The Benefits & Importance of Employee Relationship Management? A Guide for HR Managers

Companies are having to make some big changes to all aspects of their business in 2022 due to several factors, namely the global pandemic. More businesses are allowing for remote work or even give flex days to accommodate employees and new health standards. With fewer people in the office and more employees engaging over Zoom and other employee management software platforms, we want to focus on employee relationship management because it is crucial to your company’s success in 2022. How so? Well, good employee relationship management can help to reduce conflicts, reduce turnover and increase productivity. Plus, middle management can focus on the big picture, giving top managers more time to focus on driving profits and revenue.

What Is Employee Relationship Management?

Employee relationship management, is when you manage the relationship between all employees in your company; it starts from an employees’ first day and lasts until they leave the company. The relationship is either between the employee and the employer or between employees. Good employee relationship management goes far beyond whether or not you and your employees get along. Proper employee relationship management must include effective communication, employee satisfaction and implementation of the right tools and technology. 

The Small Business Chronicler defines employee relationship management as “a process that companies use to effectively manage all interactions with employees, ultimately to achieve the goals of the organization”. 

Or in other words, it’s the process a company uses in order to manage every single interaction with their team and how they interact with their team. The goal of employee relationship management is to reach the company goals and HR plays a key part in the whole process. HR is responsible for training managers on how they can effectively create and maintain relationships with employees. Plus, the HR department measures and monitors the relationships to verify everything is on track and running smoothly.

💡 You might also want to read our round-up of the best free hr software for small business (2024)

Why Employee Relationship Management Is Important

To start, the number one reason why employees resign from their job is because of the relationship with their manager and coworkers. When the relationship between the manager and employee is strained, there are two possible outcomes that are never good for businesses. One, the employee quits. Or two, the employee stays, the relationship is seriously strained and can lead to other employees feeling the same way. Here’s the bottom line, maintaining a strong employer and employee relationship is crucial to the company’s success. A positive relationship only leads to more productivity, more efficiency, less conflict and low turnover. 

So, with all of that in mind, how can you build and maintain a healthy, positive employee-employer relationship? By using the right employee relationship management software. What does this software really do? It’s your tool to manage employee engagement, development, and relationships.

What Role Does HR Play in Employee Relationship Management?

Human Resources will be the first responders to crises between relationships in the workplace. Having this responsibility puts extra pressure on the relationships between HR and employees. Although this is important, HR can’t afford to only focus on their own relationships with employees, but rather they need to pay attention to how everyone else in the workplace is getting along. 

The hurdles that can get in the way of healthy coworker relationships will differ from those between employee to manager relationships. For that reason, HR will have different goals and outcomes when it comes to employee relationship management: 

Goals Between Employees and Employees

• Boost employee morale: positive company culture where employees come excited to work!
• Build Camaraderie: more collaboration for a more productive workplace.   
• Skill Share: growing on individual strengths to become a stronger team as a whole. 

Goals Between Managers and Employees

• Open Door Policy: let employees be transparent about their work conflicts.
• Personable: fostering relationships that are professional yet still genuine. 

Although Human Resources should approach employee-to-employee relationships differently than employee-to-managers, it all results in 6 benefits that can better your company. Read on to learn more about what those are!  

6 Benefits of Employee Relationship Management:

Keep employees involved from day one because communication is key to building strong employee relationships and growing trust among teams. As a manager, you have to regularly communicate with your employees – send them updates on company matters, acknowledge victories (sales, new customers, etc.), share customer success stories, celebrate “mundane” things (birthdays, anniversaries, personal milestones like marriage, new babies, etc). There is a direct positive impact on employees who feel engaged, connected to their work and in the loop; employees become more motivated and work harder!

With employee relationship management systems, you can easily streamline communication. Either start a one-on-one chat or group chats targeted via team, department, location, etc. Track who read messages and allow for social functions like comments and likes. The more open and transparent your company is, the stronger the relationship.

Kristina Martic, digital marketing and employer branding expert argues “to deliver a good employee experience, employers need to be ready to improve the way they communicate with employees. Open and transparent communication helps employees feel involved which often leads to higher employee engagement”. There’s no way your company’s employee communication management is picture perfect and that means there’s always room for you to make improvement!

Give them a place for their voice to be heard and respected. Employees should be given a platform to share their thoughts and ideas on company matters. When an employee believes that their input is highly and genuinely regarded, it will enhance their determination to excel in the company and to work toward increasing the company’s goals. Use employee relationship management software to send surveys to consistently gain feedback from your employees. Send surveys after a meeting, a company event, a team building exercise, etc. Employees can fill out surveys anonymously or you can ask to include their personal information; each of has its own benefits. Create a suggestion box that’s always accessible so employees have direct access to voice their ideas at any time.

📚 You may be interested in our in-depth guide on the best free HR software of 2024.

Show appreciation and gratitude to your employees because acknowledging and reinforcing good work is what inspires your employees to keep it up. If the sales team finished a killer project or closed some great deals; send a company wide announcement letting everyone know their hard work hasn’t gone unnoticed and congratulate them on their perseverance! Give an employee public praise or send a message via the employee relationship management software and allow coworkers to comment and like the update. This will help to inspire the rest of your employees as it cultivates a culture of appreciation and inspires employees to work hard. Make employees aware that their hard work is NOT going unnoticed! 

Instead of spending tons of time and money trying to find new employees because your turnover rate is high, make sure you’re retaining your top employees and rewarding employee’s achievements and successes. A Forbes article advises business owners “to find out what makes your employees happy. Once you do that, you can understand what motivates people and take the steps necessary to achieve an environment that makes them an asset to your team”. 

As we already mentioned, employees leave a company because of poor employee-employer relationships so by showing your appreciation, you are a step closer to retaining your top employees and lowering that turnover rate.

When you lower the turnover rate, you are ensuring that employees stay with your company for longer, therefore this helps them gain wide-ranging knowledge of company policies, practices, and processes. When your employees have tons of institutional knowledge, they serve as an excellent resource. How so? Well, they’re better skilled, more efficient and can offer excellent training for new hires.

According to a study by Covestro, 71% of executives say employees’ desire for purpose is “prompting HR to rethink certain work policies such as paid time-off for volunteer or community work, flextime and/or telecommuting.”  Organizations need to develop policies and procedures that reflect their vision, values and culture as well as the needs of their employees. Once they are in place, enforcing these guidelines is even more important.

Employee relationship management software can help reinforce the commitment to the company and that only equals better employee engagement and employees are more committed to tasks. With the right strategies in place, such as shared goals, trust, communication, HR practices and leadership styles, the employee relationship management software helps employees achieve targets set for their job roles. These strategies further enhance and boost effective communication channels so information needs of employees are met. 

The software helps focus on employee performance management, growth and development so that there is healthy competition amongst the employees. This helps to better working conditions and establishes healthy relationships so that there is more sense of belonging among the employees – that is key to strengthening the company culture.

When you have amazing employee relationships, you have a direct impact on the growth and revenue of the company. This only leads to a happier work environment for the employees and in turn, the customers and clients. When you have engaged, motivated employees, you have a much better customer satisfaction which only leads to more sales and profit growth.

Have You Downloaded An Employee Relationship Management Software Yet?

Streamline all your internal operations with an employee relationship management software like Connecteam. Just about every employee relationship management software is cloud based so that it can work across the board, from desktop to mobile (including Android and iOS). Connecteam is the leading employee relationship management software available anywhere, at any time. It’s easy to use and affordable for every business, no matter the size–for just $29 a month for up to 30 users, you can create better relations at the push of a button. Or you can start now for free with our free plan to better understand if Connecteam is right for you!