Christian Hasenoehrl of Gallup looks ahead to what the main focus areas of HR should be in the coming year as the market stabilises and business looks once again to growth.
As 2009 comes to a close, we can say with certainty that the recession has affected everyone and if not, according to current budget proposals it soon will. Many of us would be forgiven for thinking that the ‘human’ element of HR was missing in 2009. With most companies in the beginning stages of three year recovery plans, it is safe to say HR risks being portrayed as the executioner, if of hard and necessary strategy. One of my HR contacts at a FTSE 50 company in financial services recently lamented that he is the most unwelcome person at team meetings, due to his involvement in rebuilding leadership teams.
Even though the government is actively trying to send all banking jobs overseas, the good news about the current environment is that most employees who have answered the question this year, feel quite a bit better about their frozen salaries and capped or eliminated bonuses than they did about plump pay packages in the old world. In nearly all clients where we asked “I believe my salary and benefits are commensurate to my contribution” the scores went up drastically in 2009. Apparently, it’s just great to have a job!
On balance, implementing strategies to weather the economic crisis is the role of any well run management team. The best performers of the FTSE 100 in the past two years have had succinct, focused and well communicated three year plans put in place back in early 2008 to address the economic realities of our time. In some cases however business leaders have been reactive and focused on short-term plans for survival, failing to convey a sense of direction and hope for the business. Thus, many business leaders are now asking themselves if they are facing a mass exodus at the first signs of better opportunities elsewhere.
The real issue is that most organisations in the UK do not foster the basic conditions that are necessary to underpin the engagement of their employees – in good times or bad. Employee engagement refers to an individual’s involvement and satisfaction with, as well as enthusiasm for work. Engagement is built by meeting basic human needs consistently in the workplace. We currently help over 500 companies manage engagement and measure the underlying conditions in a psychometric assessment know as the Q12© across over six million employees. When measured across all companies that actively improve and focus on engagement in the UK, we find that the number of engaged employees is 40%, with only 17% actively disengaged. However, on average in the UK, only 20% of employees are engaged with an equal number of employees actively disengaged. That discrepancy should inform the HR agenda for 2010.
Moreover, it is also essential to understand how our world has changed. In a recent study, we found that only 42% of all respondents had not been directly impacted by a redundancy programme or downsizing since 2007. More critically, we found that roughly 17.4% had been impacted in the second half of 2008 and 18.9% had been impacted in the first tjhree months of 2009, showing the acceleration in pace of activity this year which leads us to believe that many companies simply reacted. In fact, only 3.7% of employees reported being affected in the first 6 months of 2008, which shows once again how industry in general got caught off guard. Broadly across our sample we found that 34% of employees unaffected by these events were engaged and only 23% of employees that were affected remained engaged. Yet, two FTSE 100 companies in the automotive and financial services sectors achieved dramatic engagement increases despite going through major redundancies. What did these companies do differently?
In order to survive companies need to build psychological resilience among their workforces and engagement underpins this. Once companies have agreed their strategic response to a severe downturn, aggressively pursuing an engagement strategy will help raise productivity and maintain morale. If left unmanaged, uncertain times will distort how your employees feel and perform. In the spirit of making 2010 the year of engagement focused on recovery and growth, we have a few suggestions:
- Engagement is driven top-down and built bottom-up. Leaders need to be seen as committed. In these time, trust, hope, stability and compassion count for more than complex mission statements.
- Trust in leadership is closely linked to engagement - The chances of employees being engaged at work when they do not trust the company’s leaders are just one in twelve, versus one in two if they are trusted.
- The single most powerful question we ask employees was whether their company’s leadership made them feel enthusiastic about the future. Over two thirds (69%) of employees who strongly agreed with this statement were engaged in their jobs, compared to 1% of employees who didn’t agree.
- Cultivating and nurturing engagement requires focus and effort by each leader in the business. HR has to support capability building and focus on giving managers the ability to have powerful and effective one to one conversations.
- Ensure company strategy and communications are not just cascaded to the local team level but made relevant to local teams. Teams that understand the bigger picture but maintain a focus on areas within their remit can emerge with their engagement largely unscathed from periods of upheaval. HR, strategy and internal comms have to partner closely in uncertain times.
- Focus on your employees’ strengths. Strengths are a combination of talent, skills, competencies and experience. Our data indicates that focusing on people’s strengths effectively eradicates active disengagement at work. Rebuilding the organisation for growth, gives HR an opportunity to put in place effective recruitment methods that do not leave out the talent piece of the agenda.
Christian Hasenoehrl is a Partner at Gallup. He is available at +44 (0) 207 950 4432 or via email at [email protected]