industries, with some committing more days to learning & development than others. For example, at the upper end of the spectrum is ‘agriculture,
forestry and fishing’ (8 days), while ‘construction’ and ‘wholesale trade’ are at the lower end (2 days).
Action:
● Determine what learning initiatives will produce the best outcomes for employees and the business. In terms of the results of this survey, a median of 4 days is spent on training per person
per year. Do those 4 days present the best value for money? Perhaps there are smarter ways to deliver learning, or different subjects required to best meet the evolving needs of employees
and the organisation. It’s also worth considering the Pareto principle, which states that 80% of gain comes from 20% effort – so make sure that 20% of learning effort truly improves learners’
skills in terms of outcomes such as productivity, engagement, and so on.
● Consider other ways to improve the ROI of learning. Only 25% of respondents to a survey by McKinsey said that training measurably improved performance. However, simple tips such as
getting leaders on board, reinforcing new skills in the workplace and measuring the impact of learning via participant feedback can improve the ROI of learning.
● Doing more with less requires careful planning and budgeting. Instead of rigidly scheduled formal learning, consider if informal learning, delivered in bite-sized chunks on a daily or weekly
basis, or mentoring or coaching might be more effective and cost-effective.
Monica
ELMO Watt
SOFTWARE
| ELMO| CLOUD
2021 |HRUnclassified
& PAYROLLPublic
| 2018 240
R&R technology
% of organisations with fully implemented R&R technology
73%
58% 58% 61%
39% 38% 48%
37% 30%
23% 26% 25%
SMB Mid-market Enterprise Overall % who said R&R was a high or medium % who have budget allocated for R&R
priority
2019 2020 2019 2020
Summary:
In comparison to all other types of HR technology, rewards & recognition (R&R) technology experienced the largest growth in implementation from 2019 to 2020. Implementation levels grew from 25% to
39%, an increase of 56%. This trend was seen across all organisation sizes but was especially apparent for enterprise organisations. If the number of respondents with fully implemented R&R technology is
added to the number of respondents who said they were currently implementing or planning to implement R&R technology within 12 months, it can be projected that 69% of organisations will have
implemented R&R technology by the end of 2021 (based on 2020 data).
While the priority level of R&R did not change at all between 2019 and 2020, the availability of budget still increased from 61% to 73%. This means that 3 in 4 organisations will be investing (or continuing to
invest) in R&R in 2021.
Insight:
These results indicate that senior leadership buy-in to the concept of R&R is reaching a point where R&R is being viewed as a fundamental part of managing people and an important component of a
successful culture. Just a few years ago, HR was still struggling to get senior leadership buy-in for R&R programs. As initiatives like employee feedback surveys saturated the market and became one of the
key measurements of an engaged and motivated culture, so too did the awareness that R&R was one of the most influential drivers of engagement. In simple terms, “just making people feel valued” is one
of the most basic building blocks of any type of relationship, be it professional or personal.
Action:
● Consider building a genuine, meaningful relationship with your employees by implementing an R&R program. Employers who want highly engaged workforces need to start viewing the connection
between employer and employee as more than a contract to perform certain tasks for money. The employer-employee relationship must be built on mutual trust and respect. Take the time to
understand what motivates and drives employees – and then build an R&R program that capitalises on these insights by offering personalised rewards.
● R&R programs don’t need big budgets. Don’t underestimate the motivational power of a simple ‘thanks for a job well done’ from a manager.
What kinds of rewards and recognition programs does your organisation currently have in place?
Summary:
The three most common types of R&R programs used across Australia and New Zealand were: recognition of tenure / work anniversaries, informal / ad-hoc types of recognition, and peer
nomination awards. The ranking of these 3 programs was the same as 2019. Whilst ad hoc types of recognition were equally common for organisations of all sizes, the use of tenure anniversaries
and peer nomination programs was significantly more prevalent for mid-market and enterprise organisations.
The strongest emerging trend was the use of ‘employee of the week / month / quarter’, which increased by 8 percentage points to 24%. The use of these programs was slightly more widespread
amongst larger organisations, but only marginally.
1 in 7 SMB organisations do not have any form of R&R program in place, in comparison to roughly 1 in 10 mid-market or enterprise organisations. Respondents using R&R technology were more
likely to have formal R&R programs in place, especially mid-market and enterprise organisations. Organisations without technology leaned more on informal / ad hoc forms of R&R.
Insights:
The rising popularity of ‘employee of the week / month / quarter’ initiatives was the most noteworthy development because this type of recognition program often takes minimal effort to
implement and has a high level of visibility amongst employees. The key challenge when implementing this type of program is making sure it is seen as fair and not rigged by favouritism. If an
R&R program is deemed unfair, then the program can do more damage than good to employee morale, so it is critical to design a program that makes the nomination and selection criteria
completely transparent and equally available to all employees. Many ‘employee of the week / month / quarter’ programs are run off the back of peer-to-peer recognition programs, where leaders
select winners based on the volume or quality of peer nominations.
Actions:
● Consider how technology can assist with R&R programs. Technology supports a variety of R&R programs by making the process of nominating and selecting employees for recognition
more streamlined, consistent, and transparent. Technology can also automate some types of recognition – e.g. notifications about nominations and / or selections, sending “thank you”
and “congratulations” emails on certain dates, etc.
● Beyond technology, effective recognition will always come down to authentic human praise. This ultimately places accountability back on managers and leaders.
● HR teams need to invest time into coaching managers and leaders about the types of recognition available to them and how different types of recognition will motivate people. A
personalised approach (e.g. publicly, privately, verbally, with incentives etc.) can produce better results.
Achieving KPIs 26% 28% 21% 28% 27% 26% 29% 26% 27% 28%
Employee of the month / week / quarter 24% 22% 23% 23% 27% 24% 21% 20% 27% 33%
Incentive programs 28% 26% 29% 27% 30% 29% 23% 24% 33% 40%
Informal / ad hoc 41% 46% 38% 41% 43% 40% 52% 42% 41% 40%
Learning & development completion 16% 18% 14% 19% 14% 17% 12% 17% 16% 14%
Peer nomination awards 40% 52% 42% 38% 35% 40% 40% 31% 50% 61%
Sales quota achievement 18% 12% 13% 20% 21% 18% 19% 18% 19% 14%
Tenure / work anniversaries 51% 64% 48% 49% 49% 51% 52% 42% 62% 60%
None - we have no formal programs in place 13% 10% 15% 10% 15% 13% 8% 15% 9% 11%
I don't know 2% 5% 2% 1% 0% 2% 1% 3% 1% 0%
Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
What kinds of rewards and recognition programs does
your organisation currently have in place?
n = 249 n = 138 n = 81 n = 30 n = 383 n = 211 n = 145 n = 27
Achieving KPIs 33% 34% 32% 30% 22% 20% 23% 26%
Employee of the month / week / quarter 29% 23% 35% 43% 20% 18% 23% 22%
Incentive programs 32% 28% 38% 37% 26% 21% 30% 44%
Informal / ad hoc 38% 40% 40% 27% 43% 43% 42% 56%
Learning & development completion 20% 21% 21% 17% 14% 15% 13% 11%
Peer nomination awards 49% 44% 54% 60% 34% 22% 47% 63%
Sales quota achievement 21% 22% 20% 17% 16% 15% 18% 11%
Tenure / work anniversaries 54% 47% 64% 60% 49% 39% 61% 59%
I don't know 2% 4% 1% 0% 1% 2% 1% 0%
Summary:
Inconsistency in how recognition is given or applied to formal programs was by far the greatest challenge when it came to R&R in 2020. 1 in 3 SMB respondents found this challenging, but this
challenge was cited more often by larger organisations. 1 in 2 mid-market and 3 in 5 enterprise organisations said inconsistency was a challenge for them.
Enterprise organisations were also more challenged by the need to provide timely recognition, low engagement with R&R programs, the R&R of high performers, and giving personalised forms of
R&R. These results were not surprising because very large organisations are trying to scale R&R programs that need a certain level of personalisation and authenticity to be truly successful.
Roughly 1 in 3 organisations said a lack of budget was a key challenge for them. This ratio did not vary by organisation size.
Insights:
Whilst employee expectations around appreciation and recognition are nothing new, the way in which recognition is delivered has to meet the needs of the workforce that exists today. In 2020,
50% of the global workforce are Millennials (those born between 1980 and 2000), who are more accustomed to receiving instantaneous, high-frequency and individualised feedback. This has led
to a greater number and variety of recognition tools being made available to managers. While recognition ultimately falls under the remit of managers and leaders, it’s HR’s role to provide the
tools to support this process and guidance to managers about how to utilise these tools effectively. The types of recognition appreciated by a Millennial is likely to be very different to a Baby
Boomer (those born between 1946 and 1964). For this reason, consistency across departments and managers is always going to be a challenge, but it is not insurmountable. It’s more critical to
have overarching processes and mechanisms that are transparent and consistent, and managers who are coached on how to give recognition fairly and within the context of the organisation’s
desired outcomes. After all, there is only so much that HR can control beyond the systems and processes put in place.
Actions:
● Consider the culture that your organisation wants to develop and what outcomes are expected before designing and implementing any form of R&R program. Implementing ‘out of the
box’ R&R programs via technology may not have the desired outcomes if the impact on culture and perceived fairness has not been considered first.
● Ensure the foundations of robust communication and manager / leader coaching plans are in place. These are vital to ensure that R&R programs are viewed as authentic and fair, and not
tokenistic. The value of verbal praise and appreciation cannot be understated and sometimes the greatest value an organisation can gain comes from coaching leaders on how to give
authentic recognition in a timely manner.
● Remember that recognition does not have to be done in isolation from other HR activities. For example, a good performance management conversation will recognise the areas that an
employee or team are doing well and can also be used to provide constructive feedback about areas where further development is needed. A balance of praise and ideas to develop
further can be the perfect formula to drive higher levels of engagement.
Discretionary effort is not recognised or rewarded 28% 25% 31% 30% 24% 28% 25% 22% 35% 39%
High performers are not recognised or rewarded 24% 18% 28% 27% 20% 25% 14% 20% 25% 44%
Inconsistency (e.g. across managers, departments, etc.) 43% 42% 46% 46% 39% 44% 37% 34% 53% 60%
Lack of budget 32% 30% 35% 30% 33% 32% 36% 30% 37% 30%
Lack of insight into what rewards employees would
28% 21% 28% 34% 24% 28% 27% 26% 30% 37%
value
Lack of peer-to-peer recognition 18% 14% 21% 19% 17% 19% 15% 16% 18% 32%
Lack of personalised rewards & recognition 27% 33% 27% 31% 21% 27% 29% 25% 27% 44%
Lack of resources 18% 20% 21% 17% 15% 18% 14% 14% 21% 23%
Lack of time 12% 12% 11% 11% 14% 13% 4% 11% 12% 18%
Low engagement with program 19% 21% 21% 19% 17% 20% 12% 16% 18% 40%
Over-reliance on financial reward 22% 16% 20% 24% 24% 21% 27% 20% 26% 18%
Recognition is not timely 24% 20% 22% 26% 25% 25% 18% 18% 27% 46%
None - we have no challenges 10% 10% 9% 7% 14% 9% 12% 13% 5% 4%
I don't know 5% 8% 4% 5% 4% 5% 7% 6% 4% 2%
Has fully implemented technology Does not have fully implemented technology
Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
What are your organisation's key rewards & recognition
challenges?
n = 249 n = 138 n = 81 n = 30 n = 383 n = 211 n = 145 n = 27
Discretionary effort is not recognised or rewarded 18% 13% 23% 27% 34% 27% 41% 52%
High performers are not recognised or rewarded 17% 13% 17% 33% 29% 25% 29% 56%
Inconsistency (e.g. across managers, departments, etc.) 37% 30% 46% 47% 47% 37% 57% 74%
Lack of budget 28% 26% 33% 23% 35% 32% 39% 37%
Lack of insight into what rewards employees would value 19% 17% 21% 20% 34% 31% 34% 56%
Lack of peer-to-peer recognition 12% 10% 14% 17% 22% 20% 21% 48%
Lack of personalised rewards & recognition 20% 17% 22% 33% 32% 30% 30% 56%
Lack of resources 12% 10% 17% 7% 21% 17% 23% 41%
Lack of time 8% 7% 10% 10% 15% 14% 13% 26%
Low engagement with program 23% 19% 20% 50% 16% 14% 17% 30%
Over-reliance on financial reward 20% 17% 25% 17% 23% 21% 26% 19%
Recognition is not timely 20% 14% 23% 37% 26% 21% 29% 56%
None - we have no challenges 13% 19% 6% 3% 8% 10% 5% 4%
I don't know 4% 5% 2% 3% 5% 7% 4% 0%
Saturation map scale:
Lowest Highest
value value
In your opinion, what is the level of value that Senior Management (e.g. CEO, Directors) places on recognition
programs?
8%
Very high
12%
34%
High
28%
36%
Neutral
33%
16%
Low
18%
2020 (n = 632)
5% 2019 (n = 532)
Very low
9%
Summary:
In 2020, roughly 2 in 5 respondents said their senior leaders placed a high or very high value on R&R programs in
comparison to 1 in 3 back in 2019. In addition, 1 in 3 respondents said their senior leaders placed a neutral value on R&R
programs – this ratio is unchanged since 2019. Also of note, 1 in 5 respondents said their senior leaders placed a low or very
low value on R&R programs in comparison to 1 in 4 back in 2019. These results show that senior leadership support for R&R
programs increased between 2019 and 2020.
2 in 5 respondents said their senior Insights:
management team placed ‘high’ or ‘very high’
value on recognition programs One of the main reasons senior leaders do not buy into the value of R&R programs is the difficulty in demonstrating return
on investment. It can be difficult for HR teams to secure the funding they need for an R&R program, especially when they
are competing with other departments and projects for funding. However, these results clearly show that HR teams are
having more success getting senior leaders on board, because there were twice as many respondents who said their leaders
placed a high or very high value on R&R than respondents who said their leaders placed a low or very low value on it.
Research from multiple sources demonstrates the value of investing in R&R. For example, this report from Deloitte shows:
● Organisations with recognition programs in place see 14% higher levels of employee engagement, productivity and
performance.
● A 15% improvement in engagement can result in 2% increase in margins.
● Recognition is among the top three most effective non-financial factors for retention.
High 34% 27% 31% 34% 39% 34% 32% 34% 32% 37%
Neutral 36% 39% 36% 34% 37% 36% 38% 34% 42% 30%
Low 16% 20% 21% 18% 10% 16% 16% 18% 14% 18%
Has fully implemented technology Does not have fully implemented technology
In your opinion, what is the level of value that Senior Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
Management (e.g. CEO, Directors) places on
recognition programs? n = 249 n = 138 n = 81 n = 30 n = 383 n = 211 n = 145 n = 27
Which metric(s) does your organisation use to measure the effectiveness of its rewards & recognition
processes?
Summary:
Overall, 1 in 2 respondents said their organisation does not use any metrics to measure the effectiveness of their R&R
program, and this ratio did not vary greatly by organisation size.
When comparing the data for the use of technology and the use of metrics, only 1 in 3 respondents using R&R
technology said they use no metrics, in comparison to 2 in 3 respondents who do not have technology. Those who use
technology utilise a very diverse range of metrics – indeed, there was no specific metric that stood out as being common
best practice.
1 in 2 of the respondents use tenure or work
anniversaries as an opportunity to reward and Insights:
recognise employees These results are somewhat concerning because the lack of metrics indicates that many HR teams do not clearly define
the expected outcomes of R&R programs before designing and implementing them, which means that they don’t
actually know what to measure. It also shows how challenging it can be for HR teams to link R&R back to business
outcomes and demonstrate the ROI. This is not helped by the fact that the metrics outlined above can be difficult to
trace back directly to an R&R program. It’s more likely that a mixture of different elements will combine to improve
employee productivity and performance for example.
Actions:
● Rewards & recognition initiatives and activities can vary immensely in format, frequency and scale. This also
means the impacts will not be centralised or translate into single metrics. Organisations can increase their
4 in 7 respondents have implemented or are awareness by firstly identifying what initiatives relate to rewards & recognition, and defining for each initiative
currently implementing rewards & recognition what a success metric may be. If these are reviewed frequently, they will help define a baseline for expectations,
technology. 1 in 7 are not even considering it especially if supported with engagement surveys, employee retention and performance metrics, and other data
sources in the organisation.
Employee participation rate 17% 14% 18% 17% 16% 18% 7% 17% 17% 14%
Employee performance 16% 9% 21% 14% 17% 16% 14% 17% 12% 18%
Employee retention 14% 12% 12% 15% 15% 14% 10% 15% 13% 11%
Manager participation rate 10% 7% 9% 10% 12% 11% 3% 10% 10% 11%
Program reach 5% 4% 4% 6% 7% 6% 0% 4% 7% 9%
None - we don't use any metrics 51% 48% 46% 52% 56% 50% 63% 52% 53% 44%
Which metric(s) does your organisation use to Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
measure the effectiveness of its rewards & recognition
processes? n = 249 n = 138 n = 81 n = 30 n = 383 n = 211 n = 145 n = 27
Employee participation rate 24% 26% 21% 23% 12% 11% 15% 4%
Employee retention 18% 20% 20% 10% 11% 11% 10% 11%
None - we don't use any metrics 34% 33% 37% 33% 63% 64% 61% 56%
Overall, how would you rate your organisation's internal systems and processes for efficiently and effectively
managing rewards & recognition?
Excellent 6%
Good 19%
Average 35%
Poor 22%
Only 1 in 4 respondents rated their R&R systems and processes as good or excellent, in comparison to 1 in 3 respondents who thought they were
poor or very poor. This means that negative ratings are outweighing the positive ratings. When comparing the data reported by organisations of
different sizes, mid-market organisations were the least satisfied, with 2 in 5 rating their systems and processes as poor or very poor.
Insights:
Whilst data presented earlier in this section showed that HR teams are steadily improving their ability to convince senior leaders of the value of
R&R programs, these results suggest there is still ample room for improvement in the R&R programs currently in place. There are a number of
reasons why R&R programs are not being used to their fullest potential:
+ ● HR teams are not clearly defining the expected outcomes from their R&R programs and are therefore unable to measure their success.
● There are interdependencies and complexities that make it hard to demonstrate the ROI, which makes senior leaders question the value
and investment into R&R programs.
● Many HR teams are potentially using ‘out the box’ vendor-designed R&R programs without considering the uniqueness of their
Over half of the respondents said organisation’s own needs and culture.
they do not use any metrics to ● Once R&R programs have been implemented, HR teams are realising that they are not being perceived as fair by some employees.
assess the effectiveness of their ● HR teams are relying too much on R&R systems and processes and not spending enough time coaching managers and leaders on how
rewards & recognition program to effectively give recognition.
Actions:
Start with the end in mind. Highlight what is important to the organisation and be very clear about what outcomes an R&R program is meant to
produce. Here are four key questions to ask:
● What does the organisation want to recognise? Tenure? Performance? Living up to and living company values?
● What behaviours does the organisation want to encourage and drive?
● What support or coaching do managers / leaders need to fully leverage the potential of the program?
● What outcomes is the organisation looking for that can be a measure of success for the program?
Excellent 6% 7% 4% 4% 10% 6% 5% 8% 3% 4%
Good 19% 22% 13% 19% 24% 20% 15% 21% 17% 23%
Average 35% 28% 42% 37% 32% 34% 44% 35% 36% 33%
Poor 22% 24% 22% 26% 17% 23% 19% 19% 28% 18%
Very poor 13% 12% 14% 11% 13% 13% 10% 12% 12% 19%
I don't know 5% 8% 4% 4% 4% 4% 7% 5% 4% 4%
I don't know 3% 4% 1% 3% 6% 6% 6% 4%
Monica
ELMO Watt
SOFTWARE
| ELMO| CLOUD
2021 |HRUnclassified
& PAYROLLPublic
| 2018 262
Remuneration & benefits key challenges
Summary:
The results of this survey indicate that key remuneration challenges are the misalignment between pay and performance, an inability to compete with external market rates, and the lack of a
structured management process. In addition, the uncertainty caused by COVID-19 has created a shift in focus, where cost-cutting to weather the storm might be undermining long-term talent
strategies and the aspirational goals associated with important issues such as gender pay equality.
Since 2019, there has been a 5 percentage point decline in the number of respondents who said a misalignment between performance and remuneration is one of their key challenges. However,
this remained a challenge for roughly 2 in 5 respondents in 2020. Misalignment between performance and pay becomes a more significant issue as an organisation increases in size: 1 in 3 SMBs
said this was a key challenge in comparison to 1 in 2 enterprise organisations.
1 in 4 organisations also said they were challenged by the lack of a structured remuneration management process.
Insight:
Staff salaries and related costs are one of the biggest expenses for any business (as much as 80% in some sectors). While salary increases have slowed in recent years, wages in Australia have
still grown in nominal terms (by up to 30% in the last 10 years) and that trend shows no sign of changing. The story is similar in New Zealand, where wage growth at the start of 2020 was at a
ten-year high, increasing 2.6% in the year to the December 2019 quarter. This means that remuneration is a significant and escalating fixed cost that can impact an organisation’s profitability and
its ability to be agile in changing circumstances.
There has always been a strong connection between performance and remuneration. However, the fact that it continues to be the most commonly reported remuneration challenge underlines
how difficult it can be to implement. While pay alone is not enough to motivate high performers, getting it wrong sends a message that will confuse or even anger employees, thwarting other
efforts to invest in people and culture.
A commitment to quality is one of the defining characteristics of highly engaged employees. Gallup research has found that employees who do not see the same level of commitment in their co-
workers can develop feelings of resentment. These employees might believe they are carrying more of the workload or producing better outcomes than their colleagues and should be paid more
as a result. The same research found that around half of employees felt they were not paid fairly in comparison to their peers. Whether this assessment is accurate or not, these feelings can
impact the engagement levels of those employees an organisation is most eager to retain.
Action:
● Connecting pay and performance does not have to be complicated. In its simplest form, it is a matter
of reviewing who is being rewarded in the organisation and assessing if they are the same people
delivering the behaviours and results the organisation is seeking to encourage. Are the highest
contributors attracting rewards that demonstrate their efforts are valued, or is the way the
1 in 10 respondents said being under budget was remuneration budget is being spent sending a message that their efforts are not appreciated?
a challenge. This was more of a challenge than ● As a minimum, organisations should aim for a certain level of remuneration and benefit ’hygiene‘,
being over budget. which essentially means setting a fair level of remuneration and benefits and ensuring these are
reviewed regularly. Employees need to be paid accurately and on time, but pay also needs to be
viewed as fair. When remuneration and benefit hygiene is not well managed it can impact employee
morale and engagement. The solution could be as simple as requiring a minimum performance
standard to qualify for additional remuneration, various incremental salary increases based on
performance, or pay variable incentives.
● The chosen remuneration approach will depend on each organisation’s circumstances. Employers
need to be mindful of what message and influence their remuneration and reward structures have.
Whether they are connected to performance, values, transparency, innovation or other drivers,
organisations need to consider what message they send. Researching the most impactful
remuneration and benefits strategy and exploring what other levers can be used to engage employees
1 in 3 respondents have no structured will ultimately help lift individual, team and organisational performance.
remuneration management process in place
Can't compete with external market rates 32% 25% 31% 30% 36% 33% 23% 27% 39% 34%
Lack of flexibility 12% 11% 13% 12% 13% 13% 4% 9% 15% 23%
Lack of transparency 20% 18% 19% 25% 16% 19% 23% 15% 23% 36%
Misalignment between performance and
37% 33% 39% 39% 35% 37% 36% 33% 41% 48%
remuneration
No structured management process 25% 24% 21% 28% 25% 26% 18% 26% 22% 27%
Remuneration budget is frequently under 11% 9% 13% 12% 9% 12% 7% 9% 12% 20%
None - we have no challenges 15% 5% 10% 17% 20% 14% 22% 18% 10% 11%
Has fully implemented technology Does not have fully implemented technology
Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
What are your organisation's key remuneration
challenges?
n = 268 n = 154 n = 94 n = 20 n = 334 n = 189 n = 121 n = 24
Can't compete with external market rates 32% 27% 44% 20% 31% 27% 35% 46%
Lack of flexibility 10% 10% 11% 15% 14% 8% 19% 29%
Lack of transparency 15% 14% 16% 20% 19% 17% 29% 50%
Misalignment between performance and remuneration 32% 30% 34% 35% 37% 35% 47% 58%
No structured management process 14% 15% 12% 15% 26% 35% 31% 38%
Process is too complicated 9% 8% 11% 15% 8% 7% 7% 29%
Process is too lengthy 7% 6% 6% 10% 7% 8% 9% 21%
Remuneration budget is frequently over 7% 6% 11% 0% 8% 6% 8% 0%
Remuneration budget is frequently under 11% 9% 14% 10% 10% 9% 11% 29%
None - we have no challenges 20% 25% 12% 20% 11% 13% 8% 4%
I don't know 6% 6% 6% 5% 6% 10% 8% 4%
Which metric(s) does your organisation use to measure the effectiveness of its remuneration processes?
34%
Market index (comparison with competitors)
35%
21%
Pay equity
28%
22%
Remuneration reviews completed within budget
26%
20%
Employee satisfaction with remuneration
23%
2020 (n = 602)
22%
Average annual base-pay increases 2019 (n = 507)
21%
4%
Time taken to conduct pay reviews
5%
35%
None - we don't use any metrics
33%
8%
I don't know
7%
Summary:
The results show that 1 in 3 organisations do not use any metrics to measure the effectiveness of their remuneration
processes. This is a slight increase from the 2019 survey. Even more surprising is that 42% of C-suite leaders were unaware
of any metric being used to assess how effectively remuneration is being managed within their organisation.
Insight:
1 in 5 respondents use pay equity as a metric
While salaries are a significant component of the cost of doing business, there are opportunities for organisations of all
sizes to reduce waste and ensure that they maximise the return on investment for every dollar spent. Knowing and tracking
key remuneration metrics is a key way to do this. Data has never been more important to making informed business
decisions and remuneration metrics help tell a large part of the people story. They should be included in any HR reporting
suite.
Action:
● Identify the metrics that can most effectively assess your remuneration process. The use of metrics can help
identify hot spots and key talent where retention and engagement initiatives are critical (e.g. ‘flight risk’
employees). This enables leaders to present business cases to do something to mitigate identified risks, rather
than taking a blanket “do nothing” approach for all staff. ELMO recently released a whitepaper that explains a
1 in 5 enterprise organisations measure 'pay range of key remuneration metrics and how they can be used and calculated. Tracking these regularly can help HR
leaders spot opportunities, unlock savings and prevent smaller issues escalating to larger issues.
equity' and 'remuneration reviews completed
within budget'. These are their top metrics used
Pay equity 21% 17% 19% 24% 21% 21% 22% 19% 25% 20%
Employee satisfaction with remuneration 20% 13% 19% 22% 22% 18% 32% 22% 19% 14%
Market index (comparison with competitors) 34% 36% 33% 36% 32% 33% 45% 30% 39% 41%
Average annual base-pay increases 22% 21% 21% 22% 24% 23% 20% 18% 28% 25%
None - we don't use any metrics 35% 22% 32% 34% 42% 35% 31% 39% 29% 30%
Has fully implemented technology Does not have fully implemented technology
Which metric(s) does your organisation use to measure the Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
effectiveness of its remuneration processes?
n = 267 n = 153 n = 94 n = 20 n = 332 n = 188 n = 120 n = 24
Remuneration reviews completed within budget 26% 21% 35% 15% 20% 17% 20% 29%
Pay equity 22% 17% 32% 20% 19% 21% 19% 21%
Employee satisfaction with remuneration 26% 30% 22% 15% 15% 15% 16% 13%
Market index (comparison with competitors) 34% 28% 44% 35% 33% 32% 35% 46%
Average annual base-pay increases 25% 23% 30% 25% 19% 15% 26% 25%
None - we don't use any metrics 30% 36% 21% 25% 34% 41% 35% 33%
Which of the following areas of remuneration is your organisation planning to focus on over the next 12
months?
Minimising wages 8%
8%
2% 2019 (n = 507)
Reducing CEO-to-worker pay ratio
1%
Other 7%
6%
Summary:
While mainstays such as improving retention and attracting in-demand skills remained the key focus areas, a key result in 2020 was the decline in the percentage of organisations focused on
improving gender pay equality and / or measuring pay equality metrics. This was particularly apparent for mid-market respondents who are less focused on pay equality or using pay equality metrics
than they were in 2019. Overall, only 1 in 7 respondents said their organisation is focused on gender pay equality and even less are focused on improving equality for minority groups.
Insight:
Along with a general decline in most focus areas, the drop in priority for gender pay equality demonstrates how much COVID-19 has sent organisations into cost cutting mode, which sadly means that
some of the values around pay equality are less of a focus or not on the radar at all.
While COVID-19 has impacted organisations in numerous ways, one consistent feature across sectors has been the disproportionate impact on female workers. Many cost and risk management
measures that appear innocuous have in fact hit women’s roles hardest and have also widened the gender pay gap. Australia’s gender pay gap stands at 14% (August 2020). This has led to warnings
from the Workplace Gender Equality Agency (WGEA) that Australia is at risk of letting pay equality regress by a decade. In New Zealand, the latest report from Stats NZ (June 2019) found the gender
pay gap was 9.3%. It’s also worth noting that it’s extremely difficult to understand the impact that proposed cost cuts may have without proper metrics in place.
Pay equality is an important part of workplace gender equality, which is a priority across many organisations to deliver on their organisational values and their talent strategy. Research indicates that
workplaces prioritising gender equality attract better talent, while gender diversity at the leadership level correlates to better financial results and long-term value.
Unfortunately, it seems that when budgets tighten, employers tend to see every dollar spent on salaries and wages as a cost, rather than an investment to support their long-term retention and
talent strategies. Organisations that lose sight of pay equality now will be vulnerable to talent and compliance risks that could take years to unravel and compromise their ability to participate in the
post-pandemic recovery.
Action:
● Use key HR metrics to understand the link between remuneration and employee engagement and retention. Although fair remuneration is not the only reason people show up to work, it is
always going to be an important element.
● Review remuneration practices across the organisation to ensure there are no gender-related pay disparities. If disparities do exist, develop a long-term strategy to systemically close those
gaps.
Improving retention 29% 30% 24% 32% 29% 29% 30% 24% 35% 39%
Attracting in-demand skills 27% 17% 28% 24% 34% 27% 30% 26% 28% 32%
Improving gender pay equality 15% 16% 19% 15% 12% 16% 14% 9% 21% 34%
Overall, how would you rate your organisation's internal systems and processes for efficiently and effectively
managing remuneration / compensation & benefits?
Excellent 6%
Good 31%
Average 41%
Poor 12%
Very poor 6%
I don't know 5%
n = 599
Summary:
Less than 40% of respondents rated the effectiveness and efficiency of their remuneration processes as good or excellent. That means more than half of respondents feel there is a lot of room
for improvement, which in remuneration terms means that time or money is being wasted.
Insight:
Managing remuneration is an inescapable part of having employees. Reviewing remuneration frameworks and processes may not have been a top priority in 2020, but it is the foundation of
employment relationships. Being able to deliver key remuneration processes efficiently and effectively can save time and money, and free up HR teams to focus on more pressing people issues.
Despite the uncertainty that the outbreak of COVID-19 and the ensuing economic downturn introduced to the business world in 2020, there is still a clear focus on talent and supporting talent
strategies through solid remuneration practices. Therefore, organisations that focused on cost-cutting without considering the impact on engagement, morale and reputation may eventually
realise they were being short-sighted. Unemployment may have risen throughout 2020, but high performers are always in demand, and highly capable and engaged staff have a huge impact on
an organisation’s bottom line.
It is also apparent that having a remuneration and benefits framework is critical to sustainable success in this area. While larger organisations are more likely to have a remuneration and
benefits specialist capable of creating such a framework, smaller organisations tend to have two ‘types’ of people responsible for their remuneration process. The first ‘type’ is savvy with
numbers and potentially crunches the numbers manually to ensure the technology is giving them the same result. The second ‘type’ of person relies on the technology and does not know how to
calculate the numbers, or how to interpret the meaning behind the numbers to spot anomalies or opportunities. This is where partnering with a remuneration and benefits technology specialist
can help smaller organisations to analyse their data and draw more meaningful insights from it.
Action:
● Consider how technology can help with your remuneration processes. The use of technology significantly increases the chance of respondents rating their organisation’s remuneration
processes favourably. Overall, 1 in 2 respondents using a form of technology rated their effectiveness as good or excellent, compared with only 3 in 10 who do not use technology. The
ratio is consistent for all organisation sizes.
● Ensure that you spend time evaluating and designing your framework to ensure it is tailored to your organisation’s needs and business goals. Technology is not the sole answer. Similar
to other topics covered in this report, one cannot lay a technology platform over a poor framework and expect it to become effective.
Excellent 6% 3% 2% 4% 11% 6% 7% 7% 5% 0%
Good 31% 30% 30% 30% 32% 31% 30% 32% 30% 23%
Average 41% 25% 45% 45% 39% 40% 44% 41% 40% 43%
Poor 12% 13% 11% 13% 11% 12% 11% 11% 14% 14%
Excellent 9% 10% 9% 0% 3% 5% 2% 0%
I don't know 4% 4% 4% 0% 6% 6% 6% 8%
Monica
ELMO Watt
SOFTWARE
| ELMO| CLOUD
2021 |HRUnclassified
& PAYROLLPublic
| 2018 279
Payroll key challenges
Summary:
‘Manual processes and workarounds’ was, by some margin, the biggest payroll challenge facing organisations in 2020. For those organisations without fully implemented technology, this was
selected by a significant 67% of respondents (reducing to 53% for those respondents with fully implemented technology). The second biggest challenge suggests that technology cannot resolve all
issues: poor integrations across HR, payroll and rostering / time & attendance systems (cited by 32% of all respondents). Surprisingly, this remains a challenge even for organisations with fully
implemented technology, with 29% of total respondents citing this.
Interpretation of Awards / Enterprise Agreements (27%) was cited as the third most significant challenge – perhaps not surprising, given the complexity of the payroll environment in Australia and
New Zealand. Fortunately, technology appears to be assisting with this challenge. Only 24% of respondents with fully implemented technology cited this as a challenge, versus 40% of those
without technology.
Insight:
Existing and long-standing payroll challenges were compounded in 2020 by fresh challenges relating to COVID-19. Indeed, few areas of business operations were impacted more heavily than the
payroll function. Many respondents listed their payroll challenges as being related to the burden of administration and keeping up with legislative changes. The introduction of government wage
subsidy programs, such as JobKeeper in Australia, presented new challenges to payroll professionals – a situation not helped by the fact that many payroll software vendors were unable to deliver
automation to their customers due to short lead times. Identifying eligible employees, collecting declarations and calculating top-ups were all added to the workload of payroll professionals in
2020.
It’s clear there are still many organisations using manual processes and workarounds – and again, the government wage subsidies meant that additional work was required as part of these manual
processes. It was estimated that determining who needed a top-up and by how much added on average around 20 extra hours per pay run. It is to the payroll profession’s credit that compliance
breaches, as well as underpayments and overpayments, were rated quite low on the list of challenges.
In 2020, there was also a decline in Award and Enterprise Agreement interpretation being cited as a challenge. This is no doubt due to the adoption of automated interpretation through smart HR
technology. However, there was also a lack of integration occurring between HR, rostering / time & attendance systems, and payroll systems. This was cited by 32% of respondents as a challenge,
and appears to have been more of a challenge for larger organisations, having been cited by 42% of enterprise respondents and 35% of mid-market (and 28% of SMBs). This challenge may have
rated so highly due to the laborious nature of dealing with exceptions, or perhaps because organisations are still transposing data manually.
Unfortunately, it seems many organisations are not helping their payroll team to deal with admin by minimising payroll inaccuracies: a common expectation is that payroll will simply ‘fix things’.
More than that, there may be an expectation from payroll professionals that their payroll software will keep them out of trouble. However, this is dangerous. More experienced payroll
professionals are aware of their compliance obligations and stay on top of changing legislation. Continuous professional development is a must for payroll professionals.
There is a new incentive for staying on top of compliance issues. In Australia, the states of Queensland and Victoria have introduced legislation that makes wage theft a criminal offence, with
business owners bearing the brunt. There is pressure mounting to make this a federal offence, whereby owners will be charged under criminal proceedings and face more than just fines if they are
found guilty of wage theft. While there is no recent New Zealand data regarding wage theft, in 2016 the Council of Trade Unions found workers had been repaid more than $35 million for payroll
errors that year alone. There have been countless instances of employers underpaying employees in recent years. Here are some tips from the Australian Payroll Association on how to avoid
becoming yet another headline.
Action:
● Don’t be complacent. Complexity is no excuse for underpayment of entitlements. The onus is on employers to keep track of – and correctly apply – all the rules.
● Regularly conduct compliance checks. Compliance checks for payroll are necessary to ensure the processes and tools used are still compliant and fit for purpose. An annual audit of the
payroll platform may prevent small issues becoming bigger (and more costly) issues.
● Payroll data accuracy should always be a priority. The more accurate the payroll function is, the better most business processes will be. Just as critically, the adoption rate of self-service
tools will increase, and that in turn will translate into accuracy and savings in payroll.
● Be wary of manual workarounds. Manual workarounds have always been a challenge for payroll. However, the events of 2020 – especially implementing government wage subsidies –
exacerbated this challenge. Payroll professionals don’t need to be calculating pay manually; however, if something needs to be changed, and it’s happening for the first time, they do need
to know that the change is implemented correctly. This is where over-reliance on technology can be risky. Today’s payroll professionals must be aware of what’s changing and who it
impacts. Continuous professional development and always being alert to changing legislation and regulations is a better response than relying solely on a system to dictate what is
compliant.
● When it comes to implementing new technology, consider the change process that may be required to ensure any tools are being utilised correctly. This may apply to the payroll team as
much as the employees themselves. For example, self-service functionality will only make a difference if appropriate training is offered and processes are changed accordingly. It’s all too
easy to implement new technology only to revert to previous processes. Also, ensure that any tools used serve the right purpose: Does it help resolve the challenges at play? Can it be used
on any device?
Accurate reporting 16% 13% 22% 11% 18% 16% 16% 15% 17% 23%
Interpretation of Awards / Enterprise Agreements 27% 33% 36% 20% 27% 29% 7% 22% 33% 35%
Lack of flexible reporting tools 20% 26% 24% 20% 15% 21% 16% 16% 25% 27%
Manual processes and workarounds 42% 37% 52% 41% 38% 43% 31% 37% 47% 58%
Staff not utilising self-service when available 18% 37% 14% 18% 14% 17% 24% 12% 25% 31%
Which metric(s) does your organisation use to measure the performance of its payroll processes?
Summary:
Once again, not many organisations are using any metrics at all to measure payroll effectiveness – although SMBs appear to be struggling the most in this regard. Having no metrics at all correlates with
technology usage, or lack thereof. Those with technology tend to utilise metrics; those without fully implemented technology go without metrics or only have access to basic metrics. For SMBs with fully
implemented technology, 47% said they used no metrics at all; for those without fully implemented technology this increased to 55%. For enterprise organisations, these figures were 33% for those without
technology and 18% for those with technology. For mid-market organisations, the figures were 38% for those without technology and 33% with technology. While the use of all metrics declined compared to
2019, the preference order (i.e. the types of metrics used) remained the same. Similar to 2019, the main metrics used in 2020 related to compliance and payroll accuracy.
Insight:
Enterprise teams mainly focused on accuracy and the number of employee enquiries to assess their payroll performance. It makes sense for enterprise businesses to focus on these areas as payroll generally
exists as a standalone function (tied to Finance) and therefore payroll operations have more internal visibility. Payroll teams need to prove or show value against their costs as they’re not revenue
generating. Enterprise organisations also typically have larger payroll teams, but this does not necessarily correlate to improved data accuracy. Indeed, research from the Australian Payroll Association
shows that 69% of organisations with more than 10,000 employees made errors at least every month, compared with 55% of organisations with 1001-5000 employees, 45% of organisations with 500-1000
employees, 24% of those with 201-500 employees, 21% of those with 51-200 employees, and just 16% of businesses with up to 50 employees.
Further insights can be drawn from the responses to this question about payroll metrics. One is that some payroll professionals may not know how to measure the success of their operations. This could be
due to the high staff turnover in the profession, and employee burnout, which is a genuine and concerning issue. New hires may be unaware of or untrained on what needs to be assessed or where to find
relevant data. The survey results also highlight an underlying reluctance to change. For a payroll professional to give up a previous system and adopt a new one whilst carrying on their day-to-day activities is
a big ask. It also takes time to find all the relevant data and information required in a new system. Although payroll professionals are clearly passionate about accuracy and getting the job done as efficiently
as possible, some would rather stick with an inefficient process than switch to a newer, more efficient process or platform and risk getting it wrong.
Beyond pay cycle accuracy (cited as a metric used by 26% of respondents overall), compliance remains a key indicator of payroll effectiveness (cited by 24% of respondents overall). This may be due to the
complexity and changing regulatory nature of Australia and New Zealand’s industrial landscape. According to research, 90% of payroll managers find the current laws confusing and contradictory. That
research also highlighted that 89% of payroll managers struggle to apply laws to real-world situations, due to uncertainty about how to interpret the wording of Awards and associated legislation.
Action:
● Ensure payroll employees have appropriate training and support to keep up with regulatory and legislative changes. Research shows that only 10% of payroll professionals in Australia across large
and small organisations have a competency-based payroll qualification. Without the right training and support, payroll accuracy cannot be guaranteed and compliance issues will continue.
● Fully utilise the reporting capabilities of any payroll software in place. If software is not yet implemented, undertake market research to identify which system can best serve the needs of your
organisation.
Compliance 24% 24% 19% 31% 20% 25% 11% 20% 30% 27%
Number of employee enquiries 14% 13% 13% 15% 13% 14% 9% 11% 15% 31%
Pay cycle accuracy 26% 30% 20% 32% 21% 27% 20% 22% 32% 31%
Payment timeliness 24% 20% 19% 27% 26% 24% 22% 21% 29% 23%
Reporting accuracy 16% 17% 16% 19% 13% 17% 9% 14% 19% 23%
Reporting timeliness 14% 11% 13% 18% 12% 15% 7% 12% 17% 19%
Total payroll processing costs 11% 11% 6% 13% 11% 11% 11% 8% 11% 27%
None - we don't use any metrics 42% 37% 35% 39% 50% 39% 62% 48% 34% 23%
Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
Which metric(s) does your organisation use to measure
the performance of its payroll processes?
n = 346 n = 209 n = 120 n = 17 n = 80 n = 42 n = 29 n=9
23%
Accounting software
21%
28%
Integrated HR and payroll software
36%
7%
Paper-based methods (e.g. 'box of receipts') 2020 (n = 425)
6%
2019 (n = 356)
26%
Spreadsheets
22%
52%
Stand-alone payroll software
45%
5%
Other
8%
3%
I don't know
3%
Summary:
Stand-alone payroll software remains the most popular way to manage payroll processes, selected by 52% of respondents overall. Integrated HR and payroll software was the second most popular
choice, having been selected by 28% of respondents. When responses to this question are analysed by organisation size, stand-alone payroll software is used by 58% of mid-market organisations,
50% of SMBs, and 38% of enterprise organisations. More enterprise organisations (58%) selected integrated HR and payroll software. This dropped to 32% for mid-market organisations, and 22%
for SMBs.
Manual processes are still prevalent, with 26% of organisations using spreadsheets and 7% using paper-based methods. Not surprisingly, SMBs are the highest users of accounting software, with
30% of respondents selecting this option.
Insight:
The prevalence of integrated platforms for enterprise organisations is expected, given the time, cost and resource savings possible by having all-in-one HR and payroll systems. For mid-market
organisations, the results were also not surprising. Their preference for stand-alone software is possibly due to not being quite ready – or large enough – to justify having a broader technological
ecosystem, so stand-alone software is purchased as and when it’s required. It’s also challenging to adopt new software or platforms. This can lead to payroll professionals sticking with what they
know and even encouraging or influencing their new employer(s) to take up the systems they are comfortable with.
In Australia, the introduction of Single Touch Payroll (STP) reporting in 2019 required many organisations to update their payroll systems. For those organisations still using their accountant to
complete payroll, they will need to move to a means of completing their own payroll and reporting obligations unless they are using a registered agent / intermediary. The introduction of
government wage subsidies during the pandemic also accelerated this trend towards having some form of technology to stay on top of payroll obligations.
The use of spreadsheets remains widespread, with just over a quarter (26%) of all respondents using them. However, this usage may be due to some organisations not yet having fully implemented
technology to match existing processes, resulting in functional gaps that need filling. Alternatively, this may be due to experienced payroll professionals running additional checks and validating
numbers using spreadsheets.
Action:
Accounting software 23% 15% 20% 23% 27% 25% 9% 30% 16% 0%
Integrated HR and payroll software 28% 33% 43% 26% 18% 29% 16% 22% 32% 58%
Spreadsheets 26% 30% 34% 21% 23% 26% 22% 25% 28% 15%
Stand-alone payroll software 52% 59% 45% 57% 48% 51% 62% 50% 58% 38%
I don't know 3% 4% 3% 1% 4% 3% 2% 4% 2% 0%
How do you currently manage your organisation's Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
payroll processes?
n = 345 n = 208 n = 120 n = 17 n = 80 n = 42 n = 29 n=9
Integrated HR and payroll software 30% 25% 32% 76% 20% 12% 31% 22%
Stand-alone payroll software 52% 51% 59% 18% 50% 43% 52% 78%
I don't know 3% 3% 2% 0% 4% 5% 3% 0%
Across your entire organisation, which of the following pay cycles are run?
66%
61%
2019 (n = 356)
2020 (n = 426)
36% 35%
28%
26%
12%
8%
4% 5%
3% 2%
#N/A 1% 1% 1% 1% 1%
Weekly Fortnightly Bimonthly (two Every four Monthly Quarterly Ad hoc Other I don't know
(biweekly) cycles per weeks
month)
Summary:
2020 results were similar to those from 2019. Fortnightly (bi-weekly) is by some margin the most popular pay cycle, cited
by 61% of respondents, followed by monthly (35%) and weekly (28%). Technology may play a role in pay cycles. For
example, 83% of respondents with fully implemented technology use weekly cycles, versus 71% of those without fully
implemented technology.
Insight:
6 in 10 respondents use fortnightly The payroll process should be as easy and effective as possible. The most common payroll schedules in Australia are
weekly, fortnightly and monthly. Ad hoc pay cycles would normally only be applicable for corrections or terminations,
(biweekly) pay cycles
which need to be paid within 7 days and are frequently paid out of cycle. In New Zealand, the most common are
fortnightly, monthly and weekly.
Every business has the freedom to choose its own payroll schedule, although in some instances this may be dictated by
Awards or collective bargaining agreements. In Australia, collective agreements (EBAs) cover almost 40% of employees,
about 22% are solely Award-reliant, and the remainder have individual contracts underwritten by the legislated National
Employment Standards (NES). In New Zealand, approximately 21% of workers are on collective agreements.
Action:
If circumstances allow for a pay schedule to be chosen, consider the following questions:
Over 1 in 3 respondents
use monthly pay cycles ● How many employees do you have?
● Does your Award specify a pay period?
● Do you pay your employees an hourly rate or a salary?
● Do you pay your employees for overtime?
● How much does it cost you to process the payroll?
Weekly 28% 26% 20% 32% 31% 28% 31% 26% 31% 42%
Fortnightly (biweekly) 61% 63% 68% 58% 58% 61% 62% 53% 70% 77%
Monthly 35% 43% 31% 36% 34% 35% 36% 35% 33% 50%
Quarterly 1% 2% 1% 1% 1% 1% 0% 1% 2% 0%
Ad hoc 12% 15% 16% 14% 6% 12% 18% 10% 15% 19%
I don't know 2% 2% 4% 0% 3% 2% 2% 3% 1% 4%
Has fully implemented technology Does not have fully implemented technology
Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
Across your entire organisation, which of the following
pay cycles are run?
n = 345 n = 208 n = 120 n = 17 n = 80 n = 42 n = 29 n=9
Fortnightly (biweekly) 61% 56% 68% 76% 59% 40% 79% 78%
Quarterly 1% 1% 3% 0% 0% 0% 0% 0%
Other 0% 0% 1% 0% 3% 5% 0% 0%
Overall, how would you rate your organisation's internal systems and processes for efficiently and effectively
managing your organisation's payroll?
Excellent 14%
Good 44%
Average 30%
Poor 7%
Very poor 4%
I don't know 2%
n = 425
Summary:
Most organisations are satisfied with how their payroll processes and systems are tracking, with 58% of respondents rating themselves as ‘good’ or above. 41% rate their processes and systems as average or
worse. No enterprise respondents rated their systems and processes as ‘excellent’; most rated them as ‘average’. There were expected industry variations as well: the manufacturing sector, wholesale trade
sector, and administrative & support services sector were more likely to report that their payroll processes and systems were ‘poor’. Conversely, the accommodation and food services sector, along with the
rental, hiring and real estate services sector obtained the most ‘excellent’ responses.
When it comes to payroll enquiries received per month (see graphs showing payroll enquiries later in this Payroll section), Australian payroll teams received double the amount than New Zealand teams reported
(based on median figures). Enterprise organisations received five times the number of enquiries than mid-market organisations – a reflection of the complex nature of payroll in larger organisations, which may
have more than 100 payroll-related obligations to various entities covering taxation, workplace rights and standards, employee benefits, superannuation, and workers’ compensation, to name just a few.
Insight:
Most enterprise respondents rated their systems and processes as ‘average’. This result should not come as a surprise – there are so many variables with payroll and leave and these variables increase as
employee numbers rise. There may also be broader, more systemic issues at play. For example, enterprise processes may suffer due to a lack of payroll operational leadership. Payroll managers are typically ‘do-
ers’ rather than leaders, and many career payroll professionals are retiring. This will leave a talent gap and a lack of skills relating to change management, strategic planning and also executive team liaison.
Leaders need to be updated on what needs to be done to improve compliance and reduce risk.
For industries that have been burnt by employee underpayments or wage theft claims – and that’s most industries – one would expect that processes have been improved to prevent such mistakes occurring in
the future. However, this will take time. For now, a significant 33% of payroll managers admit to making employee payment or entitlement blunders at least once a month – and that’s a financial and reputational
risk that no organisation can afford.
Action:
For those organisations looking to improve their payroll operations, here are four questions to ask:
● When was the last time we checked that the way we pay people is correct?
● When did we last seek advice to ensure that what we think are the correct rules are actually correct?
● How are we resourcing compliance internally and have we struck the right balance between systems and people?
● How regularly are we updating our HR information systems, rostering / time & attendance systems, and payroll systems, and are these systems still fit for purpose?
● Is there sufficient training and support for payroll professionals in the organisation so they can keep abreast of the industrial relations landscape and understand how to apply new legislation and
regulations to the business?
Excellent 14% 15% 11% 14% 16% 12% 27% 17% 11% 0%
Good 44% 39% 35% 47% 48% 44% 42% 50% 36% 31%
Average 30% 30% 37% 30% 24% 31% 22% 22% 39% 46%
Poor 7% 7% 4% 7% 9% 7% 4% 8% 5% 12%
Very poor 4% 4% 8% 1% 4% 4% 4% 2% 6% 8%
I don't know 2% 4% 5% 1% 0% 2% 0% 2% 3% 4%
Overall, how would you rate your organisation's internal Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
systems and processes for efficiently and effectively
managing your organisation's payroll? n = 345 n = 208 n = 120 n = 17 n = 132 n = 42 n = 29 n=9
How many hours per calendar month do you SMB Mid-market Enterprise
Junior to Mid-level Senior C-suite
personally spend on the following key payroll Overall Australia New Zealand
mid-level management management leaders
activities? (1 - 199) (200 - 1999) (2000+)
Data validation 5 9 6 4 5 5 5 6 5 2
Distributing payments 5 3 6 9 2 5 11 4 8 1
Employee enquiries 5 6 7 4 3 5 3 4 7 7
Payroll accounting 5 4 7 7 3 4 12 5 7 2
Payroll calculation 6 12 8 5 4 7 4 6 8 2
Reporting 5 5 7 4 3 5 4 4 7 11
Statutory compliance 3 3 5 3 3 4 2 2 6 4
Note: This question asked respondents to provide values relating to several aspects of the payroll process. The Lowest
Saturation segment scale: Highest
number of respondents listed for each column in the table above refers to the average number of people who average average
provided an answer for these questions, as some respondents may not have answered all questions.
value value
How many hours per calendar month do you SMB Mid-market Enterprise
Junior to Mid-level Senior C-suite
personally spend on the following key payroll Overall Australia New Zealand
mid-level management management leaders
activities? (1 - 199) (200 - 1999) (2000+)
Data validation 2 4 2 2 2 2 2 2 4 2
Distributing payments 1 2 1 1 1 1 2 1 5 1
Employee enquiries 2 5 2 2 2 2 2 2 4 5
Payroll accounting 2 4 3 2 2 2 4 2 5 2
Payroll calculation 3 5 5 2 2 3 2 3 4 1
Reporting 2 3 3 2 2 2 2 2 3 6
Reviewing and approving all payroll
2 4 3 2 2 2 2 2 3 2
payments
Staff training / coaching / development /
2 4 2 2 3 2 3 2 3 5
management
Statutory compliance 2 2 3 2 1 2 1 2 3 3
Note: This question asked respondents to provide values relating to several aspects of the payroll process. Lowest
Saturation segment scale: Highest
The number of respondents listed for each column in the table above refers to the average number of people median median
who provided an answer for these questions, as some respondents may not have answered all questions.
value value
Summary:
‘Gathering data’ was identified as the activity that payroll professionals spend the most time on in Australia, while in New Zealand most time goes towards payroll accounting. ‘Reporting’ was identified by
enterprise respondents as taking the most time, while for SMBs it was ‘gathering data’ and ‘payroll calculation’.
Insight:
Australian payroll professionals devote most of their time to two tasks: ‘gathering data for payroll’; and ‘payroll calculations’. This is not surprising. Many payroll systems aren’t geared towards across-the-
board self-service functionality and automation. Gathering data for payroll is an onerous process that not everyone has mastered through self-service functionality and online onboarding. Compiling
transactional data such as timesheets, ensuring information is obtained from new starters, and changes in employment conditions all impact payroll. The time put into payroll calculations is likely due to
complex termination calculations and the increase of those during COVID-19, not to mention the increased calculation workload that has come with government wage subsidy top-ups (for example,
JobKeeper). New Zealand professionals face a similar burden, with respondents citing ‘gathering data for payroll’ and ‘payroll accounting’ as their highest time investments during the pay cycle. ‘Payroll
accounting’ being rated so highly is interesting, as New Zealanders do not face anything more onerous than Australians when it comes to legislative requirements – in fact, Australia’s leave liability is far
more complex than New Zealand’s. However, this result might reflect the smaller population, less coverage of collective agreements, and fewer options for localised and automated payroll technology.
Action:
● Undertake research into what can be automated. While payroll technology cannot fix a fundamentally complex regulatory environment and human oversight will always be required, it can streamline
and automate processes and help with compliance obligations.
● Investigate how self-service functionality can help improve the efficiency of payroll operations. The table below highlights some examples of how self-service tools can help employees, managers
and HR manage their payroll and rostering / time & attendance obligations:
Check leave and payslips online at any time Approve leave requests and review balances
Update bank and superannuation details online at any time Track absentee rates
Fill out and send timesheets easily online at any time; receive automated emails when rosters are updated Approve timesheets, rosters, and schedules; send automated roster update emails
Weekly 11 17 17 10 8 12 4 6 20 25
Monthly 14 17 18 17 9 15 10 9 31 12
Quarterly 6 2 5 - 10 6 - 4 10 -
Ad hoc 6 7 5 2 14 6 2 3 11 3
Note: This question asked respondents to provide values relating to several aspects of the payroll process. Lowest
Saturation segment scale: Highest
The number of respondents listed for each column in the table above refers to the average number of people average average
who provided an answer for these questions, as some respondents may not have answered all questions.
value value
Weekly 5 8 6 4 5 5 4 4 8 16
Fortnightly (biweekly) 10 10 11 10 10 10 8 8 20 40
Monthly 8 16 8 8 6 8 6 7 13 12
Quarterly 5 2 5 - 10 5 - 4 10 -
Ad hoc 2 5 2 2 2 2 2 2 2 1
Note: This question asked respondents to provide values relating to several aspects of the payroll process. Lowest
Saturation segment scale: Highest
The number of respondents listed for each column in the table above refers to the average number of people
median median
who provided an answer for these questions, as some respondents may not have answered all questions.
value value
Note: This question asked respondents to provide values relating to several aspects of the payroll process. Lowest
Saturation segment scale: Highest
The number of respondents listed for each column in the table above refers to the average number of people
average average
who provided an answer for these questions, as some respondents may not have answered all questions.
value value
Note: This question asked respondents to provide values relating to several aspects of the payroll process. Lowest
Saturation segment scale: Highest
The number of respondents listed for each column in the table above refers to the average number of people
median median
who provided an answer for these questions, as some respondents may not have answered all questions.
value value
Monica
ELMO Watt
SOFTWARE
| ELMO| CLOUD
2021 |HRUnclassified
& PAYROLLPublic
| 2018 309
Rostering / time & attendance key challenges
What are your organisation's key rostering / time & attendance challenges?
What are your organisation's key rostering / time & attendance Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
challenges?
n = 205 n = 129 n = 56 n = 20 n = 151 n = 84 n = 56 n = 11
Ability to monitor shift and roster costs 13% 10% 20% 15% 17% 7% 32% 18%
Communication to employees about rosters and changes 19% 17% 18% 35% 17% 7% 29% 27%
Compliance 13% 11% 16% 20% 19% 13% 25% 27%
Data input errors 19% 18% 23% 15% 23% 14% 34% 36%
Ineffective leave management 17% 19% 11% 25% 26% 17% 39% 27%
Ineffective reporting 9% 5% 14% 20% 20% 8% 38% 18%
Ineffective rostering 12% 8% 16% 25% 23% 12% 39% 27%
Keeping up to date with industrial awards, etc. 17% 18% 14% 15% 13% 5% 25% 18%
Lack of flexible reporting 11% 8% 18% 15% 15% 7% 25% 18%
Manual processes or workarounds 29% 25% 36% 40% 42% 32% 55% 45%
Monitoring certification eligibility to do particular shifts (e.g.
7% 6% 9% 5% 8% 4% 14% 9%
licences, RSAs)
No or ineffective integration of employee systems across HR vs.
16% 13% 16% 30% 31% 23% 45% 27%
rostering / time & attendance, and / or payroll systems
No real-time reporting 14% 12% 18% 15% 27% 14% 45% 36%
The effort to fill a roster 13% 10% 13% 35% 19% 13% 25% 27%
Too much absenteeism 16% 12% 13% 45% 12% 6% 20% 18%
Too much overtime 11% 9% 14% 20% 14% 7% 25% 9%
None - we have no challenges 19% 25% 11% 0% 22% 31% 11% 9%
I don't know 9% 7% 11% 15% 6% 6% 4% 18%
Saturation map scale:
Lowest Highest
value value
Summary:
Earlier in this report, the rising importance of workforce management (WFM) and rostering, time & attendance was noted. The market saw a 7% increase in the number of organisations considering
investing in workforce planning as a high priority, while there was a 5% increase in those considering it a medium priority. Workforce planning enables employers to reduce costs from over-rostering and
mitigate compliance issues of over- or under-paying Awards and entitlements.
Over half (55%) of mid-market organisations without fully implemented technology are using manual processes or workarounds. This drops to 36% for those mid-market organisations with fully
implemented technology – an indication that although technology certainly helps, WFM processes still require some manual interventions. Indeed, ‘integration of employee systems across HR vs. rostering /
time & attendance and / or payroll systems’ is the second biggest challenge facing organisations of all sizes in this space, cited by 22% of respondents. This rises to 45% for mid-market respondents. Some
challenges, including ‘data input errors’ and ‘ineffective leave management’, were lower priorities in this year’s results. ‘Compliance’ also saw a slight drop – a surprise given the impact of COVID-19 on staff
rostering and scheduling.
Insight:
There are some interesting observations to be made about the responses to this question based on organisation size. Management teams in SMBs are generally familiar with employees: they know them
personally and know when they are scheduled to work. Mid-market and enterprise organisations don’t have that luxury – but then again, it would be more common to scale staffing needs before scaling
the workforce planning platform / software. This hands-on approach is reflected in ‘ineffective rostering’ only being cited by 8% of SMBs. However, there’s an element of not knowing what you don’t know.
Many SMBs don’t have data to support a rostering decision either way – and when dollars are being watched every day, it’s important to have data to back decisions.
Data is critical for successful rostering and some organisations will feed previous sales figures into WFM tools to determine staffing needs. For organisations that have relied upon the previous year’s data,
the danger is always having too many or too few people on the ground – this is magnified by the unusual business and economic conditions seen during the second half of 2020.
It appears that most challenges are more operationally focused than technology focused. As observed in other areas of this report, it’s possible to implement a technology platform without also reviewing
business processes, but simply implementing technology can’t fix poor processes. WFM systems for enterprise businesses can be notoriously difficult to implement due to their complex requirements. If
organisations are not supported properly through the post-implementation phase, they generally end up falling back on old processes, or under-utilising the newly installed system. Every organisation
should consider a change management plan to ensure everyone is on board when rolling out a new platform across the business. Even for SMBs, there are opportunities to save time and money by
adopting a WFM solution, provided the implementation is well handled.
Just under a fifth (19%) of respondents said they have no real-time reporting (a slight decline on the 22% from 2019). However, 31% of mid-market respondents said this was a challenge. Having real-time
visibility and reporting over day-to-day operational performance can give leaders more insight and control over how the workforce is managed – and that means significant cost and resource savings. The
higher figure for mid-market makes sense when one considers that many mid-market organisations are in ‘scale up’ mode. As organisations outgrow the SMB space, real-time reporting becomes more
important as they start to closely monitor their day-to-day scheduling activities and related wage spending.
Action:
● WFM solutions have increased in importance. With organisations making headlines for over- or under-payments and misinterpreting industrial instruments, it’s time to consider how
technology can help in this area.
● Mid-market organisations in particular want more visibility of daily operations in tough economic times to ensure careful monitoring of wage spend vs. business demand.
● For those still relying on manual processes, consider if the maximum value is being obtained from any solution already in place. Launch an education program if knowledge gaps are seen.
Simple tips – for example, calling staff to check availability vs. automated emails to the team – can reduce the time spent on staff schedules and rosters.
● Workforce modelling based on previous consumer demand and other variables such as weather conditions (for certain businesses) can have a huge impact on the human resources used on a
daily basis. Such modelling is reliant on real-time, detailed reporting.
1 in 3 respondents said manual processes or workarounds 1 in 4 SMBs said they had no rostering / 5 in 8 respondents have either fully implemented or are
was their biggest rostering / time & attendance challenge time & attendance challenges currently implementing rostering / time & attendance technology
Ability to monitor shift and roster costs 15% 14% 8% 17% 17% 15% 14% 9% 26% 16%
Compliance 15% 11% 16% 15% 17% 17% 7% 12% 21% 23%
Data input errors 21% 31% 25% 16% 20% 21% 16% 16% 29% 23%
Ineffective leave management 21% 14% 18% 26% 19% 21% 21% 18% 25% 26%
Ineffective reporting 14% 11% 15% 13% 14% 15% 5% 7% 26% 19%
Ineffective rostering 17% 11% 18% 17% 17% 17% 14% 9% 28% 26%
Lack of flexible reporting 13% 9% 10% 16% 12% 13% 12% 8% 21% 16%
Manual processes or workarounds 35% 37% 35% 32% 36% 35% 33% 28% 46% 42%
No real-time reporting 19% 9% 25% 18% 20% 21% 9% 13% 31% 23%
The effort to fill a roster 15% 11% 20% 13% 16% 16% 14% 11% 19% 32%
Too much absenteeism 14% 14% 13% 18% 10% 14% 14% 10% 16% 35%
Too much overtime 12% 9% 15% 13% 11% 14% 0% 8% 20% 16%
None - we have no challenges 20% 17% 11% 17% 30% 19% 30% 27% 11% 3%
Which metric(s) does your organisation use to measure the performance of its rostering / time & attendance
processes?
Accuracy 15%
22%
Summary:
47% of all respondents do not use any metrics at all to measure the performance or rostering / time & attendance processes – a 6 percentage point increase from 2019. There is significant variation by
organisation size: 52% of SMB respondents don't use any metrics, compared to 43% of mid-market respondents and just 23% of enterprise respondents. The use of all metrics has decreased slightly year-
on-year, with the exception of ‘compliance (labour regulation)’, which saw a minor increase. ‘Employee wellness’ – a new option in the 2020 survey – has special resonance to work rosters and schedules in
relation to fatigue management.
Insight:
The lack of metrics being utilised by SMBs is surprising given that earlier in this report it was found that 22% of SMBs said workforce management took up too much time relative to the value it brought. If
there are no performance measures in place, it’s highly likely the installed system is not being fully utilised, or there are time-consuming manual processes still in place. As the old saying goes, ‘old habits die
hard’. There are still many organisations that stick with what they know, regardless of the time taken.
For businesses operating in certain sectors – particularly retail and hospitality – people-related costs will always be top of mind. This focus will only escalate as organisations recover from the trials of 2020.
The effective and efficient rostering and scheduling of workers forms a key part of this. Cost control is a major focus, so not having up-to-date analytics or the ability to forecast accurately through use of
POS or weather data can lead to the unnecessary cost of over-scheduling, or the operational issue of under-scheduling.
‘Absenteeism / tardiness’ is the most popular metric tracked, which may point to other wider issues at play in businesses and shouldn’t be treated as a sole reflection on WFM or rostering / time &
attendance effectiveness. For example, high levels of absenteeism may point to a toxic culture, bullying or harassment. For assessment of WFM and rostering / time & attendance effectiveness, metrics
relating to data accuracy, compliance, overtime cost management and time taken for processing should all factor highly.
The increase in compliance (labour regulation) as a metric is not surprising due to the heightened awareness of wage theft in Australia and New Zealand. This is a big win for employees who can take more
comfort in knowing they are being paid correctly when their business is using a WFM solution.
Action:
● The lack of metrics is disconcerting. Even at an executive level, 55% do not use any metrics at all. However, what gets measured gets managed, so having a basic level of metrics is critical. With HR,
and in some instances even Payroll, wanting to obtain and sustain a seat at the executive table, these insights will be invaluable.
● Cost control in relation to staff rostering and scheduling can make or break people-related budgets – particularly in industries where shiftwork or irregular working hours are required. Utilise the
reporting functions and metrics available through rostering / time & attendance software to stay within budget and avoid staff-related cost blowouts.
● Don’t fall back on old processes. Organisations that are not supported properly through the post-implementation phase for new technology generally end up falling back on old processes or under-
utilising the newly installed system. Use the opportunity presented by new technology to re-examine the underlying processes and fine-tune or overhaul these if required.
Absenteeism / tardiness rates 19% 23% 22% 20% 14% 20% 12% 14% 23% 35%
Accuracy 15% 9% 15% 17% 15% 15% 14% 15% 16% 13%
Compliance (labour regulation) 15% 11% 13% 19% 13% 15% 14% 13% 18% 19%
Employee wellness 5% 9% 4% 6% 3% 4% 9% 7% 1% 3%
Number of missing or late timesheets 15% 17% 14% 18% 11% 15% 12% 13% 18% 16%
Overtime cost management 13% 11% 14% 13% 14% 14% 9% 10% 16% 26%
Time taken for processing 10% 6% 8% 11% 10% 11% 2% 8% 13% 13%
None - we don't use any metrics 47% 31% 41% 47% 55% 46% 53% 52% 43% 23%
Which of the following stages best describes your organisation's current state of HR and payroll
and technology for rostering / time & attendance?
Has fully implemented technology Does not have fully implemented technology
Which metric(s) does your organisation use to Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
measure the performance of its rostering / time &
attendance processes? n = 205 n = 129 n = 56 n = 20 n = 150 n = 84 n = 56 n = 10
Absenteeism / tardiness rates 24% 17% 30% 50% 12% 10% 16% 10%
Compliance (labour regulation) 18% 16% 21% 20% 11% 8% 14% 20%
None - we don't use any metrics 38% 45% 30% 15% 59% 63% 55% 40%
How does your organisation currently manage its rostering / time & attendance processes?
When it comes to the tools used for WFM and specifically rostering / time & attendance, ‘stand-alone time & attendance software’ and ‘integrated HR, rostering and time & attendance software’
saw minor drops compared to 2019. However, the biggest dip occurred for ‘integrated HR and time & attendance software’, which fell 7 percentage points from last year’s results. The only minor
increase was seen with ‘stand-alone rostering software’, which rose from 11% to 12%. It’s apparent that manual processes are still used extensively, as seen by the top-rated ‘paper-based rostering
and interpretation’ and the third-rated ‘employee clock in / out manual sign-in / time sheets’ options.
Viewing results by organisation size, it seems enterprise organisations are more open to emerging technology, with finger vein scanners the equal second most commonly used tool. In contrast, the
top choice for SMBs was ‘paper-based rostering and interpretation’.
Insight:
The use of paper-based rostering and interpretation by 30% of mid-market and 60% of enterprise organisations (for those without fully implemented technology) is naturally less common amongst
those who do have fully implemented technology (7% and 15% respectively). However, these are still high figures when one considers the relatively widespread use of technology for these two size
segments in other functional areas.
For those enterprise organisations with fully implemented technology, the preference is for ‘integrated HR, rostering and time & attendance software’ (40%), followed by ‘employee clock in / out
finger vein scanners’ (25%).
For mid-market organisations, the preference is for ‘stand-alone time & attendance software’ (29%), ‘integrated HR, rostering and time & attendance software’ and ‘employee clock in / out tablet
terminals with pin code / user sign-in’ (both with 20%).
How can these differences be accounted for? Most SMBs will add software to meet particular needs as and when they arise. It’s possible the experience with WFM has not been “painful” enough to
make the jump. Enterprise organisations, on the other hand, will often look to implement a platform that meets all their needs – as seen in the consistent showing for integrated platforms.
One emerging trend is the use of biometrics. Although fingerprint, face and voice scanning has been around for some years, they are only now gaining traction – and even then, there is some
reluctance. There are privacy concerns with facial recognition, and the concern over finger scanners is topical – that is, having multiple people touch the same scanner. However, once these
challenges are overcome – with touchless options, for example – it seems certain that biometrics will allow for employee monitoring and management at a highly secure and efficient level. Rather
than worrying about faked timesheets, entry into certain areas, and other, similar matters, employers can let technology handle all the work on the front end via biometric hardware and software.
Other areas to watch are geolocation and geofencing, aided by leveraging existing global positioning
systems (GPS). Geolocation is defined as the process or technique of using digital information processed via
the internet to identify the geographical location of a person or device. This technology can be programmed
to take location, date and time stamps when an employee clocks in or clocks out. Geofencing uses GPS or
Radio Frequency Identification (RFID) to create a virtual geographic boundary. This enables software to
trigger a response when a mobile device enters or leaves an area. The system can be configured to send
notifications to employees when they enter or leave the job site to clock in or clock out. Managers can be
notified when certain employees arrive at or leave a site.
1 in 9 respondents use stand-alone time &
attendance software Action:
It’s easy to take WFM solutions for granted – unless, of course, there isn’t one implemented. COVID-19 has
demonstrated the critical role such solutions can play. The abilities to stagger shifts and break times to
minimise crowding in high traffic areas, incorporate flexibility to allow for increased cleaning of common
spaces, and schedule enough time for employees to put on and take off protective clothing, are only possible
with smart WFM software.
Consider current strengths and gaps in existing HR-related technology, including WFM software.
Experienced HR observer Dave Ulrich suggests asking these four questions as part of an overall HR
technology audit:
How does your organisation currently manage its Junior to Mid-level Senior C-suite SMB Mid-market Enterprise
Overall Australia New Zealand
rostering / time & attendance processes? mid-level management management leaders
(1 - 199) (200 - 1999) (2000+)
Employee clock in / out access / swipe cards 8% 6% 8% 8% 10% 8% 7% 3% 15% 20%
Employee clock in / out bundy clocks / time clocks 5% 9% 5% 5% 4% 5% 5% 3% 5% 17%
Employee clock in / out finger vein scanners 11% 6% 12% 10% 11% 11% 5% 6% 14% 30%
Employee clock in / out manual sign-in / timesheets 15% 9% 12% 18% 15% 15% 17% 12% 15% 30%
Employee clock in / out tablet terminals with facial
5% 6% 6% 3% 6% 6% 0% 5% 5% 7%
recognition
Employee clock in / out tablet terminals with pin code
11% 9% 9% 13% 10% 11% 7% 8% 14% 13%
/ user sign-in
Employee clock in / out with mobile app / geofencing 9% 9% 10% 10% 8% 9% 12% 9% 10% 10%
Integrated HR and rostering software 7% 12% 13% 6% 2% 7% 5% 5% 8% 17%
Integrated HR and time & attendance software 9% 18% 13% 6% 6% 8% 10% 8% 7% 17%
Integrated HR, rostering and time & attendance
12% 21% 10% 10% 12% 12% 12% 9% 13% 33%
software
Paper-based rostering and interpretation 18% 18% 17% 20% 18% 18% 19% 16% 19% 30%
Rostering and interpretation spreadsheets 11% 9% 10% 12% 12% 12% 7% 9% 16% 10%
Stand-alone rostering software 12% 9% 22% 8% 11% 13% 7% 10% 11% 27%
Stand-alone time & attendance software 18% 21% 19% 21% 14% 19% 14% 16% 22% 20%
I don't know 10% 15% 12% 5% 14% 10% 12% 12% 10% 0%
Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
How does your organisation currently manage its rostering / time &
attendance processes?
n = 202 n = 127 n = 55 n = 20 n = 149 n = 83 n = 56 n = 10
Employee clock in / out access / swipe cards 8% 4% 15% 20% 8% 1% 16% 20%
Employee clock in / out bundy clocks / time clocks 6% 6% 5% 10% 3% 0% 4% 30%
Employee clock in / out finger vein scanners 13% 9% 16% 25% 7% 1% 11% 40%
Employee clock in / out manual sign-in / timesheets 13% 13% 11% 20% 17% 12% 20% 50%
Employee clock in / out tablet terminals with facial recognition 7% 7% 11% 0% 2% 1% 0% 20%
Employee clock in / out tablet terminals with pin code / user sign-in 12% 9% 20% 5% 9% 6% 9% 30%
Employee clock in / out with mobile app / geofencing 11% 12% 11% 10% 6% 4% 9% 10%
Integrated HR and rostering software 7% 6% 9% 10% 7% 4% 7% 30%
Integrated HR and time & attendance software 10% 9% 9% 20% 7% 7% 5% 10%
Integrated HR, rostering and time & attendance software 18% 13% 20% 40% 4% 1% 5% 20%
Paper-based rostering and interpretation 12% 13% 7% 15% 27% 20% 30% 60%
Rostering and interpretation spreadsheets 9% 9% 9% 10% 15% 10% 23% 10%
Stand-alone rostering software 9% 10% 7% 10% 15% 11% 14% 60%
Stand-alone time & attendance software 22% 20% 29% 15% 13% 10% 14% 30%
I don't know 9% 10% 9% 0% 12% 14% 11% 0%
Saturation map scale:
Lowest Highest
value value
Overall, how would you rate your organisation's internal systems and processes for efficiently and effectively
managing rostering / time & attendance?
Excellent 10%
Good 31%
Average 31%
Poor 15%
Very poor 4%
I don't know 9%
n = 351
Summary:
Overall, rostering / time & attendance and WFM systems and processes were reasonably well rated. It’s significant that satisfaction with internal WFM systems and processes more than doubled
across all markets when technology was implemented. SMBs (45%) and enterprise organisations (40%) were the most satisfied, rating their systems and processes as ‘good’ or higher, while mid-
market organisations were slightly less impressed, with only 30% granting the scores of ‘good’ or above. More mid-market organisations (27%) rated their systems and processes as ‘poor’ or below
when compared to SMBs and enterprise organisations.
Insight:
Having the right systems in place can take pressure off business owners and help them ensure they are compliant with current legislation and pay obligations. While the level of satisfaction was
generally fair for WFM and rostering / time & attendance systems and processes, there is plenty of room for improvement. Clearly, technology is an enabler here. Manual processes are unable to keep
up with the demands and requirements of modern-day workplaces. The modern industrial landscape is complex. Mistakes can and unfortunately do happen – but complexity, data collection mistakes
and misinterpreting industrial instruments such as Enterprise Bargaining Agreements and Awards is no excuse for pay-related mistakes.
Viewed in this way, it’s no surprise that mid-market organisations are suffering from ‘growing pains’ and may be slightly less impressed with the systems and processes they have in place.
WFM tools can go some way to effectively and efficiently managing business processes and wage cost, especially when measured against error-prone and time-consuming manual systems.
Action:
● Reassess the critical role that effective workforce management can play in business success. WFM started as a scheduling process but has since grown into a multi-faceted framework for
maintaining human capital, budgeting and workforce scheduling. The ultimate goal is to optimise productivity and reduce unnecessary expenditure.
● Understand the work required to do each job task, while prioritising efficiency and safety. From that seemingly simple basis, it’s possible to determine demand-based forecasts, schedule the
appropriate number of workers and measure performance to provide feedback and incentives to workers. Along the way, employees are paid fairly and accurately for the hours worked.
● WFM doesn’t just focus on employee performance and scheduling, it also determines how organisations should invest in their employees. A solid WFM strategy involves online training and
supervisor-based coaching to ensure employees are up to date on the latest skills for their jobs. When implemented correctly, WFM and careful rostering / time & attendance can help reduce
costs and improve customer service through consistent and automated monitoring of the workforce. It becomes easier to predict future demands for seasonal talent and can assist in making
smarter decisions if cuts are needed within a certain department.
● If resources allow and the task is big enough, consider creating a dedicated workforce management analyst role. The role requires a combination of human resources, analytics and operations
skills. Such a professional is responsible for collecting data on the organisation’s workforce, analysing that data to determine trends, and creating plans and operational goals for the business.
Good 31% 32% 35% 25% 34% 30% 36% 33% 24% 37%
Average 31% 38% 28% 38% 23% 31% 31% 31% 32% 27%
Very poor 4% 3% 3% 2% 9% 4% 7% 2% 7% 7%
Overall, how would you rate your organisation's Total resp. SMB Mid-market Enterprise Total resp. SMB Mid-market Enterprise
internal systems and processes for efficiently and
effectively managing rostering / time & attendance? n = 202 n = 127 n = 55 n = 20 n = 161 n = 83 n = 56 n = 10
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