Stop your staff walking

If you suspect that your staff are resolving to find new jobs in 2001, shouldn’t you be resolving to keep them? Retaining talented, productive people has emerged as the business world’s key issue, and there’s now plenty of evidence to suggest that while everyone wants to be paid the going rate, financial incentives are not the be-all and end-all.

A company that throws money at its employees to keep them happy is unlikely to retain their services in the long term. While earning a decent wage is still a primary motivating factor, once we advance above a certain level, it seems we value a challenging work environment, characterised by ownership, control and empowerment.

A global survey of 396 senior executives undertaken by CIMA found that 65% of the respondents interviewed, rated ‘challenging opportunities’ as the incentive they believe is the best way to motivate staff, above traditional incentives such as share options and profit sharing.

The survey also identified the characteristics required of successful business managers and found that those possessing strong leadership qualities, the ability to communicate, the company vision and the agility to adapt swiftly to change are best-suited to foster a business culture that will retain skilled staff.

The study suggests a general move away from financial incentives to focus on improving the human aspects of a job – cultivating an open business culture and developing a harmonious working relationship between managers and their employees.

And these findings are bourne out by a PricewaterhouseCoopers human resource business briefing.

‘Changes in working practices are leading to a dramatic shift in the traditional working relationship in favour of employees,’ says the report.

The internet is driving the pace of change
According to Maurice Cheng, director of member services at CIMA, the pace of change is accelerating due to the prominence of the internet as a business tool. Organisations are working to tighter deadlines, with shorter business plans and this means that employees need to ‘think outside the box’. Our changing working world demands a level of creativity and access to information that was previously the domain of senior management alone.

‘The idea that an employee has one task or function incorporated into their job description is no longer applicable. Multi-tasking, incorporating a variety of tasks, functions and responsibilities, allows employees to be outward focused and able to think and use information effectively,’ says Cheng.

Cheng believes it is the responsibility of management to drive the pace of change and ensure ‘everyone within the organisation is part of the global environment. Departmental lines are being broken down and command hierarchy in corporate structures no longer makes business sense’.

There is a move towards human-to-human interaction between management and employees. Everyone from senior management down is becoming more accessible and approachable, and while this obviously presents a problem in companies which employ thousands of people, it can certainly be applied in smaller departments and work groups among line managers.

Intrinsic, intangible benefits are what really count
Ally Rowland-Smith, a communication consultant with Hewitt Associates, agrees that financial incentives are less crucial to employee engagement (as defined by specific behaviours) than organisations often suspect.

Rather, it is generally the more intrinsic intangible benefits such as trust in leadership and challenging opportunities that have greater impact on this issue.

Throwing more money at employees does not tend to solve the problem, she says.

Hewitt uses a seven-factor model (including opportunities, work activities, pay and rewards, and relationships, among others) to measure employee engagement. Determining the relative importance of each of the seven factors will help a company to better attract, retain and motivate its employees by knowing where to focus resources.

Surprisingly, in every study of this kind that Hewitt has undertaken, the ‘pay and rewards’ factor has never featured among the top two most significant factors.

Hewitt does not identify a generic set of opportunities that every organisation should give its employees, but instead believes that every organisation is unique, with unique needs and values.

However, they have identified various behaviours that tend to contribute to an optimal working environment. Among these is a certain kind of management style (a ‘subfactor’ under ‘relationships’ in their engagement model), which can create a work environment that fulfils the more intangible needs of employees.

Rowland-Smith explains this by saying: ‘People are attracted to a company for a variety of reasons, among these is the empowerment they expect to be given within their jobs.

Managers need to be adaptable and help the individual understand the role they play within the wider organisation. The best managers tend to tell their staff not just what their responsibilities as employees are, but what’s in it for them as individuals.’

The role of the manager is certainly an important factor in determining work satisfaction. A manager must ensure that employees are aware of their importance within the company or firm. Individual goals need to be linked in with the larger goals of the organisation.

Internal branding is a means to incorporate staff in the company vision
Rowland-Smith introduced the importance of internal branding as a means to incorporate staff within the global strategy of the company. This, she says, can be achieved by aligning the internal branding of a company with its overall business strategy and she quoted the example of one of Hewitt’s clients, Southwest Airlines.

The company has successfully aligned its external and internal branding placing it in the top 100 companies to work for in the US for several consecutive years. The company’s brand – ‘the freedom to fly’ – is reflected in the internal company promise, ‘freedom begins with me’. In this way, the vision is effectively communicated throughout the organisation and is integral to the organisational culture.

Angela Baron, an advisor at the Chartered Institute of Personnel Development, has similar views to those of Rowland-Smith and Cheng: ‘People are motivated by other aspects of their job, above a certain level.’

Job enjoyment is a key factor
Baron stresses the importance of job enjoyment as the key factor in employees remaining with their company. Job enjoyment, she says ‘comprises intrinsic motivational factors such as ownership, personal control and empowerment.

‘People don’t generally leave a job because of the money, but because they do not like their job,’ she says.

Baron also believes environmental issues are key to retention. Put very simply – people need to be well managed.

To aid this many companies are cutting traditional hierarchies out of their business structure and emphasis is being placed on personal interaction and open communication. Echoing the findings of the CIMA study, Baron says business leaders need to coach, encourage and inspire their employees if they wish to retain them.

She dismisses the idea that a more internationally mobile workforce, that preferred short-term project work, is significantly affecting retention levels. She believes the hype is exaggerated.

‘The evidence of the CIPD does not suggest such a development. Quite simply, the numbers do not bear up. The majority of employees have families to support and depend on the security of a full-time position.’

PwC identified the increasing demand for internationally mobile workers as a key finding of a new European survey, but tempered this by saying that ‘potential conflicts with spousal careers, children’s education and so on are prompting employers to reconsider alternatives to traditional long-term postings.’

However, short-term commuter and virtual assignments are becoming a reality, but the same set of principals are being applied to find staff for important job functions – stimulating work, flexible hours and a corporate culture which values their work – that are used for full-time employment.

Employers need to change the way they treat staff
Employers should take note of the changing tide. The corporate landscape is changing in favour of a more empowered employee who will not be appeased when a pile of bank notes are thrown in their general direction. If a company wishes to hire and retain the best available talent now and in the future they will need to fundamentally change the way they treat their staff.

Kevin Delany, a partner at PwC has this to say about the role of the new breed of employees: ‘Employees will choose the type of work they do, control their own career advancement and set their own training needs as best fits with their lifestyle.

‘The old and existing command and control management structure will no longer exist in the workplace of 2005 allowing employees the freedom to manage their careers.’

It seems almost ironic, that in the age of depersonalisation brought about by internet technology, where it is now possible to conduct an interview, review an employee’s performance or communicate a marketing strategy without any human contact, employees are demanding to be treated as individuals, with their own development needs at the top of the list.

While employees still demand to be paid a market wage, they are unlikely to remain in a position if that is all they get.

The CIMA study is evidence of the changing attitudes of senior executives who represent some of the world’s top-grossing multinational companies. Increasingly, other organisations are addressing the need to challenge, motivate, inspire and empower employees.

Companies that dismiss such strategies will be left behind to count the cost … and it won’t be cheap.


>CIMA global

Hewitt Associates

Chartered Institute of Personnel Development

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