“To win in the marketplace you must first win in the workplace.”
– Doug Conant, former CEO of Campbell
Employee engagement – why now and why again?
According to a recent Gallup global study, only 13% of employees are engaged at work. 63% are not engaged and 24% are actively disengaged. Disengagement affects performance and leads to annual losses, Gallup estimates, of $450-550 billion in the US, €112-138 billion in Germany and £52-70 billion in the UK.
Five years after the 2008 recession, companies and countries are still struggling, and employee engagement is an area that can contribute to growth. Indeed, a survey by the Economist Intelligence Unit and StepStone found that talent is perceived as the overall third driver of growth (cited by 41% of senior managers), second only to the economic recovery and the availability of credit.
Most companies already have well-established programs to engage with employees, which have been in place for many years and have worked in the past. So, what happened? Why aren’t they as effective today?
For starters, people are changing – they have different expectations, different values and behaviours, and new communication preferences. To make matters more complex, the work environment is changing too – big companies are battling a trust deficit, growing larger and more global, and competing for talent with start ups, non-profits, social good organizations and new Asian giants.
As a result, companies are finding it’s crucial now, again, to re-understand their employees, re-engage their workforce, re-focus on their employer brand and communicate their company’s story in a relevant way.
In this essay, we’ll take a look at 5 Catalysts that are driving the need for re-engagement, 5 Drivers companies are leveraging to engage with employees today, and 5 Trends to watch out for in the near future.
Defining employee engagement
In this essay, “employee engagement” refers to the ongoing engagement with employees throughout the entire employee lifecycle, from recruitment and onboarding to change, development and exit. Engagement is two-way, like a dialogue that allows employees to contribute to and participate in the organization’s objectives. As part of this, they are more likely to fulfill their own potential.
In this way, engagement is seen as part of the “deal” where both employer and employee make commitments and derive benefit.
5 Catalysts for Change
Broadly speaking, five major trends are catalysing the need for more relevant employee engagement strategies: the Information Economy, New Generations in the Workforce, New Values, Changing Work Environments and the global Economy.
1. Information Economy
People share experiences and seek information in new ways.
For years, employees have been sharing their opinions and experiences on their personal social networks and blogs. Now, increasingly, they are sharing on anonymous review-sites like Glassdoor (global), Kununu (Germany), Rate My Employer (Canada), Job Advisor (Australia), and The Job Crowd (UK). Potential recruits actively seek out these social conversations and reviews – which they trust more than the company’s message – and which influence their career decisions.
For companies, the line between private and public – between what happens inside and what’s seen on the outside – is growing fainter everyday. By choice or not, employees have become ambassadors for their employers and their social voice has the potential to carry across the web. A recent example is Maria Shifrin’s “I Quit!” video, which received 16 million views in less than two months and escalated Taiwanese animation company Next Media Animation to the global spotlight.
People have new sources of information, and a company’s message is no longer consumed in isolation, but as a part of a larger content mix – where employee reviews, social conversations and external rankings hold a significant weight. Now more than ever, it’s important that the company’s message is aligned internally and externally (and that a crisis strategy is in place!)
2. New Generations in the Workforce
The workforce has seen a steady influx of Gen Y and Gen C workers, who bring with them new skills, expectations and behaviours.
Gen Y workers were born between the 1980s and 2000s and grew up with mobile and digital technologies. Beyond expecting their employers to be tech and social savvy, they expect the opportunity to do meaningful work and grow fast. They appreciate a flexible work environment that supports independence and creativity. Gen Y is not afraid to share their opinion and expects two way communication and collaborative assignments.
Gen C workers are not defined by age, but rather their affinity for content creation and curation. Members of Gen C are bloggers, curators, photographers, podcasters, videographers and artists. Like Gen Y, Gen C expects the opportunity to collaborate and co-create with peers and with the organization.
Perhaps the most important difference between these generations and Gen X is how they see the role of the job. For Gen Y and Gen C, the job is no longer the first step to buying a house, getting married and having kids (indeed many members of Gen Y in the US are no longer buying even cars!). Instead, the job has simply become a means to fund their passions. Increasingly, Gen Y and Gen C are seeking alternative sources of income (like crowdfunding or collaborative consumption) so that they can forgo the job altogether and spend more time doing what they love.
When do choose to have a job, Gen Y prefers jobs that offer the opportunity to make a difference in their field, in their community or to the planet.
3. New Values
People feel a strong need to give back to society, to minimize their environmental footprint and to contribute to social good and sustainable development – both in their personal lives and also in the workplace.
This sentiment is powerful among Gen Y, especially those in emerging markets (like Central and South America and India), and also among older employees who wish to leave behind a positive legacy.
People want to work for ethical companies – companies that walk the talk, contribute to social solutions (not problems), and pave the path for employees to play a role as well.
4. Changing Work Environments
The competitive landscape is changing with new demographics in the work place and new competition for talent.
Workplaces are experiencing a drastic shift in demographics as more women enter the workplace, more people delay their retirement, and more people enter the workforce in developing countries. These shifts will pressure companies to design new programs and policies that keep in mind new priorities, needs and cultural values. With the east and the south making up more of the global workforce, western values will no longer be the norm.
In terms of recruitment, companies are now competing with start-ups, tech companies and Asian giants (like Samsung). The inverse is also true, as multinationals and non-tech companies recruit the diverse talents needed to thrive in the digital and global era. These realities will push all companies to re-consider their internal work cultures, and to strengthen their employer brands and differentiate themselves.
Companies and countries have not fully recovered from the effects of the 2008 recession – productivity and profitably are still key areas of concern.
Gallup’s study finds that employee engagement impacts key performance indicators: absenteeism, turnover, shrinkage, safety incidents, quality, customer rating, productivity and profitability. The chart below demonstrates how companies with the highest engagement rates outperform those with the lowest.
Companies are beginning to acknowledge the relationship between employee engagement and low growth rates, and are slowly beginning to take action. Governments are beginning to notice too – in 2012, the UK government launched the Engage for Success movement to build the business case and a practical guide for employee engagement, to better equip organizations and employers.
5 Drivers of Engagement
New generations, new values and major economic trends have changed the way brands communicate with all stakeholders – including consumers and employees. It’s only natural that some of the drivers that steer engagement with consumers would also apply to engagement with employees. In addition to the common drivers of Social, Storytelling, Collaboration and Sustainability, we have also observed a fifth that applies strongly to employees – Fulfilment.
These drivers relate both to employee’s needs and expectations as well as business needs and objectives. Adoption thus leads to a win-win for all.
People are familiar with social media and actively participate in creation and sharing of knowledge and ideas. For companies, there is value in capturing this energy and creativity, bringing it in-house and channelling it towards business objectives.
Many companies today are present and actively share news, milestones and photos on popular social networks like LinkedIn, Facebook, Twitter and Pinterest. Some create their own internal enterprise social networks to connect employees across the world, provide a private environment for employees to share ideas and discuss business, or guide new recruits in their 90-day induction period (NS-LIJ’s Career Compass). Common enterprise social networking solutions include Microsoft SharePoint (which includes Yammer), IBM Connections, Jive, Blue Kiwi, SAP Jam, Tibbr, and Yoolink PRO. Several companies also integrate elements of gamification (missions, points, badges, rewards, recognition, leaderboards) into their social programs to increase participation. BunchBall, Socialcast, Work.com (by Salesforce) offer gamification apps, some of which can be integrated into enterprise social networks, websites and social networks (BunchBall’s Nitro).
Some companies extend the engagement of traditional programs by integrating social into live experiences. For instance, HR service provider Randstad created an online space to energize global employees about its 50th anniversary celebrations – the company organized Randstad 50 Gold Club parties in 26 locations and created an online space complete with a DJ booth with podcasts, a brand quiz, a competition around brand values, and live streams of parties taking place across the company (video) (MSLGROUP client).
Several companies are also integrating social into their recruitment programs. For instance, Akbank created a virtual workspace at 5N1Kariyer.com (video), to introduce the company and its people to future recruits. Some companies use social networks to get to know candidates better and identify the right talent. For instance, Siemens launched The Manager’s Call on Tumblr and asked potential recruits to share their thoughts on various topics through blogs and comments – the most active candidates stood a higher chance of getting selected to the Siemens Graduate Program.
Like consumers, employees too like to experience and contribute to engaging stories. For companies, communicating effectively is crucial to inspiring participation and explaining brand values and change communications. Simply put, if you want employees to adopt new values or change behaviour, you need to ensure your message is understood.
Companies often highlight stories of employees to demonstrate brand values in action. For instance, when chemistry giants Solvay and Rhodia merged, they highlighted stories of employees in internal communications. Sometimes, companies crowdsource employee stories (Philips All Employee Jam (video)) or ask employees to nominate each other and share inspiring anecdotes (Team GSK (MSLGROUP client)).
Some companies are creating cutting-edge storytelling platforms to capture and showcase the voice of their employees. For instance, Intel showcases content its employees are consuming on social curation platform iQ, and IBM aggregates content its employees are creating on the platform IBM Voices.
Companies have also used creative storytelling to brand themselves as an employer of choice. For instance, Heineken created the web video The Candidate to demonstrate that its external brand (beer=fun) is aligned to its internal corporate culture. Altran created the web video series Altran Career Live Chat (video) to share its latest innovations and news, encourage recruits to “Ask the Boss” questions in real-time, share employee stories and provide tips on applying for jobs.
People want to collaborate on projects and have a say in the company’s strategy and direction. For companies, collaboration is increasingly a necessary skillset to ensure knowledge sharing across departments and across geographies.
Companies use social media and social business tools to collaboration on various types of projects internally. Several companies use enterprise social networks or collaboration platforms (Basecamp, Evernote, Trello, Zoho, Azendoo, SocialCast (video), MSLGROUP’s People’s Lab) to coordinate group projects, facilitate co-creation or crowdsource ideas and opinions. For instance, MSLGROUP invited employees to work in teams and submit proposals on its intranet around three business challenges in the Together Works Better competition. Heineken invited its employees to vote for their favourite candidate on its intranet when hiring an intern for Champions League (The Candidate). Some companies use blogs to create virtual universities and encourage knowledge sharing within the organization (Marsh University). Others have used live online meetings to invite discussion around brand strategy (AXA (MSLGROUP client)) and to introduce new brand identities (GDF SUEZ (MSLGROUP client)).
Some companies also encourage collaboration externally, on social media, to brand themselves as an employer of choice (ING Next Gen Banking (video)) or to identify the right talent (Siemens The Manager’s Call).
People care about their personal impact and their employer’s impact on the planet. For companies, sustainable growth is increasing in importance because of stakeholder’s values, and also the depletion of natural resources and increases in operational costs. Being good is now good business.
Several companies involve employees by encouraging them to identify opportunities for sustainable development. Honda crowdsources ideas on how to optimize facilities and processes at its annual Innovative Ideas Convention. GE organizes elaborate Eco Treasure Hunts and challenges employees to physically hunt opportunities for optimization and to invent solutions. Some companies create participatory programs that leverage the size of their workforce. Levi’s encouraged employees to wear the same jeans for five days and share photos on their social networks as part of its Go Water>Less challenge.
Other companies initiate or invest in sustainable development programs to meet business objectives and to fuel their reputation as a socially responsible company. For instance, AT1T, Facebook and eBay identified opportunities for optimization or monitoring of consumption, packaged these learnings and are striving for scale by sharing with public organizations and other corporates (AT&T Building Water Efficiency toolkit, Facebook open compute, eBay Digital Service Efficiency dashboard).
Yet others invest in collaborative social innovation initiatives to encourage students to start thinking about social challenges (Sygenta Thought For Food Challenge, Siemens Future Influencers, Dell Social Innovation Challenge, HP Social Innovation Relay), to fund social entrepreneurship (Mahindra Spark the Rise) or to partner with governments in implementing solutions (IBM’s Smarter Cities Challenge). Employees often play a role in these initiatives either as judges, mentors or project managers.
Beyond a stream of income, people expect more from their jobs today – ownership, meaningful work, social contribution – their personal motivations differ. For companies, there is economic value in ensuring employee fulfilment – both to maintain retention costs and to ensure better performance.
Companies engage their people around a range of purposes, depending on their brand promise, the industry they are in and the type of workers they require. Online shoe seller Zappos focuses on employee happiness and designs programs and policies to empower employees and celebrate achievements. Google focuses on innovation and allows employees to spend 20% of their time on personal projects. Starbucks focuses on local communities and facilitates employee volunteering.
Sometimes, employee needs differ based on job function or demographics. For instance, mobile employees at Nestle faced challenges settling into new locations because their spouses were unable to find jobs. To address this, Nestle launched the International Dual Career Network to support spouses. Another example – BMW realized that the average age of its engineers was rising and could impact productivity. To address this, BMW introduced ergonomic changes within its factories to reduce health challenges and maintain output (Today for Tomorrow).
5 Trends for the Future
1. Growing collaboration between HR and Communications across geographies
As the need for robust communication strategies increases, we will see the convergence of HR, internal & external Communications, and to some degree Marketing – these functions will work together closely to design new age employee engagement programs. HR brings a deeper understanding of the employee audience – which is very distinctive from external audiences. Communications typically oversees engagement activities – these are not necessarily the preserve of HR. Marketing offers the methods, channels, approaches and budgets.
This is becoming a reality in markets where employee engagement is mature (US, UK, France), and is soon becoming a reality in other markets in Europe, Asia and Latin America.
2. Growing importance of Employee Engagement as more companies undergo change
As the trust crisis and economic instability continue, employee engagement will be a key priority for most industries. Industries that are undergoing drastic change, like healthcare, will be pressured to design better engagement and change communication strategies. In Asia, multinationals are facing unprecedented competition for talent and have already begun to focus on their employer brand to attract top talent.
3. Growing adoption of Social Business Tools
According to a recent MIT Sloan Management Review survey, 78% of executives said that achieving digital transformation will become crucial to the organizations in the next two years. As executives continue to focus on digitization of the workplace, we will continue to see growing adoption of social business tools. This growth may also be catalysed by the big data ownership debate – more companies are beginning to realize they do not own their data on social networks and must choose between staying on popular social networks or shifting their social employee engagement programs to owned platforms.
In addition to using social business tools to engage employees, companies will also explore the use of these tools in engaging vendors.
4. Growing maturity of enterprise solutions
As consumer social networking continues to race ahead, enterprise solutions are steadily catching up. Enterprise solutions are becoming more robust, through acquisition (Microsoft – Yammer, Atos – Blue Kiwi), investment and integrations (BunchBall Nitro for Salesforce, IBM Connections, Jive, NICE, SAP Jam). We are also seeing more collaborative platforms that focus on design and mobile accessibility (Trello), which will push the industry towards a standard that is more in-line with the user experience people are used to as consumers.
5. Evolution of The Job Contract
As companies continue to hire more part-time workers, remote workers and freelance workers, the conventional job contract will come under scrutiny and will be an area to watch. This is especially being catalysed by the success and growth of freelance websites like Odesk.com, Freelancer.com, eLance.com and Zhubajie which offer jobs that range from the common suspects writing, web-programming, data entry and design, to legal services, customer service, accounting and HR. (These four companies alone report revenues totalling $4.6 billion to date.) While a majority of the job posters identify themselves as start-ups, some sites like Odesk.com have recently introduced Enterprise Solutions to encourage adoption amongst large companies.
As companies continue to employ on the short-term basis, employee engagement strategies will evolve from long-term engagement to staged engagement.
Special thanks to the GenXers and GenYers who contributed to this essay:
Anthony Poncier, Publicis Consultants Net Intelligenz (France), Brian Burgess, MSLGROUP (North America), Joyce Lee, Universum (Singapore), José Guilherme Araújo, Ideia Comunicação (Brazil), Julia Christoph, MSLGROUP (Germany), Leslie Rogers, SAS MSLGROUP (UK), Pascal Beucler, MSLGROUP (France) and Sophie Martin-Chantepie, MSLGROUP (France).
Shout out to:
The Women’s Forum for a fantastic selection of sessions under the theme Compete, Cooperate, Create (Global Meeting 2013).
This essay was originally published in People’s Insights Quarterly Magazine Volume 2, Issue 3: The Future of Employee (Re)Engagement