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Economic Recovery: Restoring, Rebuilding and Re-engaging
What's more, many experts think there will be a workplace "hangover" even when the economy bounces back. Many overworked, dissatisfied employees may be simply waiting for a healthier economic climate before they act on feelings of dissatisfaction and move elsewhere.
Of course, the good news is that many signs point to an economic recovery in 2010. And as the recovery gains momentum, smart organizations will turn their attention to restoring a high performance culture within their company, rebuilding their workforce, and re-engaging their people.
Restoring a High Performance Culture
Restoring your pre-recession culture entails a wide array of strategies. To begin with, you should provide the structure to enable success, for example by benchmarking progress toward key objectives. Seek out, recognize and leverage the talent and diversity in your workforce. Establish accountability, while at the same time rewarding performance-based success. Also, encourage risk-taking and innovation, even though—or because—the recession may have discouraged such values.
It is also critical to do an effective job of performance management. In fact, according to a 2002 Corporate Leadership Council (CLC) study of over 41,000 employees and managers, four of the nine drivers of employee performance are linked directly to effectively executing the performance management process. The four include:
According to Jim Thomson, VP Human Resources Operations for Ceridian Canada, "The single most effective driver of individual employee performance is fair and accurate informal feedback. By this we mean the day-to-day guidance from the manager, and the two-way communication and interaction with employees. Having managers who are comfortable and good at delivering feedback in this manner will grow their credibility with employees and build a high performance workplace."
Restoring your high performance culture in this way will ensure a recovery for your organization that mirrors the recovery of the economy.
Rebuilding Your Workforce
According to a July 2009 CLC report titled "Rebuilding the Employee Value Proposition", intent-to-stay among high potential employees has dropped by 21% between Q4 2008 and the first half of 2009. It also indicates that the percentage of disengaged employees actively seeking employment has decreased 46% over the past three years; in other words, the disengaged are staying put.
Clearly, as organizations restore their culture, they must also rebuild their talent base by attracting and retaining the right people. The recession has done little to affect strategies for attracting talent, and the five most important attributes for achieving this have remained the same since 2006:
Similarly, many companies see the Employee Value Proposition as the guiding principle for attraction and retention. The EVP is a set of attributes that the labour market and employees perceive as the value they gain through employment with a particular organization. According to the CLC, those attributes fall under the categories of rewards, opportunity, organization, work and people.
Ceridian's Thomson underlines the significance of compensation: "As the economy recovers, don't underestimate the importance of compensation to retain your key employees. Passive recruiting—that is, head hunters actively targeting your key employees—has increased significantly. And now your most loyal employees are returning the head-hunters' calls, perhaps because they're burned out from work overload that resulted from downsizing, or because their compensation or other programs were cut during the recession. You may have cut back on all expenses, but this is one area where the purse strings may have to be opened."
Also, organizations attract talent by focusing on becoming "employee magnets". They achieve this by aligning their leadership, employees and culture, and by ensuring their brand is authentic, unique, compelling and relevant. They do everything possible to ensure that the right people hold them in esteem, thereby attracting top prospects.
Other strategies help in retaining talent once it is acquired. Successful companies focus on the top 5% of their performers and make talent management of this valued group a priority. They put key talent in critical positions, develop them actively through targeted development plans, and compensate them generously. At the same time, they don't neglect the next 10-15%; these are individuals who must be developed and retained as successors to the top performers. Neither do successful organizations neglect any level of their workforce. These companies know who their "keepers" are at all levels; they recognize the importance of their "bench strength" and understand that every successful team is made up of more than just the "stars".
Re-engaging Your Most Valuable Asset
Along with restoring your culture and rebuilding your workforce, it is critical to re-engage your employees. Engagement has been defined as the measure of an employee's emotional and intellectual commitment to an organization. Pre-recession studies indicated that a minority of workers were engaged and the majority were either not engaged or were actively disengaged, and the outlook can only have gotten worse during the recent downturn.
It's clear that re-engagement is critical for organizations that hope to ride the rising tide of recovery. Re-engagement is directly related to performance and the bottom line of a company. After all, productivity depends on the time an individual is physically and mentally present, and studies have shown that employees who are most committed perform 20% better and are 87% less likely to leave organizations.
The numbers from a 2006 ISR survey illustrate the effect of engagement on performance:
For example, according to Ceridian's Thomson, "Employee engagement has a direct and positive correlation with our company's year-over-year revenue growth. As Ceridian Canada's ranking as a Best Employer goes—so goes our revenue growth."
How do you re-energize and re-engage your employees? While compensation is a key to attraction, it is not a driver of engagement. According to the CLC, the top five keys to engagement are: job interest alignment, manager quality, co-worker quality, people management, and respect. Within this framework, re-engagement occurs when companies set stability expectations, as opposed to promising stability. The re-establishment of networks fuels engagement and productivity. Many of the five keys are made possible by allowing employees more flexibility in selecting their work and choosing roles, thereby creating a closer match with their interests. Also, helping individuals develop greater career self-reliance helps them overcome organizational barriers, resulting in a re-engaged employee.
As the economic recovery gains momentum throughout 2010, businesses that neglect their own recovery will experience no more success than they did last year. It's organizations that pay attention to restoring, rebuilding and re-engaging that will experience true recovery.
Please also take a minute to tell us what you think about this article.
In response to the economic downturn of 2009, businesses adopted many strategies to weather the economic storm. Unfortunately, many negatively affected their most valuable asset: their employees. Businesses cut back or halted hiring, instituted mandatory or voluntary salary freezes or cuts, and slashed training budgets. Workforces were down-sized, investment in people-related programs shrank, performance and development plans were neglected, and reward and recognition programs were reduced. People are a company's most valuable asset, but businesses were forced to cash in their human capital for short term dividends.
Whatever short-term benefits these measures generated, they also created a serious threat to long-term prosperity by negatively affecting corporate cultures and employees. Not surprisingly, workers suffered and organizations experienced a lowering of creativity, innovative thinking, loyalty, morale, health and wellness, and work/life balance. Some even suspect that a recent spate of class-action lawsuits claiming unpaid overtime was triggered by this changing landscape.
Managers were not exempt from these pressures. In addition to working the same longer hours and feeling the same anxiety and uncertainty as other employees, they had the additional responsibility of maintaining the morale and enthusiasm of their staff.
A Sign of Recessionary Times: Year-over-year (Jan '08 - '09) increase in calls to Ceridian Canada's LifeWorks Employee Assistance Program:
- general calls: 10%
- financial information requests: 65%
- workplace change: 31%
- bankruptcy related: 60%
What's more, many experts think there will be a workplace "hangover" even when the economy bounces back. Many overworked, dissatisfied employees may be simply waiting for a healthier economic climate before they act on feelings of dissatisfaction and move elsewhere.
Of course, the good news is that many signs point to an economic recovery in 2010. And as the recovery gains momentum, smart organizations will turn their attention to restoring a high performance culture within their company, rebuilding their workforce, and re-engaging their people.
Restoring a High Performance Culture
Restoring your pre-recession culture entails a wide array of strategies. To begin with, you should provide the structure to enable success, for example by benchmarking progress toward key objectives. Seek out, recognize and leverage the talent and diversity in your workforce. Establish accountability, while at the same time rewarding performance-based success. Also, encourage risk-taking and innovation, even though—or because—the recession may have discouraged such values.
It is also critical to do an effective job of performance management. In fact, according to a 2002 Corporate Leadership Council (CLC) study of over 41,000 employees and managers, four of the nine drivers of employee performance are linked directly to effectively executing the performance management process. The four include:
- Fairness and accuracy of informal feedback
- Emphasis in formal review on performance strengths
- Employee understanding of performance standards
- Feedback that helps employees do their jobs better
According to Jim Thomson, VP Human Resources Operations for Ceridian Canada, "The single most effective driver of individual employee performance is fair and accurate informal feedback. By this we mean the day-to-day guidance from the manager, and the two-way communication and interaction with employees. Having managers who are comfortable and good at delivering feedback in this manner will grow their credibility with employees and build a high performance workplace."
Restoring your high performance culture in this way will ensure a recovery for your organization that mirrors the recovery of the economy.
Rebuilding Your Workforce
According to a July 2009 CLC report titled "Rebuilding the Employee Value Proposition", intent-to-stay among high potential employees has dropped by 21% between Q4 2008 and the first half of 2009. It also indicates that the percentage of disengaged employees actively seeking employment has decreased 46% over the past three years; in other words, the disengaged are staying put.
Clearly, as organizations restore their culture, they must also rebuild their talent base by attracting and retaining the right people. The recession has done little to affect strategies for attracting talent, and the five most important attributes for achieving this have remained the same since 2006:
- Compensation
- Future career opportunities
- Work-life balance
- Development opportunities
- Stability
Similarly, many companies see the Employee Value Proposition as the guiding principle for attraction and retention. The EVP is a set of attributes that the labour market and employees perceive as the value they gain through employment with a particular organization. According to the CLC, those attributes fall under the categories of rewards, opportunity, organization, work and people.
Ceridian's Thomson underlines the significance of compensation: "As the economy recovers, don't underestimate the importance of compensation to retain your key employees. Passive recruiting—that is, head hunters actively targeting your key employees—has increased significantly. And now your most loyal employees are returning the head-hunters' calls, perhaps because they're burned out from work overload that resulted from downsizing, or because their compensation or other programs were cut during the recession. You may have cut back on all expenses, but this is one area where the purse strings may have to be opened."
Also, organizations attract talent by focusing on becoming "employee magnets". They achieve this by aligning their leadership, employees and culture, and by ensuring their brand is authentic, unique, compelling and relevant. They do everything possible to ensure that the right people hold them in esteem, thereby attracting top prospects.
Other strategies help in retaining talent once it is acquired. Successful companies focus on the top 5% of their performers and make talent management of this valued group a priority. They put key talent in critical positions, develop them actively through targeted development plans, and compensate them generously. At the same time, they don't neglect the next 10-15%; these are individuals who must be developed and retained as successors to the top performers. Neither do successful organizations neglect any level of their workforce. These companies know who their "keepers" are at all levels; they recognize the importance of their "bench strength" and understand that every successful team is made up of more than just the "stars".
Re-engaging Your Most Valuable Asset
Along with restoring your culture and rebuilding your workforce, it is critical to re-engage your employees. Engagement has been defined as the measure of an employee's emotional and intellectual commitment to an organization. Pre-recession studies indicated that a minority of workers were engaged and the majority were either not engaged or were actively disengaged, and the outlook can only have gotten worse during the recent downturn.
It's clear that re-engagement is critical for organizations that hope to ride the rising tide of recovery. Re-engagement is directly related to performance and the bottom line of a company. After all, productivity depends on the time an individual is physically and mentally present, and studies have shown that employees who are most committed perform 20% better and are 87% less likely to leave organizations.
The numbers from a 2006 ISR survey illustrate the effect of engagement on performance:
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For example, according to Ceridian's Thomson, "Employee engagement has a direct and positive correlation with our company's year-over-year revenue growth. As Ceridian Canada's ranking as a Best Employer goes—so goes our revenue growth."
How do you re-energize and re-engage your employees? While compensation is a key to attraction, it is not a driver of engagement. According to the CLC, the top five keys to engagement are: job interest alignment, manager quality, co-worker quality, people management, and respect. Within this framework, re-engagement occurs when companies set stability expectations, as opposed to promising stability. The re-establishment of networks fuels engagement and productivity. Many of the five keys are made possible by allowing employees more flexibility in selecting their work and choosing roles, thereby creating a closer match with their interests. Also, helping individuals develop greater career self-reliance helps them overcome organizational barriers, resulting in a re-engaged employee.
As the economic recovery gains momentum throughout 2010, businesses that neglect their own recovery will experience no more success than they did last year. It's organizations that pay attention to restoring, rebuilding and re-engaging that will experience true recovery.
Please also take a minute to tell us what you think about this article.
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