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employee relations

What is employee relations? Here’s how it benefits your organisation

from  March 2, 2022 | 5 min read

Employee relations’ is an umbrella term used to refer to the relationship between employees and their employer. It refers to human resource elements like employee engagement, employee satisfaction, employee motivation, employee retention, employee performance appraisal. 

Employee relations is all about the relationship between employees and their employer. It is not just about individual experiences, but more broadly about the quality of the workplace culture. 

In this article, you will learn about the importance of employee relations and how it can benefit your organisation.

Importance of employee relations

The importance of employee relations in any organisation cannot be stressed enough; it has a positive impact on all business activities

From managers to receptionists to floor workers, employee relations makes it essential to keep workforces content with their jobs. It improves their motivation, encouraging employees to go above and beyond expectations - resulting in fewer mistakes and higher quality output overall.

A good employee relations program can help an employer gain higher employee satisfaction and employee retention rates.

How employee relations benefit an organisation

1. Improved employee performance

For employees to be more motivated and happy at work, they need to have high morale and be more excited about their jobs.

2. Increased productivity in an organisation

Happier and motivated employees are more productive, leading to a rise in profits. According to Gallup’s meta-analysis, a 21% increase in productivity and profitability is seen in an organisation with higher engagement.

3. Higher retention rates and lower turnover rates

People are more likely to work harder and be loyal to their employers when they have a high level of employee engagement. This also contributes to higher employee retention rates and reduces employee turnover.

4. Better communication

Good employee relations help employees reduce their fear of expressing themselves which results in exchanging free flow of information and opinion. A good employee relations program helps to remove fear of retribution when asking questions or raising issues. If employees are afraid they will be punished for speaking up, they won’t express their concerns.,.

5. Less calling in sick to work

High absenteeism can happen if an employee does not enjoy the company culture or workplace environment. Reducing absenteeism results in higher productivity levels for the organisation.

Fewer people give false excuses if they love their job. According to the meta-analysis by Gallup, top-level managers saw a 37% lower absenteeism in workers. The study also found strong connections between engagement and performance. 

6. Reduced costs in recruitment

Good employee relations results in a drop in costs associated with recruitment, training, and low morale within organisations, all of which ultimately benefit employers as well as workers - it's a win-win situation.

7. Better customer service

Employees are more likely to provide better customer service when they have a stable work environment and love what they are doing.

When the employees are frustrated in the workspace it reflects in their job.  Good employee relations help to boost employee morale and engagement which results in a stable work environment. This ultimately leads to better customer service. 

8. Innovation

Employees innovate when they feel valued in the workspace. When they see their work is being valued by their superiors, it makes them happier. 

As long as there are good relationships between employees and managers, feedback is well received and not taken personally by them. Employees will be open to suggestions on how to improve operations for higher output and better quality of products. 

This ultimately results in improving profits for the company while still upholding good labour practices that benefit all parties involved.

9. Less chance of financial loss or bankruptcy

Trust within organisations is maintained by positive working environments. By fostering cooperation, companies can avoid financial losses or bankruptcy because everyone feels included. 


There are many ways that better labour relations practices benefit organisations. Only by making sure workers feel encouraged and satisfied with their work. 

Modern technology can help streamline HR processes and get work done a lot faster by automating several processes. A software tool like Unit4 Prosoft offers a one-stop solution for all your HR needs–recruitment, payroll, time and attendance, employee training, and more.

Unit4 Prosoft

Unit4 Prosoft have been serving customers in Asia for 30 years and is trusted by over 1,000 businesses across the APAC region in the manufacturing, healthcare, retail, construction, and professional services industries. Unit4 Prosoft HRMS has modules that support every aspect of your HRMS programs and allows you to manage people’s entire hire-to-retire cycle with a central control center and database. Your people get the flexibility and freedom to have what they need—how, when and where they need it.