Digital Employee Engagement Whitepaper 2018

Transcription

1 Digital Employee Engagement Whitepaper 2018

2 Digital Employee Engagement: How to Raise Retention Rates in the 21 st Century The following whitepaper discusses the high costs of employee turnover in businesses where employees don t typically have access to traditional digital communications platforms. In this whitepaper, you will learn about: The true costs of high turnover rates The top motivators and factors in employee retention How to foster engagement with employees who are traditionally disconnected Introduction: The true cost of high employee turnover In an increasingly competitive economy, both nationally and globally, one of the largest overheard costs for businesses of all types and sizes is voluntary employee turnover. If left unchecked, these costs can greatly hinder growth and have devastating long-term effects on not only individual businesses, but also specific sectors such as retailing and manufacturing, which already face tremendous pressures due to competition from online retailing and outsourced manufacturing. While these global trends that affect the U.K. labour market have been growing Definition of Labour Turnover Labour turnover is the ratio of people leaving a firm or organization relative to the total number of employees. Reasons for leaving can include retirement, better opportunities, and redundancies.

3 over the last 25 years, the U.K. and other industrialized nations have seen a significant uptick in turnover rates in recent years. Source: Trends and Drivers of Workforce Turnover, Mercer 1 And these changes aren t insignificant in cost. According to Oxford Economics, the average cost to replace an employee is 30,614, costing British businesses more than 4.13 billion each year. 2 That means it costs more to lose a single employee than it costs to pay the 27,000 average annual salary of full-time workers in the U.K. 3 These figures include not only the costs related to replacing an employee time spent searching, recruitment agency fees, advertising fees, etc. but also the productivity lost during the replacement process as well as training new employees. U.K. businesses average a 15 percent turnover rate across industries, the sectors that face the highest rates are retailing, catering, call centres, construction, and media

4 The prime challenge for these industries, and similar ones where higher labour turnover rates are common, is keeping replacement costs low while also ensuring that the processes for onboarding and training new employees is effective. The faster a business can onboard and train, the faster that employee becomes productive. Indeed, the largest portion of costs related to replacing departed employees lie in the amount of time it takes for a new employee to reach maximum productivity. Referring again to Oxford Economics, it takes approximately 28 weeks for new employees to become productive. For this reason alone, it is now essential for businesses to take every step they can to ensure employees stay longer as well as to find ways to reduce onboarding and training times without losing productivity. Why good employees leave (hint: it s not only about money!)

5 In our highly competitive economy, it is essential for top HR personnel to understand the underlying causes why workers leave jobs, particularly in positions that have a higher than average turnover rate. While some of the reasons behind turnover are beyond a firm s control workers moving away, major life changes or health challenges, etc. the majority of workers leave because of factors that are within the company s control. Glassdoor, an online jobs and recruiting marketplace, conducted a survey that found that while being underpaid was the most common reason employees left, it was far from the only cause. Indeed, nearly 45 percent of all survey respondents said that they left their last job because they needed a new challenge or the work itself was boring. Nearly 20 percent said they didn t approve of their supervisor, and 14 percent said they didn t like the company culture. 5 And even the top reason (too low a salary) may not even be the chief motivator to leave; a study discussed in the Harvard Business Review found little correlation between salary and job satisfaction. 6 In other words, simply throwing money at employees is not likely to keep retention rates down. Instead, employee engagement is likely the key to improving not only retention metrics but also productivity. What does employee engagement mean? There are many definitions, but as many experts point out, it s not a measure of happiness or satisfaction. Rather, engagement has more to do with employees emotional relationship to their employer and their job, and how that state incites them to work towards a company s goals. 7 An engaged employee has a higher level of commitment to their job and their employer, is passionate about their work, understands the company s goals and their role in meeting them, and pro-actively works towards fulfilling those goals. 8 Moreover, engaged employees have productivity rates that are 70 percent higher than those of non-engaged workers. They also enjoy a 78 percent higher safety record, 70 percent lower employee turnover, 86 percent greater customer satisfaction, and 44 percent greater profitability. In the U.K., engagement rates appear to be stagnant. According to research firm ORC International s 7 th annual Global Perspectives survey, employee engagement in the U.K

6 hovered at 58 percent between 2015 and And while that may seem to represent a majority of workers, the survey also found that approximately 20 percent of employees would not recommend their employer as a place to work, while the percentage of workers feel they are forced to work beyond what is normally required. 9 Similarly, research by Kronos and the Workforce Institute found that 60 percent of employees cited not feeling valued the key factor when considering resignation. 10 That is to say that while engagement appears to be at a decent level, there are enough unengaged employees in the U.K. who s level of disconnectedness and lack of engagement can greatly undermine an organisation s productivity. In the past 25 years or so, the main channel that employers have used to communicate, train, and engage employees is through the desktop computer. That is, significant resources have been put towards developing and deploying online training resources, communications resources, and other digital products that workers who primarily use computers in their day-today work can easily access. This is not the case, however, for workers who do not use computers, such as workers in manufacturing, retail, transport and other similar industries. And evidence suggests that employee engagement issues are deepest, coincidentally, in these types of industries. One study by market research firm Forrester found that while most employers cite employee engagement as a priority, only 32 percent of employees actually feel engaged. While the report focused more on employment in digitally-focused businesses, it did recommend organisations review how they manage recognition, development, flexible work schedules, employee well-being, self-service mobile access to benefits and other programs that rate high with workers. 11 In manufacturing, which typically faces high turnover rates, research firm Gallup found that only 25 percent of all employees are considered engaged. 12 Add in employee concerns around Brexit and employment levels, which only seem to be exacerbating feelings of disengagement among workers, and it should be clear that increasing employee engagement should be top of mind for any business that wants to remain competitive in the long-term /510558/ 12

7 Connecting unconnected employees The key challenge for employers in industries where workers don t typically use computers is to find ways to connect employees to their organisation. Yet, this is an area where companies have not traditionally excelled. In its Global Human Capital Trends survey, Deloitte found that while nearly 80 percent of executives rated employee experience as very important or important, only 22 percent said that their companies were competent at offering an engaging employee experience. 13 So how can employers create a work environment where employees feel engaged, particularly in sectors where communication is a challenge? 13

8 The answer to that question likely lies in technology, specifically smartphones. There are more than 43 million smartphone users in the U.K., about two-thirds of all U.K. citizens. Among adults, smartphone penetration is well above 80 percent and is expected to continue to rise. 14 With such widespread adoption, smartphones can play a revolutionary role in engaging employees. A natural communications centre, workers who may not have access to a company or intranet are likely accustomed to sending and receiving communications through their mobile device. That could be in the form of one-to-one messaging, from manager to direct report, but can also be a place where employees receive company news, memos, and other tidbits through a newsfeed function. What s more, communication doesn t have to be one-way, as a smartphone app can allow employees to anonymously submit feedback, raise issues, etc. This is a highly efficient channel for making communication a two-way street without employees feeling put on the spot. Additionally, smartphone app can provide a platform for employers to regularly survey their workers, and for workers to submit ideas. But we can take this concept even further. Smartphones can be used to provide day-today or longer-term objectives that are clear and consistent. And employees can easily check off what they ve accomplished without having to report directly back to a supervisor. Workers can also use an app to complete timesheets. From a management perspective, all this data can flow into a dashboard to track both real-time and longer-term productivity and engagement metrics. Lastly, a mobile application can be an excellent channel for providing training, even to employees who haven t even started their jobs. This can help employees feel like they are part of a firm upon hire, and not several weeks later when they actually start. Moreover, by providing training through a mobile app, new employees can get up to speed faster while more seasoned employees can access information and training that will help them gain more skills, improve in their jobs, and potentially achieve higher status within the company. 14

9 Conclusion Ultimately, the goal of improving retention rates should be the focus of any business that wants to grow and compete in the global economy. Employee engagement, particularly in industries with high turnover and where employees are not already digitally connected through their jobs, is integral to reducing turnover. By providing a mobile platform for employees to feel connected, understand and achieve company objectives, and receive the training and information they need to excel in their positions, businesses can find a highly efficient and effective means to improve employee engagement. And by improving engagement, and thus retention, it s quite likely that businesses will improve productivity and profitability, with the platform paying for itself several times over. About StaffCircle StaffCircle s mission is to improve and empower workers and managers at all levels. StaffCircle provides a staff experience platform which digitises sentiment, communication, training, ideas, tasks and directory and delivers it to staff via the smartphone in their pocket. This reduces staff attrition and creates greater employee engagement, empowerment and productivity.