Strengthening Employee Relationships in the Digital Era

with Jon Cifuentes and Brian Solis

A Market Overview Report

December 16, 2014

By Charlene Li

Includes input from 44 ecosystem contributors

How Digital Employee Engagement and Advocacy Transform Organizations

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Executive Summary

Employees are disengaged at work, and organizations have been exploring how social and digital technologies can address this problem. But Altimeter found that only 41% of organizations believe they take a strategic approach to employee engagement, while only 43% believe they have an organizational culture of trust and empowerment. Our research found that leading organizations with strong digital employee engagement take a page out of marketing’s deep expertise around digital customer engagement and apply it inside the organization by injecting marketing expertise, practices, and technologies into its practices. The end result: These organizations drive business impact and cultural change through their employees.

RESEARCH HIGHLIGHTS• Most organizations don’t have a coherent employee engagement strategy — only 41% of organizations believe they

have a holistic and strategic approach to employee engagement and advocacy.

• Authentic employee engagement only happens when there is trust in the relationship — only 43% of survey respondents believe they have an organizational culture of trust that supports employee engagement.

• Part of the problem is that there is no natural owner of employee engagement. In 41% of organizations, HR leads employee engagement efforts, while 17% and 11% have Employee/Corporate Communications and Marketing leading efforts, respectively.

• There remains significant untapped opportunity to use digital tools to enhance employee engagement. Only 36% and 25% of respondents have organizations where many employees use their internal collaboration platform and enterprise social network, respectively.

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Executive Summary ..................................................................................................................................................................................

The Dismal State of Employee Engagement and Advocacy .............................................................................

Defining Digital Employee Engagement ..........................................................................................................................

Leveraging Employee Engagement to Drive Business Impact ...............................................................

The Transformational Power of Employee Engagement ...............................................................................

Conclusion ..........................................................................................................................................................................................................

Endnotes ................................................................................................................................................................................................................

Table of Contents

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THE DISMAL STATE OF EMPLOYEE ENGAGEMENT AND ADVOCACY

Gallup reported that worldwide only 13% of employees are engaged at work, while it rises to 30% in the US.1 And this number has barely budged over the past decade, despite advances in digital tools designed to engage workers. A new generation of enterprise social networks and employee advocacy platforms promised a new approach, but to date they still struggle to connect activities to the creation of business value. Altimeter published a report on the value of enterprise social networks in 2012 and we wanted to follow up and learn what impact digital and social technologies can have on employee engagement.2

In the course of our research, we interviewed 12 organizations, 14 thought leaders, and 18 vendors, which provided vivid case studies and best practices into what organizations are doing today. We also conducted a survey of 114 people who are directly involved with the employee engagement and advocacy programs at their organizations. Lastly, we tapped data from a research study Altimeter conducted with LinkedIn that looked at how employee engagement drove business results at “socially-engaged” companies.

Organizations Struggle to Create Holistic Employee Engagement StrategiesFrom our survey of 114 organizations, we discovered three reasons why current digital employee engagement efforts stall and fail:

1. Most organizations lack a coherent strategic approach to digital employee engagement.

2. Digital technology deployments suffer from a lack of business focus and platform fatigue.

3. Measurement and evidence of business value remain anecdotal.

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Strengthening Employee Relationships in the Digital Era

A new generation of enterprise social networks and employee advocacy

platforms promised a new approach, but to date they

still struggle to connect activities to the creation of

business value.

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1. Most companies lack a coherent approach to digital employee engagement.One of the first questions we sought to answer was where employee engagement initiatives were taking place within organizations. We found that while 41% of companies had the HR department leading employee engagement initiatives, 17% and 11% were led by Employee/Corporate

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Communications and Marketing departments, respectively (see Figure 1a). And when asked what other departments were also involved, 58% said the Executive team and 36% said the Digital/Social team (see Figure 1b). Employee engagement has historically been seen as an HR function — but is now dispersed throughout the organization, often times with little or no involvement from HR at all.

FIGURE 1 EMPLOYEE ENGAGEMENT INITIATIVES EXIST THROUGHOUT ORGANIZATIONS

Sales

Marketing

Customer Support

HR

All Others

IT

Employee/Corporate

Communications

Corporate Strategy

3%

11%

1%

41%

22%

1%

17%

3%

ExecutiveTeam

SalesMarketing CustomerSupport

CorporateStrategy

Emplyee/Corporate

Communications

HR ITOperationsDigital/SocialTeam

Other

58%51% 47%

39% 36%

23% 22% 20% 19%16%

12%

100

75

50

25

0

Figure 1a: “Which department leads Employee Engagement Initiatives in your organization?”

Figure 1b: “What other departments are involved in Employee Engagement initiatives in your organization? (Select all that apply.)”

Base: 88 companies with more than 250 employees (surveyed by Altimeter Group Q3 2014) Source: Altimeter Group

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To download this report in full at no cost, please visit our website at:

http://pages.altimetergroup.com/strengthening-employee-relationships-report.html

About UsCharlene Li, Founder and CEO, AnalystCharlene Li (@charleneli) is Founder and CEO of Altimeter Group and author of the New York Times bestseller, Open Leadership. She is also the co-author of the critically acclaimed bestselling book, Groundswell, which was named one of the best business books in 2008. She is working on a new book on the digital transformation of leadership, to be published in March 2015 by Wharton Digital Press.

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Altimeter is a research and consulting firm that helps companies understand and act on technology disruption. We give business leaders the insight and confidence to help their companies thrive in the face of disruption. In addition to publishing research, Altimeter Group analysts speak and provide strategy consulting on trends in leadership, digital transformation, social business, data disruption and content marketing strategy.

Altimeter Group1875 S Grant St #680San Mateo, CA 94402

info@altimetergroup.comwww.altimetergroup.com@altimetergroup

650.212.2272

Jon Cifuentes, Senior ResearcherJon Cifuentes (@JonCifuentes) supports research in disruption on leadership, collaboration, organizational change, and analytics at Altimeter Group. In his previous work, Jon led social media efforts for large-scale B2B and B2C organizations, with a focus on the measurement and optimization of engagement across all digital channels.

How to Work with Us Employee engagement spans a wide variety of departments, objectives, and technologies. In conjunction with our research, there are are several ways Altimeter can help with your employee engagement strategy:

• Executive Education and Workshops. A key factor in employee engagement success is the buy-in and active sponsorship of key executives. But all too often, they are unaware or threatened by new forms for digital employee empowerment. Altimeter frequently runs executive workshop that helps education these executives on how to think strategic about the use of new employee engagement platforms - and also how these executives need to personally get involved.

• Employee Engagement Audit. What is the state of employee engagement in your organization? This quantitative asessment of your digital employee engagement initiatives includes a scorecard and best practices recommendations.

• Employee Engagement Strategy. Develop and align engagement initiatives across the organization into a coherent strategy, with the Employee Digital Journey Map as the foundation for that journey. This includes organization development and governance to ensure that the strategy implementation is coordinated across the organization.

• Engagement Vendor Selection and Implementation Best Practices. Based on existing capabilities, employee engagement goals and strategy, and stated needs and requirements, Altimeter Group will suggest a short list of vendors/solutions. Also included are recommendations on how to support initiatives ranging from implementing an enterprise social network to social selling.

• Thought Leadership. We will present internally or externally-facing speeches or webinars on employee engagement for both organizations as well as vendors. We can also provide written thought leadership that adheres, as long as it adheres to our research and objectivity standards.

To learn more about Altimeter’s offerings, contact sales@altimetergroup.com

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