Q4. What are the economic benefits of employee engagement? |
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Even though most CEO’s say, “Our employees are our most important assets.” Modern accounting is virtually devoid of employee engagement measurement. The balance sheet has traditionally had no allocation line for human assets. Engagement has not so much been about numbers; but it is about performance. And this increase in productivity performance can be illustrated in profitability.
Turnover is increasingly becoming one of the primary measures. Many researchers suggest turnover costs companies between one and two times an employee’s salary in lost productivity. For an average company of 1,000 employees, with 20% turnover, this equates to over $13 million dollars annually in lost productivity.
The way you fix turnover is through employee engagement. Australia’s Financial Review (March 2006) reported that researchers agree that the secret to higher performance and profitability is through lifting employee engagement. This is backed up by 2006 Hewitt research which suggests organisations gain an approximate $5,000 additional profit per engaged employee. HR needs to put forward the case that they can now be seen as a valuable profit centre, rather than traditionally a cost centre. Help your people know their core competencies (strengths) and work with them to continually develop and nurture them and watch engagement increase. This is an ongoing educational and collaborative cycle. Peter Drucker says, "Continuing professional education of adults is the No 1 industry in the next 30 years because knowledge becomes obsolete incredibly quickly". But according to the Committee of Economic Development, Australia's top 100 companies spend an average of just $833 a year on each managers training and development. Solutions such as meCentral.com (which we will cover later) can cost as little as $25 per employee per year. It isn't rocket science, by retaining one employee, organisations can get a return on investment of 4:1 (four times their money back). |
Q5. Why are many current employee engagement solutions not working? |
In an attempt to improve employee loyalty, many companies have offered a “mish-mash” of employee benefits like flexible work arrangements, gym memberships and employee assistance programs, most with lukewarm results. Providing an endless smorgasbord of employee benefits can be confusing, rarely meeting everybody’s needs and basically never really satisfying the employee. In many situations this then results in the creation of a “whinging entitlement” culture. Such perks can’t buy employee engagement as many are “band aid” solutions that only treat the employee symptoms, not the real problem - getting to the core issue of what employees really want.
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Q6. How can effective employee engagement affect retention? |
It is useful making the distinction here between “engagement” and “retention”. As on the surface, they can be seen as very similar yet they are very different. If you are engaged, you will probably be retained. But you can be retained and not necessarily engaged. For example, in many public service cultures you may be retained, but not engaged. The key is engagement, having people who are raving fans and passionate about the company and the work they do. So “Engagement” is about having an employee who is an “eager beaver” whereas “retention” can refer to a worker as a “complacent cow”, just doing their job but not engaged. |
Q7. Who is to blame for poor employee engagement? |
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If on average only 18-20% of employees are engaged, do we employ them disengaged or do we train them that way? So this may seem harsh, but a manager is at fault for a disengaged employee. The simple reasons for this are, either: 1. Poor recruitment processes are commonly the villain and the wrong person is hired in a faulty “on boarding” process. For example 4% of people leave after the first day and after 6 months engagement drops on average by 62% (Source: Gallop). 2. People were (or weren’t) trained or coached and became disengaged. Leaders create the environment that people work within. Most employees don’t leave jobs or organisations – they leave managers. Many leaders become too busy and didn’t invest the time to constantly coach and review their employees (both in work and life). Research shows that 10-50% of senior level appointments fail in the first 18 months. More money is typically spent on recruiting people than it is on on-going training of people. The most effective return on investment is in growing and developing your existing people so they are more engaged and therefore retained. A major reason leaders have failed in employee engagement is because they think engagement can be bought through employee benefits programs and bonuses. Leaders need to take personal responsibility and create an environment where all employees are given the resources and tools and in doing so want to perform at their best. Managers need to look in the mirror and ask “Would they be engaged if they were their leader?”
The key is a top down strategy, first get leaders to understand the approach, help them personally become more engaged and then take responsibility one-on-one with their employees. But remember, if engagement is not measured, it can't be effectively managed. |
Q8. How do you engage a workforce and create a win-win culture? |
First, find out what engages individuals. Employers need to develop an understanding of what motivates and engages employees and provide the environment and resources where people want to come to work, almost in the way a passionate volunteer proactively pursues their work with purpose. There are now many different workforce engagement measures such as Gallops and Hewitt & Associates “Best Employers” classification that have been running for many years. These are important benchmarks, but specific implementation to create a sustainable win-win culture is really the key. |
Q9. What are some of the key principles that create an engaged organisation? |
There are many different models around engagement factors, but in summary there are seven keys: 1. Leadership Most employees don’t leave jobs or organisations – they leave managers. Leaders need to keep their people informed and appreciated. Australia has one of the highest avoidance management styles in the world. People want communication and to be kept in the loop, appreciated and given feedback, especially Generation Y’ers. 2. Purpose The alignment of employees and the business values and purpose, creates meaning for individuals and is usually more powerful than money in engaging people. 3. Relationships 87% of all employees say they are most productive in their jobs when surrounded by colleagues with whom they have a good relationship/rapport. It is up to the managers to constantly create ways of strengthening bonds between people. The key is building relationships with your employees and helping them to build relationships with each other. 4. Reward Ideally, remuneration is fair and at or above industry average. Reward can mean many other non financial benefits also, and in many cases money is overrated. Interestingly, 89% of managers believe that employees leave for more money, whereas 88% of employees really leave for reasons other than money (Source: Saratoga Institute Research). 5. Opportunity If there is opportunity for employees to develop more skills and grow their careers within the organisation they will believe they are being valued and recognised and receiving something back from the organisation. Most, if not all employees need to feel that they’re continually learning, developing their skills, and building their expertise. 6. Job Fulfillment Employees need to use skills they enjoy using which challenges them in a positive way and has meaning for them. Help your employees discover what their natural talents are and find a way that they use these more in their work. The more employees enjoy their work, the better they will be at it, and the better they are at their work, the better they will contribute to the bottom line. When was the last time you checked in with your team on how much they are enjoying their work? 7. Work Life Balance By employees accepting responsibility for their own work life balance, understanding what work life balance means for them, and being supported in getting it by the organisation, they are better equipped to balance their competing life priorities within and outside work. Work life balance is a personal choice. What you do about it as an employer is also a choice. The bottom line is, choose to help people get balance, or the competition will.
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Q10. Have we been making Employee Engagement all too hard? |
Yes, many organisations have been creating a rod for their own back by providing more and more “band aid” benefits for their people and therefore creating an entitlement culture. The problem is that most people know what they don’t want, but fewer know what they really do want in their work and life. The key is, helping individuals get clarity, take more control and responsibility and be more empowered. |
Q11. How do we create an engaged workforce simply and easily? |
Central to any successful engagement strategy is helping individuals first get clarity about what they want, what motivates them and what is important to them, both inside and outside work. An essential psychological understanding in our increasingly “do more with less” corporate environment is that unfortunately most people know what they don’t want, but fewer really know what they do want. If we want people to be engaged, productive and perform at peak performance then surely leadership is first responsible for giving them the tools, environment and solutions to perform at their peak ability, both inside and outside of work. So therefore the first vital step in any intelligent engagement solution must be self-leadership – giving individuals the tools & system to help them get clarity on: From our experience, working with many multi-national companies, this innovative self-leadership approach to employee engagement also reduces the “you aren’t doing enough for me whinge culture”. Put simply; forward thinking employee engagement solutions are now providing programs (both face-to-face and online, as it provides consistent scalability) to give employees more personal responsibility and control of their career, life and finances. |
Q12. Why are aspects such cashflow management an important part of the employee engagement philosophy? Shouldn’t issues such as work life balance, career development and life goals be up to the individual? |
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Stressed employees are not productive employees. Responsible, forward thinking organisations want their people to not only be in control of their life and work, but also their finances. Companies that have people with low financial anxiety benefit from greater performance and morale. But unfortunately most employees spend as much as 25 hours a month worrying about their finances. For a company of 1000 employees, that can mean close to 300,000 unproductive working hours or 7,500 lost working weeks per year. So there can be huge benefits in providing your people with some form of financial control programs such as those included in meCentral.com. Almost 97% of employees say they experience financial stress, yet only around 3% take responsibility (self-leadership) to create something as simple as a cashflow for their own life. So “How do you give your employees a 10% pay rise without giving them anymore money”? Answer: Help them take more control of their cashflow with tools and training. Research shows that more awareness of your cashflow can increase your financial situation by around 10% per year.
The philosophy for helping employees take more control of their cashflow and other financial issues is exactly the same approach when applied to other key areas such as career development, work life balance and life goals. |
Q13. Are financial rewards over-rated as a engagement strategy? |
Yes. Financial packages can attract employees to a role, but not sustain their engagement. Interestingly, 89% of managers believe that employees leave for more money, whereas 88% of employees really leave for reasons other than money (Source: Saratoga Institute Research). Find someone only chasing a bigger salary and you will probably have found someone who doesn’t really know what they want. In fact they many be lacking real purpose and therefore money becomes their default purpose in the hope that financial rewards will be their savior to everything. |
Q14. How do we provide a consistent, scalable, flexible approach? |
meCentral.com is ideally suited for HR leaders who are dissatisfied with, or want to supercharge their current Employee Benefits Program and want to enhance their unique employee offering. This platform enhances the compelling employment offer and assists with talent engagement, career development, cashflow management, self-leadership and work life balance. meCentral.com is a world first solution that helps fast-track individual’s success in one simple integrated system. 2007 Best Employers such as SAP and Vedior (Select) and other organisations such as 3 Mobile, NAB and Ernst & Young have employed consistent scalable platforms such as meCentral.com to empower their workforce and create a much more sustainable win-win culture. meCentral.com brings together fun, meaningful and easy to use tools in one convenient organisationally branded platform to help employees make better informed choices around:
meCentral.com has uniquely been designed specifically to help time-poor employees grow. It’s your company’s success platform for retaining and engaging your top talent and creating a sustainable high performance win-win culture. It is the result of years of research and development in understanding the personal motivational drivers of employees and the interaction between their individual life goals, personal finances, career path and employee retention. For more info meCentral.com |
Q15. What are the benefits of meCentral.com? |
In a nutshell, meCentral.com: 1. Puts employees back in control by promoting self-responsibility. 2. Is a unique pragmatic approach, based on logical, researched results. 3. Provides scale due to the global accessibility 24/7. 4. Is the most cost effective solution we have ever seen.
meCentral.com benefits in more detail:
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Q16. How does this approach engage people and add to the bottom line? |
Put simply, give individuals more skills, resources and tools to allow them to take more control of their work, life and finances which in turn gives them the opportunity to take more personal responsibility, via self leadership. It is all about giving individuals more control and empowerment, which many managers can find intimidating, but leaders find creates a much greater engaged culture. meCentral.com helps employees with their career development, goal identification and achievement, personal cashflow and work life balance. 71% of employers providing tools and resources such as career management programs say it has improved their ability to attract and retain employees. As has already been highlighted, companies with an engagement score of 60% or higher have an average 5 year shareholder return of more than 20%, while companies with engagement scores of less than 40% usually have a negative return of 10% to shareholders. Simply, employee engagement = productivity & performance = profitability = business success |
Q17. Doesn’t giving employees more personal awareness and control mean they may leave the organisation? |
In some cases yes, and in most cases this is a good thing. Those that leave the organisation were those that were going to leave anyway. As such, this process can be likened to shaking the tree of its dead wood as, in most cases these people are the already disengaged “complacent cows” and “corporate cancer” that can be extremely unmotivating to the engaged “eager beavers”. One recent legal client we ran a program for was going to retrench 15% of their workforce. Two weeks after one of our face-to-face programs four people resigned. These four were all going to be retrenched anyway, thus saving the company over $200,000 in pay outs. The program however gave the leaving employees more autonomy in the decisions they were making. This also applied to the remaining employees, giving them more control over areas that they could take more responsibility in for improving their own work, life, finances and balance. Everyone was a winner |
Q18. What must companies do to ensure an effective employment engagement strategy? What is the best implementation and how much does it cost? |
There are various phases of intervention that can be effective for this project, depending on the degree of help and participation you desire. Ideally implement a “top down” integrated program of self-leadership and personal responsibility. This will usually involve face-to-face programs and blended learning such as www.meCentral.com
1. Measurement 2. Introductory Sessions 3. Leadership Programs 4. Roadshows 5. On-Going Sustainability 6. Statistical Reviews and internal communications programs – we can provide quarterly reviews and develop internal communication programs to enhance the learning and cultural change required. |
Q19. Can we get meCentral.com just by itself or do we also need face to face training? |
An initial face to face program is recommended for a meCentral.com implementation to ensure understanding of the process and take up in the organisation is as successful as possible. These are typically custom designed interactive workshops that launch and embed the meCentral.com self responsibility approach. These programs also educate and motivate individuals on how to benefit from meCentral.com. The implementation programs facilitate training in goals, cashflow, work life balance and career development. There is a range of options regarding the implementation of meCentral.com which will cater to what best suits your culture and objectives. |
Q20. How have organisations bottom line benefited from these initiatives? |
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Obviously, quantifiable success measures vary from organisation to organisation. They can include measures such as turnover, engagement scores and EOS, just to name a few. Here are a few examples: “Staff turnover has reduced from 38% to 20%” One of our clients, whose measurable objective was to reduce their turnover, had us run 7 face-to-face programs for them in conjunction with launching meCentral.com. “Directly converted HR into a $3 million dollars profit centre within 12 months” These sorts of turnover reductions directly added over $3 million dollars to the organisations end of year profit line, thus clearly showing how human resources can be a profit centre (not just a cost centre).
Financial estimates place this sort of turn around in the arena of making the organisation an extra $10 million. From following this type of meCentral.com self-leadership approach organisations have gained huge bottom line benefits such as saving over $200,000 in retrenchment packages and countless dollars in unneeded recruitment and retraining costs. In this example, this represented a 28 times return on investment for the organisation, while retaining much happier employees at the same time. “2800% return on investment” Another simple way to look at organisational improvements is to say, retain one person per year and meCentral.com will more than pay for itself.
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Q21. Life by Design have worked with many of Australia’s top 10 companies. What other cases studies can you give us as examples of this integrated approach? |
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Case Study: Westpac In an across the board Westpac employee opinion survey, outcomes showed that increasingly employees found work life balance to be an issue which Westpac wanted to address. Initially Life by Design© worked with one division of Westpac, Institutional Banking in which they rolled out an online solution for 1200 employees followed by a 1 Day training program on Work Life Balance. Westpac’s Institutional Banking division’s work life balance EOS scores were increased (improved engagement) while the rest of the company, who didn’t experience our initiatives, showed no improvement in their scores. As a result, Life by Design© became a preferred supplier for Work Life Balance programs on an ongoing basis. meCentral.com was created to provide ongoing individual access to almost all these sorts of resources to help create sustainable win-win cultures.
At the Ernst & Young's Annual Conference, Life by Design® presented a session for all 470 partners and their spouses, giving everyone who attended real 'take home' value. As a result of the session being such a success, Ernst & Young licensed our Employee Engagement platform meCentral.com for all 4000 of their employees. Linked from the Ernst & Young intranet and branded with their corporate identity, this system is designed to help employees set goals, fast track their success in career planning, work life balance and cash flow management. Ernst & Young’s license agreement has also made meCentral.com accessible for their employee’s spouses at home.
Specialists in the medical industry with 270 employees throughout Australia and NZ, Stryker had an engagement issue which was costing them a lot of money. Through a more humanistic approach they utilised Life by Design’s services and rolled out our recommended ideal implementation in the following logical steps: 1. They had us launch our self-leadership approach at their national conference 2. A leadership program for their top 10 executives and CEO 3. Roadshows throughout Australia and New Zealand 4. meCentral.com licensed for not only their employees, but also their spouses Stryker’s turnover has reduced from 38% to 20% which some financial estimates suggest directly converted HR into a $3 million dollar profit centre within 12 months.
With offices throughout Australia and New Zealand, Best Employer Award winner Select Australasia asked Life by Design® to deliver a work life balance program to one part of their company at their annual conference. As well as the session, employees were given access to our '52 Strategies to Work Life Balance' online E-Learning resource. As a result of the success of these employee engagement solutions, Select Australasia licensed our web-based Employee Engagement platform meCentral.com for all their employees, helping their people fast track their success in work, life balance, career, cash flow management and goal setting.
Specialists in human resources, SHL determined self-leadership was an important issue for their employees. This resulted in Life by Design® running a program for their team whom were mostly organisational psychologists. The program helped them with their own work life balance and self leadership introducing them to tools to set, manage and achieve their personal and business goals. Within 7 days of the program 50% of the organisation were using the goal setting and balance systems within meCentral.com.
Software giant SAP employs 470 people throughout Australia and NZ. Work life balance was an issue for their busy time poor people. They liked our self-leadership approach to work life balance and had us:- 1. Present at their national conference 2. Conduct a leadership program for their top executives and CEO 3. Conduct a piece of consulting work with their work life balance committee around employee engagement 4. Facilitate a series of programs throughout Australia and New Zealand 5. Set up a meCentral.com license for not only all their people, but also their peoples spouses |
Q22. Can you give some examples of individual employee feedback from these sort of implementations? |
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More comments… "The end result was even more rewarding and valuable than I could have imagined. I had high expectations and even these were exceeded." And again, more comments from recent users of meCentral.com:- “meCentral.com – the most comprehensive follow up options I have encountered” |
Q23. Could you elaborate on the three main pillars of self leadership? |
Firstly, in the last 10 years, working with many top Australian companies we have clearly seen that the first vital step in any intelligent engagement solution must be self-leadership. This innovative self-leadership approach to employee engagement reduces the “you aren’t doing enough for me whinge culture”. But what is Self-Leadership? Psychologically, most people know what they don’t want, fewer know what they really do want. If people don’t know what truly engages them in work and life, how can they ever sustainably be engaged? So self-leadership is the philosophy of helping put individuals back in control by empowering them with the tools, permission culture, and personal responsibility to help them get clarity on the key pillars of: 1. Their own career development 2. Life goals & work life balance 3. Personal financial management
We also have a number of useful articles and useful resources that go further into self-leadership and self-responsibility. |
Q24. How about on-going support? |
Life by Design will help the organisation with an appointed Account Manager to ensure they receive ongoing support and assistance. We provide quarterly reviews, statistical reports and turn key implementations to make clients lives as easy as possible. Including pre-written internal communication programs to help keep employees fully informed and updated.
The internal communication campaigns give employees ongoing reasons to participate and keep on participating to ensure people get ongoing value each month. An example of one of our client users, Best Employer Select Australasia has a 5-8% take up each time an internal communications initiative is employed. Additionally, meCentral.com has a 24/7 email support function.
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Q25. How much time does someone need to invest in meCentral.com to get the benefits? |
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The system is designed like the London Underground, you can get on and off the train whenever you want and the train will remember where you left off (bookmarked). You can stay on as long (4 hours) or as little as you wish (10 mins) depending on what you want. For those that want to use it “quick and fast”, will choose the ‘express’ lane. As the saying goes, the more you put into things the more you’ll get out of them. Some people will choose to interact with the reminders by opening the email, some won’t. It’s not really necessary to open the email as reading the subject line is enough to bring that goal to top of mind for you. Once you have read the email subject line you can then delete the email immediately. The only time you would need to interact with the email is, when you are ready to remove the reminder because you have achieved the goal.
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Q26. Do people really use online platforms such as meCentral.com? |
We capture results and statistics and sit down with our clients quarterly to review them all. Most on demand learning systems get 3-6% take up, but meCentral.com conservatively triples those figures with 18% take up rates within just the first 3 months. The reason, meCentral.com is very different is because it’s “All about you”. It isn’t a boring compulsory compliance or safety learning program. It is about the most interesting topic in the world – YOU! Trying to second guess everyone’s experience is unrealistic. Just know that each person will have their own individual experience. Some will prefer the meCentral.com “express lane”, others will spend hours on it and totally think its fun. Others will get in and get what they want and leave some parts until later. There is no right or wrong way of using meCentral.com – it has been designed to be fully flexible to different users and learning styles. There is about 17% of any population that will not use it at all and that’s OK. They won’t do anything that is offered, are sceptical and are categorised in text books as the sceptics of the bell curve. Here are the other groups. The first group of people are the innovators – they love meCentral.com because it’s new, they will be the first ones on the system the minute it is offered. These people love anything that can help them, are into personal and professional development and appreciate new things in general. The 2nd group of people are the early adopters – they will enjoy meCentral.com, they will be the first ones on the system immediately after training. They were the first ones to register to come to the ‘initial’ program; they are ones that really enjoy getting opportunities to improve things around them. They will be the champions internally that will talk to others, encourage others and do the general word of mouth about the new system. The 3rd group of people are the early majority – they will enjoy meCentral.com, they will be encouraged once they feel it is embedded in the organisation. They will respond to the internal communications campaign and look for management support and want to be assured that this is not something that will come and go. They want assurances that its part of the culture and that its here to stay and that management is serious about helping them. The 4th group are the late majority – they will eventually come onboard once nearly everyone else has confirmed that it’s good and they won’t be embarrassed or harmed in anyway. They need to feel very secure about taking action and that it is part of the main stream and normal way of working. The final group are the sceptics, mentioned earlier. These people only do what is mandatory for their job. They don’t believe life can be any better and are not interested in anything but what they are interested in. There is not a lot we can do about this group. We accept that there are about 17% of people that we can’t help and that’s OK. If they do eventually come on board it would be for a specific need for example: the cash flow tool only. They will get on, get what they want and that’s it and that’s OK. Psychologically we have found that almost everyone wants more control of their life these days. meCentral.com has been developed because people are generally not great planners. meCentral.com is attractive to people because it’s a simple and easy to use systematic approach. People can use it as much or as little as they like.
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Q27. How easy is meCentral.com to use? |
We have invested a lot in making meCentral.com easy and intuitive to use. Life by Design used the usability consultants that were involved in designing Westpac’s excellent online banking interface. |
Q28. How can I get more information or organise an initial exploratory discussion? |
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Life by Design®, are creators of meCentral.com, and are Australia’s leading employee engagement and work life strategy experts. Since 1997 Life by Design® have consistently worked with many of Australia's top 10 companies as well as organisations throughout North America, Europe, Asia and New Zealand, helping them with innovative engagement and retention solutions.
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