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SPECIAL REPORT: Employee engagement

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It’s has always been a goal to understand why some companies are able to attract the most valuable talent and then manage to hold on to their gems. Today mastering this understanding has become more prized than ever

  • Engaging the employee
  • Recruiting liquid talent using a sieve
  • CFO to CEO

Engaging the employee

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Not many people need convincing that ensuring employee wellbeing in the workplace is not always as straightforward as it seems, says Sam Bradley

A recent study on unhealthy versus healthy workers highlighted the differences: unhealthy workers take an extra 16 annual sick leave days, work 96 fewer effective hours per month, and rate their work performance 48% lower than their peers. It seems companies are starting to realise the benefits of a healthy workplace. Research showed that companies that monitor and report on employee health outperform those that don’t by 10%, while 81% of large companies are now discussing wellbeing at board level.

‘Workplace’ is an ever-evolving term that has changed dramatically over the last decade, mainly as a result of technological advancements and urbanisation. More people than ever before work in an office and behind a computer, while increased Internet connectivity and the rise of mobile phones have resulted in general information overload and pressure for employees to be constantly available. This has resulted in a change in the problems we face: obesity, bad eating plans, lack of exercise, stress, fatigue and depression are now seen to be the main threats to employee wellbeing.

These days, many of the large companies have a programme in place to counter these problems directly (for example healthy eating plans, employee exercise plans, psychologists and life coaches). However, are companies guilty of solving the effects of the problem, and not actually addressing the root cause of the problem? The joke goes about a CEO who was asked how many people worked for his company. ‘About half of them,’ he responded. He probably wasn’t far wrong: it is said that 40% of employees worldwide are disengaged from their jobs while only 14% are highly engaged.

The answer to why so many employees don’t enjoy their work may lie in our fundamental psychology as humans. Maslow’s hierarchy of needs lays out five basic needs motivating humans, of which the bottom three rungs on the ladder are physiological needs (food, shelter, etc), safety needs (protection, security, etc) and social needs (love, friendship, etc). Only once these are met, will we seek to meet our esteem needs (independence, respect, etc) and our self-actualisation needs (fulfilment, growth).

It is suggested that most jobs today do not meet these needs, which results in low employee engagement, which in turn results in the other work-related problems mentioned earlier. So how should the workplaces of today meet these needs? How should companies help their employees find independence, respect, fulfilment and growth? I would suggest that if employees can find roles that suit their skills, passions and interests, then they are 99% of the way towards meeting those needs. Employees must find the roles that excite and motivate them, and a company should do everything possible to help employees on this road of self-discovery.

There are many ways to do this: from psychometric and personality assessments (which help people find their strengths) to secondments to different departments of a company (to allow employees to diversify their interests and skills). Companies could allow employees greater flexibility so that they can structure their time as they wish (the Whitehall II Study has shown a direct link between control over work and health).1 Companies could also give workers time to pursue personal hobbies, or allow employees to take unpaid leave for larger projects. Government could also be involved by encouraging companies to invest in developing their workforce through incentives and tax. Another way government can promote a good work–life balance is to force workers to work less: for example, workers in France enjoy 25 days of paid leave a year and a 35-hour work week is the norm. Benefits include fewer social problems, and the measure may have helped ameliorate lower unemployment rates.

Malcolm Gladwell, in his book Outliers: the story of success, finds that work is satisfying if, and only if, it meets three crucial criteria: autonomy, complexity, and a connection between effort and reward. By providing responsibility, mental stimulation and appreciation for work well done, employees will find their work fulfilling and stimulating. The benefits of a happy, passionate and actively engaged workforce are obvious to both the employee and the company. As an employee, if you can find the job you love, you’ll never have to work another day in your life (as the old expression goes). You will be in the enviable situation Noel Coward spoke of when he stated that ‘work is more fun than fun’. As a company, the results of a motivated workforce enjoying their jobs will be a more sustainable company and a more profitable bottom line.

This is all very well in principle, but how is the problem of low employee engagement being tackled in the real world? A look at the strategies being used by a few of the most successful companies reveals how these challenges are being met and provides a glimpse of what the future workplace could look like.

CREATE A LOYAL WORKFORCE

SAS, a large software company in the United States, has created a loyal workforce by showing its employees that it values them. Company benefits include a large gymnasium on site and free health care, to name just a few attractions. Naysayers may argue that this is money wasted, but considering that SAS’s employee turnover is roughly 20% lower than the industry norm,  the amount saved just on recruiting and training fees (not to mention lost productivity) justifies these expenses. The rewards for this investment are plentiful: SAS boasts 37 consecutive years of record earnings and being voted one of the best companies to work for means that it is a talent magnet for the best and brightest employees (each vacancy gets well over one hundred applications).

SAS also proved its loyalty during the tough times: when the recession hit in 2008 and most of its competitors were laying off staff, SAS instead promised all 13 000 of its employees that they would keep their jobs. According to CEO Jim Goodnight, the resulting calm and secure atmosphere resulted in record profits in 2009.

Google is another company revolutionising the modern workplace, and it has created a transparent, trusting and loyal company culture through its democratic style of leadership. For example, leaders share important and confidential information with staff, employees play a real part in decision-making, and weekly Q&A sessions are held for the whole company where questions are answered by leadership.

CREATE AN INSPIRED WORKFORCE

Getting employees to care genuinely about the work that they do isn’t always easy. Google creates this inspiration by allowing employees to spend up to 20% of their working hours on projects that are close to their hearts. Employees are also inspired by being able to work how and when it suits them: the uncommon amount of flexibility given to employees is based on a 30-year study by Sir Michael Marmot showing a direct link between employees’ freedom and their health and work performance.2 Of course, giving employees freedom means that there is a risk of employees abusing it, but Google counters this in two ways: employees are held accountable for the work that they produce, and great effort goes into only hiring ambitious and hardworking employees in the first place.

SAS has created an environment where employees can be inspired by making sure they know they are cared for and supported. Management are chosen based on their ability to help other people and facilitate their careers, rather than their own. SAS also creates inspiration by giving employees ownership of their work: everyone is responsible for the work that they produce, from the software programmers to the gardeners (who are each given a separate area of the grounds that they are responsible for).

For the average company, the task of engaging employees may sound complicated, expensive and time-consuming; however, according to Gallup CEO Jim Clifton, employee engagement can be a relatively straightforward issue. Humans naturally want to make a meaningful contribution, develop their skills, and feel valued. If these needs are met, then employee engagement will naturally follow.

So, to answer the question of how can we transform workplaces to drive wellbeing, my suggestion would be by enabling employees to find their passions and pursue them wholeheartedly. As Howard Thurman once said, ‘Don’t ask what the world needs. Ask yourself what makes you come alive, and go do it, because what the world needs is people who have come alive.’

NOTES

1 University College London, Work, stress and health: the Whitehall II Study, 2004.

2 Sir Michael Marmot, Chair of the Commission on Social Determinants of Health, World Health Organization.
Recruiting liquid talent using a sieve

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Top talent is liquid, mobile and expensive. Organisations that fail to address these current human capital trends will be on the losing end when it comes to attracting the people they need to compete against those who do. By Paul Plummer

While baking a lemon meringue pie recently, I discovered that sieves are particularly shoddy implements when attempting to retain liquids. For a successful fluffy meringue, you have to separate the egg white without tainting it with the yolk. In my amateurish attempts, I found that you can create an extraordinarily large task out of potentially a simple one if you use the wrong implement – such as a sieve instead of an egg separator.

The elusive liquid

My baking got me to thinking about my role in assisting business attract top talent and how using the right implements are essential, specifically when recruiting. It has never been more evident than in the highly competitive talent environment, particularly where top talent seems to be as tricky and elusive to recruit as separating the egg white and yolk. The Deloitte South African Human capital trends report 2015 cites workforce capability as ranking in the top five challenges. ‘Organisations around the world are experiencing disruptive change in the demand for critical skills. Not only are specialised skills increasingly scarce, but they are also unevenly distributed across the global economy.’1

This disparity between the capability of the available workforce and the demand for vital talent required to drive business imperatives, results in a highly competitive recruitment environment, with each company vying for their share of the seemingly slippery talent ingredient to create the best fluff for their business pie. What adds to the elusive nature of this talent is that these bright individuals are fully aware of which side of the supply and demand talent scale they are positioned, resulting in a new ‘on-demand’ micro-economy for their talent.

According to the Economist, these sorts of micro-economies will be posing difficult questions for companies in years to come. They say that today, a growing group of entrepreneurs are striving to do the same – as Henry Ford did for the motor industry – to services, bringing together computer power with freelance workers. This on-demand economy goes much wider than the occasional luxury. Click on Medicast’s app, and a doctor will be knocking on your door within two hours. Want a lawyer or a consultant? Axiom will supply the former, and Eden McCallum the latter. Other companies offer prizes to freelancers to solve R&D problems or come up with advertising ideas.2

Companies now not only have to compete for talent with competitors, they have to create compelling cases for talented individuals to join them rather than have the talent engaging their clients directly via these new peer to peer channels. ‘What if your challenger isn’t a traditional organization at all, but instead a “talent platform” that doesn’t actually have employees? They’ve come on to the scene by stealth, often as seemingly innocuous job boards for temporary workers, but they’re turning into much more than that. They can now pose a real threat to established organizations.’3

The sieve

This brings me back to the sieve, a clearly inadequate tool for the job of separating the magical white fluff-creating ingredient, especially when viewed in comparison to several bespoke egg separator implements. Much like my lack of chef-de-partie skills, some organisations are wallowing in their lack of awareness of talent attraction mechanisms to successfully recruit this new age of top talent.

Is posting an advert in a newspaper or updating the company’s static webpage with open vacancies not as mindlessly archaic as attempting to sieve the yolk from the white?

Cited as another of the top challenges as per the Deloitte report is the need to reinvent the HR function. Today’s HR must be agile, business-integrated, data-driven, and skilled in attracting, retaining, and developing talent. To put it bluntly, HR often cannot keep up with the pace of change in business but needs to raise its game by aligning its skills and capabilities with the organisation’s overall business goals.4

What needs to be embraced are bespoke recruitment tools that are intentional in their design to attract the interest of skill leaders in the areas that currently drive the business. This needs to be a dynamic tool, its elasticity dictated by the specific needs of the niche of talent targeted.

The liquidity of the talent should be embraced, instead of companies fearing that the talent force will slip through the organisation and the retention of skills will be a problem, anticipate the individual’s aspirations and create an environment that is conducive to this. Many multinationals are embracing this and providing a platform for these types of mass-customised employee relationships. Drew Crawley, British Airways’ chief commercial officer, appreciates the value of an agile, on-and-off balance sheet workforce. They often bring in external groups with a niche specialism or area of expertise onto projects and find value in crowd-sourcing to drive innovation. As well as bringing fresh and alternative points of view, Drew explains that this engagement with external groups also gives them another opportunity: ‘As part of our commitment to developing our people, we make sure that each of these external individuals are man-marked by one of our own employees to transfer knowledge and grow our internal talent pool.’ Drew adds, ‘The creative juices out there in mainstream are phenomenal, and organisations need to harness them.’5

Another example of how these alternative types of value-based relationships can work is demonstrated by Proctor & Gamble, who launched Connect + Develop, a systemic, company-wide open innovation programme which allows for external partnerships with individuals for innovation. Currently, more than 50% of P&G innovation is sourced externally, and P&G-shared innovation drives around $3 billion in annual sales at partner companies.6

A local example of an exceptionally successful innovation programme in the talent attraction space is the ‘Win a job’ initiative run by Deloitte for a multinational organisation to attract future leaders of the organisation. The ‘Win a job’ programme entails a current business challenge being posed to a number of highly talented and qualified individuals. The entrants, from diverse disciplines, agnostic of specific qualifications and their related work experience, submit a presentation on their take on solving the challenge. The top submissions present to a panel of executives of the division and the winners of the presentation literally win the job – the practical execution of their plan around the business challenge they had just presented on.

Clients can attract talented individuals by allowing them to be part of the creation of their actual job description, merely agreeing on the desired outcome, and empowering the individual to chart their own way there, an exceptionally mutually beneficial arrangement.

For success with proactively sourcing top talent as a winning recipe for your organisation, remember:

No two organisations’ talent pies will be congruent, and individual mass customisation will be necessary to achieve your talent success.

Talent is liquid, mobile and expensive – make sure you understand the most optimal manner to attract and engage this dynamic capital.

The more bespoke your tool is to the outcome, the easier it will be to reach your goal.

Pies are best served hot. If you arrive late at the party, you may have to settle for the crumbs.

Happy baking!

NOTES

1 Deloitte, Global human capital trends 2015: Leading in the new world of work.

2 The on-demand economy: workers on tap, The Economist, 3 January 2015.

3 David Creelman, John Boudreau and Ravin Jesuthasan, Tongal, eLance, and Topcoder will change how you compete, Harvard Business Review, 7 November 2014.

4  Deloitte, Global human capital trends 2015.

5  Deloitte, British Airways: using agile talent to drive innovation.

6 P&G, Partnering with the world to create greater value.

 

CFO to CEO

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Becoming a CEO is the greatest leap that anyone can make in his or her career. A year ago, former CFO at Eskom Paul O’Flaherty CA(SA) was appointed CEO of ArcelorMittal SA, the South African unit of the world’s largest steel maker. Lynn Grala asked him how he accomplished it …

Was it always a goal of yours to eventually be appointed as CEO?

Not at all. When I started studying to be a CA(SA) I wanted to be an audit partner like my Dad was. I did achieve this goal and then realised that I wanted to be in industry making advice and ideas happen.

Can you tell us more about the process of how you managed to climb the ladder to CFO and then to CEO?

It’s all about hard work, discipline and perseverance. Set yourself goals, break them down into small milestones and go for it. Don’t let anything stand in your way. It’s not a sprint but a marathon so don’t expect instant results and don’t expect to move from clerk to manager overnight as many seem to do. You need to experience success and failure and allow yourself to learn from this.

I was fortunate in that my experience as an auditor was in tough, cyclical industries (mining, manufacturing and construction) and I progressed from audit partner, to CFO of a listed construction company, to CFO of South Africa’s largest state-owned company. With this experience I felt ready to be a CEO in a challenging industry. I have always been hands on and operational and gained incredible experience through progressing through the ranks from audit clerk to audit partner and being involved in the audits of many different companies, learning what makes them tick.

I started to see that many companies knew what needed to be done but did not seem to execute well. I regarded this as a skill I have and have tried my best to execute strategies in all the companies I have worked for.

CFOs are increasingly considered attractive options for the role of CEO, can you mention some of the benefits for a company in promoting a CFO directly to CEO?

CAs(SA) in general are hard-working, diligent and provided they have applied themselves during articles, well versed in business challenges. I had an opportunity during my time in auditing to work as an audit manager in the United States and there I learnt that CAs(SA) rank with the best.

It is not a rite of passage to move from being a CFO to CEO, particularly in the very engineering dominated industries that I have worked in; it is about being able to manage complexity, understand the numbers and being able to lead effectively. Being a CA(SA) has provided me with a great foundation in this regard.

Being an audit clerk and audit manager in the late 1980s and early 1990s was excellent training as you were given responsibility at a young age (unlike what I experienced in the US) and you had to engage with the top leadership of the companies you were auditing and make sure you knew what you were talking about!

What exposure and experience do you believe will better equip CFOs to be successful CEOs?

Ensure you have a great finance team behind you, empower them and then get operationally involved and help make the non-financial decisions. You need to understand safety, environmental, industrial relations and operational issues in detail.

CFOs tend to be risk-adverse whereas CEOs are required to be risk-takers. Does this pose a problem in the role change and how can it be successfully combatted?

At the end of the day, in my opinion, it is a strength for a CEO to be very astute with financial numbers, because ‘cash is king’. Obviously you need to balance risk and opportunity and, as I stated earlier, experiencing your own poor decisions as well as good ones over time enables you to improve and be better for it.

Can you share with us some of the lessons you have learned since stepping into the role as CEO?

It has been a progression since I first became a CFO so there are no ‘sudden’ differences, merely a transition over time.

Do you believe all CFOs can be promoted to CEOs, or do you believe there are specific personality traits that CFOs require in order to successfully step up as CEO?

I don’t believe all CFOs can become CEOs, particularly as some want to remain in finance and be the best they can be as a CFO – there is nothing wrong with this as being a CFO is a great achievement. It really depends on the individual and their traits.

Is there any other advice you can give CFOs who aspire to become CEOs?

Never give up, be patient and focus on your goal.

Author:

Lynn Grala is Editorial Administrator of Accountancy SA

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