After so long in the doldrums, news that the UK economy is growing at its fastest rate since 2007 and that a record number of people are now in work (ONS1) is hugely welcome. A healthy economy normally signals greater movement of individuals confident of their ability to secure new positions and fewer redundancies to control costs. However, the latest CIPD Labour Market Outlook (Feb 2014) suggests that plans for job creation are tentative and that there is a ‘productivity hangover’ affecting the UK economy. Clearly the challenge for employers who cannot offer above the line pay rises in 2014 is how to motivate staff to work harder without any increase in their pay and benefits. And how to encourage staff not look elsewhere for a better deal…
Fortunately there was growing recognition last year amongst C-Level executives that improving employee engagement could offer a tangible solution to this problem as a cross-enterprise strategy to drive business success. They have found that linking employee engagement to customer experience, customer engagement and business performance can have a real impact on the bottom line. Performing a gap analysis between what frontline employees and customers say about the same experience provides a powerful way of identifying broken processes. It’s also by far the best way to empower and motivate employees and reduce the cost of employee churn.
According to research carried out by U C Berkeley and MIT, expenses related to recruitment, training, managing the departure process for employees and lost productivity can be as high as 150% of annual salary. However the benefit of retaining experienced employees is not just about the money. It lies in their contribution to the overall productivity of an organisation because they are more likely to handle higher workloads, make smarter decisions and avoid serious errors. Experienced employees are also fantastic role models for new recruits, helping them learn new skills and processes more quickly and enabling them to contribute to the business in a much shorter timescale.
In spite of this, companies are often unaware of the issues that can impact employee engagement and cause employees to underperform or walk out of the door because they don’t ask. Annual appraisals and employee engagement surveys are part of the solution but a much more dynamic, ongoing approach is needed for modern business. The only way to find out what motivates and demotivates an individual before it’s too late is to ask for feedback throughout the year, so that businesses can take action and measure results along the way .
The simple fact is that loyal and engaged employees forge deeper and longer lasting relationships with customers, which has a significant impact on customer satisfaction, loyalty and therefore spend. Studies carried out by Harvard Business School provided some useful insight into this problem:
- At a security firm, it takes nearly 5 years for a broker to build relationships with customers that generate $1m in annual commissions.
- At a large property and casualty insurer, customer satisfaction dropped from 75% when a single service worker left the company
- At a leading fast food chain, stores with the lowest turnover rates enjoyed 55% higher profits than stores with the highest turnover rates.
Clearly if companies want to proactively address these issues they need take a much more holistic approach to managing the employee lifecycle. Pulse programmes that survey employees at key stages in the employee lifecycle are far more likely to identify training needs, set goals for cyclical appraisals and reward attainment, and flag any issues with team members and line managers that might hinder performance or encourage an individual to seek work elsewhere.
What this means in practical terms for companies that want to harness the Voice of the Employee is they need to find out what motivates their staff, what matters most to them and which changes will have the greatest impact on retention and productivity overall.
Keep the following tips top of mind:
- Survey employees at scheduled intervals or in real time as service interactions and lifecycle events take place.
- Use this ongoing stream of data to find out if new ways of working, changing job responsibilities, skill development and certain rewards and benefits are helping to motivate employees to be more productive or to seek internal promotion, for example.
- Link employee engagement with customer engagement, and use real-life example to show employees how their actions impact customers. Understanding the importance of their role in the wider business can be more incentivising than pay increases.
- Engage employees in the process of improving their working environment and developing corporate goals in order to foster a sense of participation and ownership which should lead to increased commitment and loyalty.
- Analyse feedback from employees to identify individual concerns but also to highlight wider trends. Use hard data to pinpoint the most important issues and target the changes that translate into lower dissatisfaction rates and higher retention rates so that you know how much to invest in making improvements.
- As you implement changes, quantify the impact of your efforts through follow-up surveys to ensure that improvements are motivating employees and helping you to achieve short and medium-term company goals.
It’s this concerted effort to measure the relationship between engagement, retention, investment and profitable growth that will help companies shake off the productivity hangover and keep valued team members within the fold.
Tore Haggren holds the position of Senior Vice President, Voice of the Employee at Confirmit.
He initially joined Confirmit in 1998, two years after the company was founded in Norway. During his tenure, he established offices in London, New York and San Francisco with a focus on Market Research and Voice of the Customer. In 2006, Haggren shifted his focus to successfully building Confirmit’s presence in the Voice of the Employee (VoE) market. Today, many of the leading employee engagement consulting companies have standardized their production-delivery system on the Confirmit solution, making it a fundamental part of how their businesses operate. He is committed to helping companies take a strategic approach to understanding the employee lifecycle and harnessing the Voice of the Employee to drive business change.