© 2007 towers perrin does being a top employer make a difference in employee engagement? how - and...
TRANSCRIPT
© 2007 Towers Perrin
Does being a Top Employer make a difference in employee engagement?
How - And Why - Top Employers
Are Building An Oasis for Talent
Canada’s Top Employers
March 22-23, 2007
© 2007 Towers Perrin 2
Why are we all here?
A. Public recognition of workplace excellence
B. Because the CEO said it was important
C.Because people make the difference between success and failure
© 2007 Towers Perrin 3
Why be on the list?
Easier to attract good candidates
Management and shareholder recognition of what your HR programs are all about
Shows your current and future employees the kind of workplace you want to be or become
A visible sign that helps shape your reputation as a good employer
Recognition that your internal employment deal supports your external customer brand
© 2007 Towers Perrin 4
Why CEOs are placing Talent Management front and centre
A global playing field is heightening competition for business and talent
The competition for leadership talent among top companies has intensified, and companies are looking at new ways to attract and retain top talent
“People-driven” enterprises are setting themselves apart in terms of overall business performance
While the world’s population will continue to grow, demographic projections point to a coming skills shortage in such areas as management, customer service and research
© 2007 Towers Perrin 5
Organizations have identified critical gaps — in retaining current leaders and growing future leaders
32%
41%
13%
38%
54%
47%
53%
29%
34%
39%
42%
46%
47%
70%
0% 20% 40% 60% 80% 100%
Developing existing leadership talent
Attracting the right leadership talent
Retaining the right leadership talent
Engaging leadership talent
Identifying existing leadership talent
Deploying existing leadership talent
Lack of leadership capability at senior levels
Leadership Talent Management Challenges — Current and Future
Source: 2006 Towers Perrin Talent Management Survey
Future challenge
Current challenge
© 2007 Towers Perrin 6
The world in numbers…
6.0
6.5
7.0
7.5
8.0
8.5
9.0
2006 2020 2030
World Population % in Developed World
Billions of PeoplePercentage in
Developed World
19%
18%
17%
16%
15%
14%
13%
© 2007 Towers Perrin 7
People systems and programs
Employeebehaviour
Customerbehaviour
Financial performance
Engagement Values Customer
service Productivity/
operational Adaptability Retention Learning
Customer satisfaction
Customer loyalty Customer value
ROI Revenue growth Net earnings Stock
performance
Staffing Compensation Benefits People
development Workforce
relations Organizational
management Work
environment
Leading organizations make the critical link between people, programs and results
“People systems” should start from and support the organization’s specific performance goals
© 2007 Towers Perrin 8
Towers Perrin and Canada’s Top 100 share the view that:
Employee engagement is a fundamental metric of company “health” and of the day-to-day work experience
Including such a measure as part of the overall assessment of a company as a place to work makes great sense
Towers Perrin has a well-tested (externally validated) and relatively simple model for measuring engagement
© 2007 Towers Perrin 9
Understanding what engagement means, how it’s measured and what drives it
We define engagement as employees’ willingness and ability to contribute to company success, in large part by delivering discretionary effort on a sustained basis
We measure it using nine items that capture employees’ emotional and rational connections to work Respondents’ scores across all nine items determine their
level of engagement: high, moderate or low
We derive the drivers of engagement — the elements of the work environment that influence it — via statistical analysis
Employees’ level of engagement
Workplace elements thatdrive engagement
up...or down
Emotional and rationalconnections to work
© 2007 Towers Perrin 10
Employee engagement is critical in driving the way people behave at work
85%
45%
66%
0% 20% 40% 60% 80% 100%
74%
38%
56%
0% 20% 40% 60% 80%
53%
16%
29%
0% 10% 20% 30% 40% 50% 60%
46%
14%
25%
0% 10% 20% 30% 40% 50%
64%
39%
22%
0% 10% 20% 30% 40% 50% 60% 70%
I can positively impact quality I can positively impact costs
I can positively impact customer service I can positively impact overall profitability
I can positively impact revenue growth
DisengagedModerately EngagedHighly Engaged
Key:
Source: Towers Perrin Global Workforce Study: Canada
© 2007 Towers Perrin 11
More engaged employees are more likely to stay with the organization
Highly Engaged DisengagedModerately Engaged
8%
1%2%
63%
26%
No plans to leaveNot looking, but would consider another offerActively looking for another jobMade plans to leave current jobPlan to retire in the next few years
12%
9%
29%
12%
38%
10%3%
9% 30%
48%
(Canadian data)
Source: Towers Perrin Global Workforce Study: Canada
© 2007 Towers Perrin 12
Operating Margin With 5%, 10%, 15% Change in Engagement
% Change in People Engagement
Current
11.4%
5%
11.8%
10%
12.2%
15%
12.6%
For a $3B company, that’s $24,000,000*
Source: Towers Perrin 2003 Talent Report. Financials are illustrative and do not represent any specific company
10%
14%
18%
22%
26%
30%
LOW HIGHEngagement Index Score
Revenue Growth
Engagement Index Score62%
64%
66%
68%
70%
72%
74%
LOW HIGH
Cost of Goods Sold
SG&A
Note: Employee engagement strongly correlated to intention to stay.
Intent to Stay19%
21%
23%
25%
27%
LOW HIGH
Employee engagement and financial performance are highly correlated
© 2007 Towers Perrin 13
The Top 100 Employers Pilot Engagement Survey - 2006
Six organizations volunteered to join us for the pilot
From these organizations, we gathered 1,667 employee responses
As a benefit of participation, each organization received a report of their individual results
Aggregate results were not released…until now
© 2007 Towers Perrin 14
How did they do?
Canada Workforce Top 100 Applicants (Pilot)
High (17%)Disengaged (17%)
Moderate (66%)
High (36%)Disengaged (6%)
Moderate (58%)
© 2007 Towers Perrin 15
What Drives Engagement in Canada? Canada Workforce vs. Top Employers Pilot 2006
Top 100 Employers Pilot SurveyCanada Workforce Study
67%
85%
80%
71%
72%
46%
87%
72%
73%
39%
79%
56%
60%
59%
39%
70%
61%
67%
61%76%
0% 20% 40% 60% 80% 100%
Senior management interest in employee well-being
Improved my skills and capabilities over the last year
Reputation of the organization as a good employer
Input into decision-making in my department
Opportunities to learn and develop new skills
Salary determination fair and consistent
Organization focus on customer satisfaction
Appropriate amount of decision-making authority
Employees understand what it takes to satisfy customers
In combination with government programs, my benefits meet my needs
Favourable Score:
© 2007 Towers Perrin 16
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
High Favourability – Higher Impact on
Engagement
Strength of relationship between item and Employee Engagement
% F
avo
ura
ble
Prioritizing by relationship to engagement
High Favourability – Lower Impact on
Engagement
15
28
25
Item
15. Improved my skills and capabilities
28. Reputation as a good employer
21. Salary determination is fair and consistent
10. Senior management has a sincere interest in employees
18. Appropriate amount of decision making authority to do my job
25. Retaining employees with the skills needed for the organization to succeed
39. I have excellent career opportunities at this organization
41. In combination with government programs, my benefits meet my needs
10 39
18
INCREASING
Low Favourability – Higher Impact on
Engagement
Low Favourability – Lower Impact on
Engagement
41
21
Best Practice: Diagnosing Engagement
© 2007 Towers Perrin 17
Build workforce plans that align with the long-term business growth strategy
Workforce required to
execute business plan
Workforce currently in place and available in
the market
Workforce Demand Workforce Supply
AttractionEngagement
Retention
Sourcing, deployment, people processes/programs
1
2
3Identify key drivers to ensure workforce supply and desired behaviours
4Align talent strategy and optimize processes / programs
Analyze business plans to understand
required workforce
Identify potential workforce gaps
Business plan and required capabilities
Best Practice: Strategic Workforce Planning
© 2007 Towers Perrin 18
Decrease
Increase
Impact on Cost
Impact onEmployee
Engagement
Cost/Benefit Scenarios
Decrease
Current State:No change to
investment; Current employee
engagement
IncreaseA
B
C
Understand employee preferences to “optimize” ROI on your total rewards
KEY
A) Optimal cost savings: The reward mix that maximizes cost reduction with a neutral impact on employee engagement
B) Optimal reallocation of current investment: The reward mix that reallocates the current total spend across programs in a way that maximizes employee engagementC) Optimal investment: The reward mix beyond which there are diminishing returns in employee engagement
ILLUSTRATIVE
Best Practice: Optimizing rewards
© 2007 Towers Perrin 19
Learning & Development Programs
Career Management Resource Centre
Career Ladders/Competency Models
PerformanceManagement
ProcessPeer Mentoring Network
Define career models, clarify paths and calibrate rewards
Best Practice: Improving career framework
© 2007 Towers Perrin 20
To truly influence engagement (and workforce effectiveness) you need a holistic approach
© 2007 Towers Perrin 21
Sustaining a Top 100 Culture
Employee engagement is rapidly emerging as a key indicator of business performance
Leading organizations will use engagement metrics, including performance relative to key drivers, as a roadmap for action
The road will curve as the drivers of engagement change over time
Top employers will keep ahead of the curve by paying close attention to the evolving needs of their employees
© 2007 Towers Perrin 22
Questions?
Kevin Aselstine [email protected] (416) 960-2712
Charlie Watts [email protected] (617) 638-3942