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What is Employee Engagement?
TalentMap definesengagementasthe extenttowhichemployeesconnect,
bothlogicallyandemotionally,totheirorganization,resultinginhighlevels
of commitmentanddiscretionaryeffort –and ultimatelyleadingtobetter
employeeperformance andpositive businessoutcomes.
Positive businessoutcomesare the mandate foreverymarket,butespecially
ina volatile market–andno marketismore volatile thanthe current
Financial Services market,CreditUnionsincluded - engagingemployeeshas
become seriousbusiness.
Employee engagementhasbeenidentifiedasone of the top three concerns
for the war on talent,the single biggestchallengefor CreditUnions –
especiallycompetingagainstthe largerbankswithsomewhatdeeperpockets
for compensatingemployees.
Engagementcanbe seenas the connectionbetweenanindividual’s“head”,
“heart” and“hands”
Engagementresearchconsistentlylinksemployee engagementtopositive
businessoutcomes. A recentmeta-analysisof 58 independentstudiesfound
compellingandoverwhelmingevidence thatemployeeattitudesand
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behaviourshave strongcorrelationswithcustomersatisfactionandindirect
relationshipswithfinancial performance1
.
Basedon currentliterature,countlessstudies, andTalentMap’sresearch,as
illustratedinthe diagramsbelow, we establishadirectcorrelation between
levelsof employee engagement,productivityand membersatisfaction. Our
TalentGage surveyquestionnaire isacomprehensiveinstrumentbasedupon
engagementandcorporate culture.
TalentMap’s Engagement Model
Why It Matters
• Organizationswithhighlevelsof engagement(65% orgreater) continue to
outperformthe total stockmarketindex andpostedtotal shareholderreturns22%
higherthanaverage in 2010. On the otherhand,companieswithlow engagement
(45% or less) hada total shareholderreturnthatwas28% lowerthanthe average.
(TrendsinGlobal Employee Engagement,AonHewitt,2011)
• Business/workunitsscoringinthe tophalf onemployee engagementdoubletheir
oddsof successincomparisontothose in the bottomhalf.Those at the 99th
1 Y.Hong, H Lio, J, Hu,K, Jiang, “Missing Linkin the ServiceProfit Chain:AMeta-AnalyticReview oftheAntecedents,
Consequences andModerators ofServiceClimate,” Journal ofApplied Psychology, 98/2,237-267(2013)
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percentile have nearlyfivetimesthe successrate asthose at the 1st percentile.
Mediandifferencesbetweentop-quartile andbottom-quartile unitswere:
Q12® Meta-Analysis: The Relationship Between Engagementat Work andOrganizational Outcomes,Gallup,2009
(examinationof199research studies across 152 organizations in 44industries and 26countries.)
• Organizationswithhighemployee engagementhada19% increase inoperating
income andnearly28% growthin earningspershare (EPS).Conversely,companies
withlowlevelsof engagementsaw operatingincomedropmore than32% andEPS
decline 11%. (How Employee Engagement Drives Business Success, Mosley, Eric, 2011, citing
Towers Watsonstudyof 50 companies over a one-year period)
• Increasinganindividual’slevel of engagementcanimprove theirperformancebyup
to 20% andreduce the probabilitythattheywill leave by87%. (Institute for
Employment Studies(IES) 2008 publication, Going the Extra Mile)
The Current Picture for Credit Unions – The Challenges are
Real
While Canadahas beenthe darlingof the financial world,andrankedbythe
World EconomicForumas the most soundbankingsysteminthe world6
yearsin a row,the industry as a whole isfacingcontinuouschallenges ina
tumultuous businessclimate. Canadaisnot immune tothese challenges.
Amongthe key issues - increasedcompetition,evolving andcomplex
regulatoryreform,convergence of industriesandconsolidation,responding
to global competition,needforinnovationinproducts/processes,evolving
customerservice expectations,andof course, attractingandretainingtalent.
More and more executivesare comingtotermswiththe concept of
employeeengagement. Theyrealizethattheirpeopleare theirbiggestasset,
and theirpeople will drivetheirultimate success. Thatrealizationbrings
home the pointthat theyneedtomake theirorganizationsareallygreat
place to work,and that thatwill ultimatelyleadtotheirsuccess.
12% in customer ratings 49% in safety incidents
16% in profitability 37% in absenteeism
18% in productivity 41% in patient safety incidents
25% in turnover (high-turnover orgs.) 60% in quality (defects)
49% in turnover (low-turnover orgs.)
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The CanadianFinancial Servicesindustryemploys4% of the Canadian
workforce – 783,000 employees. InToronto,the Financial ServicesIndustry
employsawhopping8% of its population,the mostFinancial Services
workerspercapita inNorthAmerica. Andtheyare a talentedbunch.
The CanadianFinancial ServicesIndustryhiresbetterqualitystaffthanany
otherindustryinCanada. There is a disproportionateamountof university
level graduates inthe industry –57% whichis20% higherthanindustry
average. Many employees holdmultiple professional designations.
No industryhasa largerimpacton the workforce. Andas such,no industry
has a greaterneedtolookat the threatsto itsworkforce.
Beinga smallerfishinabig sea,suchis the case forCreditUnions,only
servestoamplifythischallenge.
The War to Develop and Retain Talent – Top 3 Concerns
Deloitte andTouche’sstudy onGlobal HumanCapital Trendsfor2013
indicatedthatthe war to developandretaintalentisthe singlebiggestissue
facingthe financial servicesindustry. The studyindicatedthatthe topthree
pressingHRand talentconcernsfacingthe Financial ServicesIndustryare
Developingleadersandsuccessionplanning,
Sustainingemployee engagementandmorale,and
Creatingcareerpathsand challengingjobopportunitiesforemployees.
So How Does a Credit Union Sustain Employee Engagement?
You may be interestedtohearthatoverall engagementinFinancial Services
ishigher– by more than 5% - than the average engagementscoresacrossall
othermarkets. That said,engagementscoresinFinancialServices
organizationshave dropped2% overthe pastthree years. What doesthis
mean?Thistranslatesinto higherexpectationsfromFinancial Services
employeesandachallenge toFinancial ServicesemployersintheirHR
strategiestoattract and retaintoptalent.
CreditUnionsneedtobe that much more strategicto achieve asimilar
result.
To sustain,maintain,andgrow employee engagement,youhave toknow
whatdrivesemployee engagement. Tomeasure whatdrivesemployee
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engagementrequiresastrategic,research-based,statisticallysound,proven
approach. Engagementneedstobe measuredregularly, actionplansneedto
be developedandimplemented,anditisimportantthatthese are regularly
assessedforeffectivenessandchange inthe environment.
While itistrue thatthere are some basicand commontruthsabout engaging
employees,everymarket,andeveryorganizationwithinthatmarket,hasits
ownchallengesandidiosyncrasies.
TalentMaphas interviewedthousandsof employeeswithinthe Financial
ServicesIndustryandhasfoundthatengagementinthissectorisdrivenby
ProfessionalGrowth
Organizational Vision
Teamwork
These driversare entirelyconsistentwithCreditUnions.
In additiontothese drivers,therehasalsobeenforwardmotioninthe areas
of Innovation,SeniorLeadershipandCompensation. These itemsare picking
up more and more influenceonemployee engagement inthe industry.
So if the challenge isengagingemployeesandwe know exactlywhat the driversof
engagementare forthisindustry,maybe we needalittle more insightintowhatis
goingon inFinancial Servicesthatisprecipitatingthesetrends.
Professional Growth
ProfessionalGrowthis consistently the numberone driverof engagementforall
employeesacrossall organizations, acrossall vertical markets. Thisistrue regardless
of the size of the organizationorthe type of industry. All industry-relatedresearch
supportsthis withoutexception. Growthandcareer development isnotonly the
numberone driverof employeeengagementinCanada,butinNorth America, as well
as internationally,includingAsiaPacificandEurope.
What isthe researchtryingtotell us?
In general,people are notsatisfiedwithstatusquo. Itishumannature to wantto
continue togrow,achieve,andfeel thatsense of personal accomplishment.
We wantto keeppace withcurrentstandards. We wantto stay relevant,andup-to-
date. The pace of change isfasterthan it’severbeenanda feature of the normal we
live andworkin. If youstand still,youwill be leftbehindandthe currencyof your
knowledge andskillsbecomeoutdated quickly.
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Professionalgrowthisaboutbecomingmore effective inthe workplace,advancingin
your careerand movingintopositionswhere youcanlead,manage,influence,coach,
and mentorothers.
It keepsyouinterestedandinteresting. Itincreasesconfidence,andhelpsyousustain
your career,notbecomingirrelevant.
Andif you work as part of a CreditUnion,thisjustbecame amplifiedbecausechange in
the industryisrapidand employeesinthissectorare educated,whichmeanstheywill
wantthis evenmore. Andwiththe upand cominggeneration,thisisonlygoingtobe
magnified.
Employersinthissectorhave theirworkcut outfor themand as such itis importantto
findoutspecificallywhatyouremployeesare lookingfor,whatyouare doingwell in
your organization,keepingthe dialogue open,andbe innovativeandintentionalin
professionaldevelopmentstrategies. Whatsetspeople apartinthisindustryis
versatility.
Developmentisnotalways“traditional”. Itcan include alateral move. Itisabout
listeningtoyouremployees,understandingtheirstrengths,andgivingstrong
performersopportunities. Developmentcaninclude role-rotationassignments,special
projects,on-the-jobtraining,jobshadowing,mentoringopportunities,etc.
Organizational Vision
Companiesthatenjoylong-termsuccesshave core valuesandpurpose thatremain
fixedwhile theirbusinessstrategiesandpractices mustconstantly adapttothe world
aroundthem.
Trulygreat companiesunderstandthe difference betweenwhatisgenuinelysacred
and shouldn’tchange andwhatisnot and needstoadapt.Thisabilitytomanage
continuityandchange iswhatbuilds a strongand compellingVision.
The Visionprovidesguidance abouttopreserve andwhat toadapt inorderto progress
forward. A strong Visionisarticulate andcoherent. Itdefineswhatanorganization
standsfor and why they exist. The envisionedfuture iswhat acompany aspiresto
become, andto achieve -somethingthatwill require significantchange andprogressto
attain. In short,it’sa roadmap andif done well,it’spowerful.
How well the Visionisshared,communicatedandescalateddownandthroughthe
organizationis a measure of anorganization’scommitmenttothe Vision and
ultimatelywill determinethe successof the Vision,andassuch,the company.
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Employeesthatcanget behindcompanyVisionanditscore valuesunderstandwhat
needstobe done for the companyto succeedlongterm, andtheyconnectthe work
theydo to it. These bydefinition are engagedemployees.
AndwhenOrganizational Visionisthe number2driverof employee engagement–as is
the case withCreditUnions,itbecomesaparamountmeasure thatneedsclose
monitoring,refining,andadaptation.
How can youmeasure if youremployeesare buyingintothe Vision? Employeeswho
are engagedandrespondtothe visionexhibitthe followingcharacteristics:
Theycan see what the organizationaspirestobe like inthe future
The understandwhatneedstobe done to succeedinthe longrun
Theysee the organization’slong-termpurpose anddirection
The feel theirleadershave paintedacompellingvision
Therefore,itimportantfororganizationstofindwaystofrequentlymeasure howtheir
employeesare connectingtotheirVision,andtodevelopactionplanstocontinuously
monitor,improve andadapttheirstrategiestoensure thisconnectionisthere,while
stayingontop of the continuallychangingmarketplace andadaptingthe strategies
that will staytrue to the core valuesandpurpose of the organization.
Teamwork
It isinterestingtonote thatTeamwork isa driverthat isunique to thissector
withthisitemrarelycomingupas engagementdriversinotherindustries.
So,why teamwork?
Teamsare formedwhenindividualswithacommontaste,preference,liking,
and attitude come andworktogetherfora commongoal.Teamsplaya very
importantrole inorganizationsaswell asourpersonal lives.
“Comingtogetherisa beginning.Keepingtogetherisprogress.Working
togetherissuccess”-HenryFord.
Thisproverbby HenryFord highlights the importance of workingtogetherin
teams.
Everyemployee isdependentonhisfellow employeestoworktogetherand
contribute efficientlytothe organization.
But Financial Servicesfirms,CreditUnionsincluded,have longbeenknownto
workin silos. The conceptof being connectedtoyourcolleagues hasbeen all
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but foreign. The workersare highly educated andhighlyindependentand
that has beenthe culture.
But the climate haschanged and iscontinuingtoevolve. Productsare
changing,there iscross-bundling,integrationof services,optimization,anda
needforstrongerfocuson the member.
Employeesinthisindustryare recognizingthe importance of teamwork more
and more and showingadesire tomove awayfromthe silo mentality and
tradingit in for the spiritof collaboration. We are not onlyseeingitinthe
raw data and statistical analysis,butinthe openendedcommentswhere
employeesare encouragedtoexpandontheirthoughts.
What are theysaying?
Remove barriers
We operate insilos
Needmore interaction,more collaboration
More sharingof ideas
Less“us” vs. “them”
Let’sworktowardsa commongoal
People are notwillingtogive upinformation
People are seekingownself interest
Needtobe more cohesive
Less“everymanfor himself”
No employee can workalone;he hasto take the helpof his colleaguesto
accomplishthe tasksefficiently.Ithasbeenobservedthatthe outcome
comesout to be far betterwhenemployeesworkinateam ratherthan
individuallyaseveryindividual cancontribute inhisbestpossible way.In
organizations,individualshavingasimilarinterestandspecializationscome
togetherona commonplatformand forma team.
So whatis an organization thathastraditionallyworkedinsilos dotomove
towardsa more collaborativeenvironment?
Understandthat the problemisthere. Then breakthe silostofix the system.
It’sa bitof a philosophical shiftforthe industry,butthe research indicatestousthatit
istime to addressthe shift.
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But What About the Member?
We have discussedwhatdrivesengagementforemployees of CreditUnions.
What isperhapsevenmore interestingiswhatdoesnotseemtodrive
engagement. Couldthisbe anindicatorof a largerproblem?
MemberFocus– an area of pivotal concernforthe CreditUnions – hasranked
nearthe bottomof areas that drive employee engagementforthe pastfour
years. In othermarkets,thisdimensiontendstorankhigher.
While MemberFocusmaynot be affectingemployeeengagement,itis
stronglyaffectingmembers,andassuchthe industryasa whole. Of
paramountconcernto rebuildingtrustand memberconfidence inboththe
brand andreputationof eachfirm. There is a burdenof responsibilityon
organizationsinthe industrytofix the negative marketperception.
The needto developbetterprocessestodrive performanceandimprove the
memberexperience will be paramountinitssuccess. The wordof the day is
“optimization”. Understandingthe memberandtheiruniqueneeds,cross
bundlingproducts,creatingone pointof contact,improvingloyalty
programs,and cross-sellingisthe wayof the future andshouldbe driving
businessstrategiesinthissector.
How does a CreditUnion getitsemployeesinvestedinfocusingonthe
member?
There isa needtofocuson humancapital strategiestostaycompetitive
PerhapstyingMemberFocusintothe Organization’sStrategyisthe key. We
knowthat employeesgetengagedthroughVision,andtheygetengaged
throughDevelopmentopportunities. Perhapsthe answeristotie the
memberintobothinan obviousway. If your people believethatthe
memberisthe keyto professional growthandstayinginnovative,theymay
see a much clearerlinkbetweenthe organization’sobjectivesandtheirrole
inachievingthem.
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Conclusion
CreditUnionsas a whole have challengesforitinthe yearsahead. The opportunities
are exponential forthose whocapitalize onthem. Organizationsthatoptimize their
talentandunderstandwhatittakesto engage them, will findthemselvesinaposition
of power– bothto attract andretainthe top talent.
Continuousmonitoringof employee engagementandwhatdrivesengagementbothin
the industryas a whole andat an organizational levelwillhelpkeepthesefirms
competitivewhere theyneedtobe. Byimplementingstrategiestoaddressthe
emergingHRtrendsin the market, like the onesidentified, firmsinthe industrywill be
able to winat leasta few battlesinthe warfor talent,andas a result, attract and
retaintopperformingstaff who continuously contribute totheirpositive business
outcomes.