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Unlocking Workforce Engagement: The Critical Business Issue of the Decade

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Unlocking Workforce Engagement: The Critical Business Issue of the Decade

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Presented at Workforce Engagement, September 18, 2013

With today’s global economy dependent on people and their knowledge, skills and commitment, companies need to fully engage their workforce to be successful. The challenge is enormous. Demographics suggest critical talent shortages across industries and geographies. At the same time, we are experiencing record levels of employee disengagement. It has become the critical business issue of the decade. The company can effectively engage its workforce can create a significant competitive advantage going forward.
Human Resource professionals are positioned to play a key role in workforce engagement. In this presentation, you’ll hear specific strategies and tools for developing human capital solutions that are needed to unlock workforce engagement. We will provide participants with an understanding of concepts like behavioral economics, perceived values and amplified voices. As a result, participants will leave the presentation with specific actionable items that they can bring back to their workplace to immediately begin to drive cost effectiveness, improve productivity and increase company performance.

Presented at Workforce Engagement, September 18, 2013

With today’s global economy dependent on people and their knowledge, skills and commitment, companies need to fully engage their workforce to be successful. The challenge is enormous. Demographics suggest critical talent shortages across industries and geographies. At the same time, we are experiencing record levels of employee disengagement. It has become the critical business issue of the decade. The company can effectively engage its workforce can create a significant competitive advantage going forward.
Human Resource professionals are positioned to play a key role in workforce engagement. In this presentation, you’ll hear specific strategies and tools for developing human capital solutions that are needed to unlock workforce engagement. We will provide participants with an understanding of concepts like behavioral economics, perceived values and amplified voices. As a result, participants will leave the presentation with specific actionable items that they can bring back to their workplace to immediately begin to drive cost effectiveness, improve productivity and increase company performance.

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Unlocking Workforce Engagement: The Critical Business Issue of the Decade

  1. 1. Unlocking Workforce Engagement: The Critical Business Issue of the Decade Jim Sillery Principal Buck Consultants
  2. 2. Today we will talk about… • The current situation • What is creating the disconnect • What you can do about it Unlocking Workforce Engagement 2
  3. 3. What is employee engagement? An "engaged employee" is one who is fully involved in, and enthusiastic about their work, and thus will act in a way that furthers their organization's interests. Employee engagement is a measurable degree of an employee's positive or negative emotional attachment to their job, colleagues and organization which profoundly influences their willingness to learn and perform at work. As a result, engagement is distinctively different from employee satisfaction, motivation and organizational culture. Unlocking Workforce Engagement 3
  4. 4. Creating engagement sounds simple… … You just balance organization and individual needs Unlocking Workforce Engagement 4
  5. 5. Why is engagement important? Highly engaged employees outperform their disengaged colleagues by 20 to 28 percent. The Conference Board Unlocking Workforce Engagement 5
  6. 6. “May you live in interesting times” During the first 10 years of the 21st Century, there was a major terrorist attack, an economic recession, and a major downturn in the U.S. stock market. Unemployment exceeded the 10 percent mark for the first time since 1983. After a series of declines, household wealth increased somewhat with the stock market gains, but remained well below pre-recession levels. Unlocking Workforce Engagement 6
  7. 7. As we woke up to collapsing financial markets… And then things got really bad… Unlocking Workforce Engagement 7
  8. 8. Followed by collapsing job markets…
  9. 9. By 2009, HR had taken a number of steps to address the impact of the recession Source: Buck Consultants Salary Planning Survey
  10. 10. By the height of the recession… Only 28% of employees were engaged in their jobs 54% were not engaged and 18% were actively disengaged Source: Gallup Q12 Survey
  11. 11. And everyone was looking for the light at the end of the tunnel…
  12. 12. Since that time, we have seen… An improving economy…
  13. 13. And an improving job market…
  14. 14. New opportunities… new challenges Today, companies are looking at opportunities opening across global markets For many companies, the decisions made today will determine their success for years to come To be successful, companies need to fully engage their workforce Today’s global knowledge-based economy is dependent on people and their knowledge, skills, and commitment The challenge: - Talent shortages exist side by side with high unemployment - Battered by the recession, workforce discontent spreads - Retention is jeopardized by “latent turnover” Unlocking Workforce Engagement 14
  15. 15. All signs pointing to an economic upturn and global recovery…
  16. 16. But employee engagement is as bad, if not worse… … with only 30% engaged in their jobs Despite sincere efforts by companies, workforce engagement remains a persistent problem, with an annual cost estimated at over $550 billion a year. "But there is a gap between knowing about engagement and doing something about it in most American workplaces.“ Gallup
  17. 17. Recent college graduates are persistently under employed More than 50% of Gen Y are prepared to accept a lower wage or lesser role if their work contributes to something more important of meaningful More than 60% of Gen X is looking for a new job within a year 46% of Baby Boomers say career goals are not being advanced in their current job. And so, as companies emerge from the tunnel, they find that something has changed…
  18. 18. Understanding the Disconnect: It’s a matter of perspective Companies use their Left Brain: • Programs • Procedures • Policies Employees use their Right Brain: • Perceptions • Behaviors • Culture Unlocking Workforce Engagement 18
  19. 19. Understanding and managing change In addressing change, companies often confuse process -- visioning, chartering, change teams, planning, employee presentations -- with dialogue… And, they often confuse behavior change with engagement
  20. 20. The Left-Brain is Driving Company Actions We communicate a pay for performance environment, but… In 2011, high performers will average a 4.0% merit increase While “middle” performers will average a 2.7% merit increase 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 1974198319851987198919911993199519971999200120032005200720092011 30 Year Salary Budget History NE EX Exec
  21. 21. Companies try to promote “consumerism”, but too often, efforts at engagement are aimed at compliance rather than commitment In employee benefits, companies have had to communicate many changes… But to employees, change means reduction… Communication is always one way… And choice is a balance between reward and punishment…
  22. 22. But the Right-Brain is driving employee response… “I understand why my company has to cut costs, but why do they have to cut what is important to us?” Employee response to interview question Unlocking Workforce Engagement 22
  23. 23. How does engagement fit in to company priorities? 6% 12% 21% 29% 39% 59% 20% 26% 38% 46% 49% 36% 32% 26% 36% 22% 10% 5% 27% 18% 5% 2% 2% 18% 15% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Reduce disciplinary issues Create a new culture Increase employee morale Increase productivity Hire top talent Retain top talent Extremely Important Very Important Moderately Important Slightly Important Not Important Source: Buck Consultants Salary Planning Survey Unlocking Workforce Engagement 23
  24. 24. “Today, the greatest challenge that a company can face is a lack of engagement… and not to be aware of the situation. Executive response to interview question
  25. 25. Employee value is tied to perceptions Behavior economics proposes theories based on psychology to explain anomalies in the market. Behavioral economics assumes that the information structure and the characteristics of market participants systematically influence individuals' investment decisions as well as market outcomes. Behavioral economics can help to better understand how employees make decisions and how those decisions affect their perception of the value being delivered. To an employee, perception is reality Unlocking Workforce Engagement 25
  26. 26. How are perceptions formed? Three main themes in behavioral economics: • People often make decisions based on “rules of thumb”, not rational analysis • The way a problem is presented will affect the decision a person makes on how to act • There are behavioral explanations for observed actions that are contrary to rational expectations Unlocking Workforce Engagement 26
  27. 27. Pay Is Not Enough • As companies seek to re-engage a workforce battered by the recession, many find that pay alone is not the answer • Best practices show the top drivers of workforce response are related to perceptions of careers • Employees define career as current and future opportunity for pay, growth, satisfaction and employability • Capturing the full potential of careers is critical to engagement and long-term commitment • Capturing this potential requires two-way communication and mutual understanding Unlocking Workforce Engagement 27
  28. 28. Fuel for Career Management… If companies help manage career and growth Employee Perceived value in career motivates behavior change Career motivation Employer Unlocking Workforce Engagement 28
  29. 29. … Becomes Fuel for Engagement Employee Employer Engagement If companies manage value, not cost The response to value drives desired behaviors and results Unlocking Workforce Engagement 29
  30. 30. Building an engagement strategy • One size will never fit all • Look for root causes… “The 5 Whys” • There are no short-term decisions • Follow the eight step process Unlocking Workforce Engagement 30
  31. 31. 1. When you listen, know who you are listening to… While employee feedback can give you data… … Amplified voices can give you information and insight Unlocking Workforce Engagement 31
  32. 32. 2. Focus on value delivered Will the perceived value of pay create a premium or deficit? Should it? 0 50 100 150 200 250 300 350 400 450 1 2 3 4 5 6 7 8 9 10 Actual vs Perceived Value Premium Actual Discount Unlocking Workforce Engagement 32
  33. 33. 3. Take a total rewards perspective A total rewards strategy becomes a filter for responding to internal and external pressures in a consistent way… Unlocking Workforce Engagement 33
  34. 34. 4. Understand – and use - your work culture • How it is organized • How roles are defined • Types of people that succeed • How performance is managed • How people are rewarded A company’s work culture defines
  35. 35. 5. Understand who your employees are A demographics analysis can provide insights into why specific events are occurring, like challenges with attraction, retention, engagement and performance. Unlocking Workforce Engagement 35
  36. 36. 5. Understand what your employees want/need A cost/value analysis will show you where you should invest money … and where you can cut without pain
  37. 37. 6. Base “Career” on what employees are capable of doing, not what they are doing now Most companies use position-based career development, using “job ladders” to identify career paths This puts current skills and experience as primary drivers of advancement
  38. 38. Differentiating competencies, which are the true predictor of future success, can also be nurtured Career paths are defined by developing differentiating competencies models The result is a dynamic process where someone will be pre- disposed to success But, studies show the correlation between experience and high performance is almost zero
  39. 39. 7. Build a platform for delivery – “4i’s” Unlocking Workforce Engagement 39
  40. 40. 8. Profile desired response to “Careers” Unlocking Workforce Engagement 40
  41. 41. Questions Jim Sillery Principal +1 (1) 952 806 6114 James.sillery@buckconsultants.com Unlocking Workforce Engagement 41

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