Measuring Employee Engagement

Measuring Employee Engagement Navigating the Options & Vendors June 9, 2016

Today s Agenda & Presenters Why Does Employee Engagement Matter? Designing an Employee Engagement Strategy Choosing a Measurement Option Navigating Employee Engagement Vendor Landscape Key Takeaways and Q&A Join the conversation on Twitter @RAEricksonPhD @madhura_chak @Bersin Robin Erickson, PhD Vice President, Talent Acquisition, Engagement & Retention Research Bersin by Deloitte / Deloitte Consulting LLP rerickson@deloitte.com @RAEricksonPhD 1 Measuring Employee Engagement Madhura Chakrabarti, PhD Research Manager, Talent Analytics Research Bersin by Deloitte / Deloitte Consulting LLP mchakrabarti@deloitte.com @madhura_chak Copyright 2016 Deloitte Development LLC. All rights reserved.

Why Does Employee Engagement Matter?

Many Business Outcomes are Linked to Employee Engagement Lower Voluntary Turnover 1 Lower Costs 1 Fewer Absences 2 Fewer Mistakes 3 Higher Productivity 2 Increased Customer Satisfaction & Loyalty 2 Improved Safety 3 Higher Revenue & Market Share 4 Sources: 1 Employee Engagement: A Changing Marketplace, Bersin & Associates / Stacey Harris, 2010; 2 Business-Unit-Level Relationship Between Employee Satisfaction, Employee Engagement, and Business Outcomes: A Meta-Analysis, Journal of Applied Psychology / James K. Harter, Frank L. Schmidt, and Theodore L. Hayes, 2002.; 3 Employee Engagement: The Key to Realizing Competitive Advantage, Development Dimension International / Richard S. Wellins, Paul Bernthal, and Mark Phelps, 2005; 4 2015 Employee Trends Report, Quantum Workplace / Natalie Hackbarth, Dan Harris, and Hilary Wright, 2015. 3 Measuring Employee Engagement Copyright 2016 Deloitte Development LLC. All rights reserved.

Let s hear from you How would you characterize your engagement and retention program? Excellent Good Fair Poor 4 Measuring Employee Engagement Copyright 2016 Deloitte Development LLC. All rights reserved.

Global Leaders are Concerned about Employee Engagement Characterization of engagement & retention program Poor 10% Excellent 11% Importance of employee engagement 85% Fair 32% Good 47% Of global CEOs and HR leaders rated Employee Engagement Urgent or Important Source: 2016 Deloitte Global Human Capital Trends Data, Deloitte Consulting LLP 5. Measuring Employee Engagement Copyright 2016 Deloitte Development LLC. All rights reserved.

Let s hear from you To what extent are you rethinking your engagement strategy? Great extent Some extent Small extent Not at all 6 Measuring Employee Engagement Copyright 2016 Deloitte Development LLC. All rights reserved.

90% are Rethinking Their Engagement Strategies Extent to which global respondents are re-evaluating their engagement strategies Not at All 10% Great 19% Small 25% Some 46% Source: 2016 Deloitte Global Human Capital Trends Data, Deloitte Consulting LLP 7. Measuring Employee Engagement Copyright 2016 Deloitte Development LLC. All rights reserved.

Designing an Employee Engagement Strategy

Employee Engagement Strategy Stages Stage 1: Commitment and Planning Stage 3: Evaluation and Action Stage 2: Assessment and Analysis Source: Designing an Employee Engagement Strategy, Bersin by Deloitte / Robin Erickson, Ph.D. and Heather Bussing, 2016 9 Copyright 2016 Deloitte Development LLC. All rights reserved.

Stage 1: Commitment & Planning Get buy in & commitment to change Stage 1: Commitment and Planning Identify Concerns Obtain Leadership Buy-In Determine Engagement Drivers Identify Operational Requirements Stage 3: Evaluation and Action Stage 2: Assessment and Analysis Source: Designing an Employee Engagement Strategy, Bersin by Deloitte / Robin Erickson, Ph.D. and Heather Bussing, 2016 10 Copyright 2016 Deloitte Development LLC. All rights reserved.

Stage 2: Assessment & Analysis Know WHY you are measuring before you decide HOW to measure Stage 1: Commitment and Planning Stage 3: Evaluation and Action Stage 2: Assessment and Analysis Choose Evaluation Option Conduct Assessment Analyze Data Source: Designing an Employee Engagement Strategy, Bersin by Deloitte / Robin Erickson, Ph.D. and Heather Bussing, 2016 11 Copyright 2016 Deloitte Development LLC. All rights reserved.

Choosing a Measurement Option

Let s hear from you How do you measure employee engagement? Annual survey Pulse survey Interviews/focus groups Social media monitoring 13 Measuring Employee Engagement Copyright 2016 Deloitte Development LLC. All rights reserved.

How Global Companies Measure Employee Engagement Annual Survey 40% Recurring Surveys 13% 67% use surveys As Needed Pulse 14% Interviews/Focus Groups 17% Social Media Monitoring 4% Other 12% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Source: 2016 Deloitte Global Human Capital Trends Data, Deloitte Consulting LLP 14. Measuring Employee Engagement Copyright 2016 Deloitte Development LLC. All rights reserved.

Approaches to Measure Employee Engagement Surveys Annual Surveys I Pulse Surveys Interviews Stay Interviews I Exit Interviews I Focus Groups Internal data Content/Text Analysis I Social Network Analysis Source: Evaluating Employee Engagement Measurement Options, Bersin by Deloitte / Madhura Chakrabarti, Ph.D. and Robin Erickson, Ph.D., 2016 15 Measuring Employee Engagement Copyright 2016 Deloitte Development LLC. All rights reserved.

Surveys Annual surveys Designed to obtain a thorough understanding of employees engagement Best used as a regular, all-inclusive, health check up Most established people metrics in an organization Long time between two annual surveys may prove to be a challenge Pulse surveys Short measurement instrument Designed to gather quick, frequent, timely understanding of employee engagement Best used when in need of timely data to Measure specific topics relevant at a given point of time Dig deeper into opportunities identified in annual surveys Assess changes resulting out of annual surveys Multiple pulse surveys can cause survey fatigue and reduced accountability Source: Evaluating Employee Engagement Measurement Options, Bersin by Deloitte / Madhura Chakrabarti, Ph.D. and Robin Erickson, Ph.D., 2016 16 Copyright 2016 Deloitte Development LLC. All rights reserved.

Interviews Focus Groups Employees are brought together to participate in a structured discussion Asked to provide feedback on a specific topic Best used when in need of different in-depth perspectives Time and effort needed to schedule focus groups and analyze results, can be a challenge Stay Interviews Current employee is asked about what s/he likes about the current role and workplace Uncover areas for improvement and what is working well; leads to increased engagement and drives continued retention Best used as a proactive retention tool when at-risk employees are identified Exit Interviews Voluntarily exiting employee is asked about his or her reasons for leaving Best used to understand drivers of attrition Low validity of exit interviews is a cause of concern Source: Evaluating Employee Engagement Measurement Options, Bersin by Deloitte / Madhura Chakrabarti, Ph.D. and Robin Erickson, Ph.D., 2016 17 Copyright 2016 Deloitte Development LLC. All rights reserved.

Internal & External Data Text Analysis Unstructured text is analyzed manually or via advanced techniques Best used as a powerful and unique source of information, studied in combination with other data Can be a cumbersome and time consuming manual process without software Social Network Analysis Structures are studied using network and graph theories Can yield useful information about how people interact with each other, how information is shared, strength of various networks Not a common engagement measurement technique yet Best used to study intra- and inter-team communication patterns, the means by which these patterns form, and how that information correlates with team-level engagement Source: Evaluating Employee Engagement Measurement Options, Bersin by Deloitte / Madhura Chakrabarti, Ph.D. and Robin Erickson, Ph.D., 2016 18 Copyright 2016 Deloitte Development LLC. All rights reserved.

Navigating Employee Engagement Vendor Landscape

Diagnose Opportunities Why assess engagement? Employee Engagement Vendor Market Navigator Engagement Diagnostic Specialists Offer comprehensive measurement of employee engagement with some consultative support available. General Purpose Assessment Platforms Offer platforms for companies to develop and launch their own surveys; many offer templates, item libraries, and some surveyrelated consulting help. Offer platforms for managing and improving work (e.g., performance management, project management, goal management, etc.) for which engagement is an important daily metric. Enable Change How will the data be used? Global Consultancies Market Research Specialists Work Management Solutions Support global employee engagement initiatives with broad complementary service offerings available to drive change. Apply consumer market research capabilities to capture the voice of the employee. Employee Mood Monitoring Solutions Pair frequent means of measuring employee engagement with software platforms to support analytics and other related activities. Employee Engagement Monitoring Solutions Monitor Health Why assess engagement? To Culture Incumbent HR or Business Systems (future) Offer platforms to manage peer-to-peer recognition and / or feedback, and which can be sources of derived engagement-related data. Enhance Productivity How will the data be used? Employee Feedback and Recognition Solutions Pair frequent means of measuring employee mood with software platforms to support analytics and other related activities. Source: Navigating the Market for Measuring Engagement, Bersin by Deloitte / Sally-Ann Cooke and David Mallon, 2016 20 Measuring Employee Engagement Copyright 2016 Deloitte Development LLC. All rights reserved.

Stage 3: Evaluation and Action You have to do something! Stage 1: Commitment and Planning Report Findings Create Action Plans Manage Change Evaluate Results Adjust Strategy as Needed Stage 3: Evaluation and Action Stage 2: Assessment and Analysis Source: Designing an Employee Engagement Strategy, Bersin by Deloitte / Robin Erickson, Ph.D. and Heather Bussing, 2016 21 Copyright 2016 Deloitte Development LLC. All rights reserved.

Key Takeaways and Q&A

Key Takeaways Start with a strategy, not a tool or a vendor d Only measure engagement drivers that your leadership is willing to change Improving communications, especially between employees and their managers, is foundational Measurement options include surveys, interviews, and internal and external data analysis To choose a vendor, first ask why you are assessing engagement and how you intend to use the data 23 Measuring Employee Engagement Copyright 2016 Deloitte Development LLC. All rights reserved.

Questions? Robin Erickson, PhD Vice President, Talent Acquisition, Engagement & Retention Research Deloitte Consulting LLP 111 S. Wacker Chicago, IL 60606 Email: rerickson@deloitte.com Office: (312) 486 5368 Twitter: @RAEricksonPhD Madhura Chakrabarti, PhD Research Manager Talent Analytics Deloitte Consulting LLP 555 Mission Street San Francisco, CA 94105 Email: mchakrabarti@deloitte.com Office: (510) 251-4403 Twitter: @madhura_chak 24 Measuring Employee Engagement Copyright 2016 Deloitte Development LLC. All rights reserved.

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