How to Build Employee Loyalty for Life

Seventy percent of American workers are either emotionally disconnected or are actively seeking to hurt their companies, costing half a billion dollars in lost productivity, according to Gallup research.1 Top executives cite employee engagement as a top concern. Seventy-nine percent of 2,500 executives surveyed by Deloitte rate employee retention and engagement as an important or […]

IF YOUR EMPLOYEES DON’T PUT FORTH THEIR BEST EFFORT, EVERYTHING SUFFERS: THE QUALITY OF THE WORK; CUSTOMER SATISFACTION; COMPETITIVE POSITION; THE ABILITY TO RECRUIT AND RETAIN NEW PEOPLE.

Seventy percent of American workers are either emotionally disconnected or are actively seeking to hurt their companies, costing half a billion dollars in lost productivity, according to Gallup research.1 Top executives cite employee engagement as a top concern. Seventy-nine percent of 2,500 executives surveyed by Deloitte rate employee retention and engagement as an important or urgent management issue.2

Experts say that employee engagement is not a strategy but a set of principles that, when applied, effectively make organizations better places to work – and more profitable.

We gathered a panel of experts to talk about ways that organizations can improve employee engagement.

  • Josh Bersin, principal and founder of Bersin by Deloitte
  • Steven T. Hunt, vice president, Customer Research, SuccessFactors, an SAP company, and the author of Common Sense Talent Management
  • Karie Willyerd, vice president, Learning and Social Adoption, SuccessFactors, an SAP company, and coauthor of 2020 Workplace: How Innovative Companies Attract, Develop, and Keep Tomorrow’s Employees Today

How should leaders think about employee engagement?

Steven Hunt: Employee engagement starts with some basic fundamentals related to respecting the contributions employees make to the company. As an employee, I may be giving you eight or more hours a day from How to Build Employee Loyalty for Life_Page_2_Image_0004my life. Have you clearly defined what you want me to do? Have you given me the tools and freedom so that I can do it? Are you setting me up with the resources I need to be successful? Do you recognize and reward me based on the contributions I make?

Karie Willyerd: I would argue that what most companies actually want is to build a relationship with a person for life, whether that’s as an employee, a customer, a partner, or an advocate. The financial services companies and consulting services companies really get this right. Because that’s kind of their policy: come in, spend a few years, and go on out. And when people move on, they want to maintain a relationship with the firm. They want to think through the results of the experience and how they can stay connected with the people.

How do you measure engagement in ways that go beyond the traditional surveys?

Josh Bersin: A factor driving the rising importance of engagement in the minds of executives is the enormous amount of transparency in their workforce. So many social tools have been unleashed, both by employers as branding and recruiting tools and by employees as ways to share their experiences. If you’re a software engineer in the San Francisco Bay Area and you don’t like where you work, you can pretty much tell everybody how you feel, if you choose to do that. The employer can find these signals pretty easily if it wants to.

There’s also a flurry of start-up vendors that have built tools to gauge employee happiness, wellness, and satisfaction on a daily basis to try to figure out what employers can do to make work more fun.

Willyerd: One of the ways you can tell if people are engaged is if they are progressing in their careers. Are they moving up in the same function or cross-functionally? How much actual internal movement is there in the company? Having some data to analyze can be really helpful.

When an organization complains about having siloes, I always wonder what their level of employee engagement looks like. If the employees are engaged, they care about the company being successful, so they are not as protective of their territory and they will reach out more.

Another thing to look at is attrition. It’s healthy to have some attrition. What you don’t want is to have a 6% attrition rate and two-thirds of it is from your high-potential people.

Hunt: Companies that use technology effectively can train managers in how to keep employees engaged. For example, you can have automated reminders to prompt managers to talk to employees about goals, set clear goals, and have regular conversations about career development. And you can train managers in how to engage employees in discussions about their work, such as how to give feedback in ways that motivate people without making them feel mistreated.

measuring tape

With people staying in the workforce longer and the Millennial generation rising, how do organizations build an inclusive culture?

Willyerd: We ran a global survey of 2,200 working professionals, asking them about what they want from their next job. One of the questions was: how do you prefer to learn? We found that Generation Xers, seniors, and Baby Boomers like to learn in the classroom, but Millennials prefer to work with a mentor or a coach. I think you can take what Millennials like in learning and apply that to what they want from the employee experience, which is more personalization. Can I have a set of flexible benefits that allow me to pick and choose what I need? Can I arrange my work schedule and working arrangement to match my life? If we can build in mass flexibility and personalization, we are taking one big step toward building an inclusive culture.

Bersin: About 75% of companies believe they are diverse. But when you actually look at their practices internally, only 11% are truly what we would call inclusive. There are very few nondiverse populations in the world anymore. Say you’re a retailer and you sell food to a Hispanic population. If you don’t have people in your company who understand buying patterns in that community, you’re not going to be able to reach the community. This is a business issue, not just a compliance issue.

Hunt: Research suggests that one of the keys to overcoming a lack of diversity is to clearly define hiring criteria and follow well-defined assessment methods. Most of our bias lives in our gut, so if you rely on gut instinct without a lot of analytical input, you are likely to favor some demographic groups over others.

stretch

How does the need for flexible work arrangements fit into this picture?

Bersin: The research shows that flexible work environments, such as being able to work at home or to schedule time off when you need it, have a very high impact on satisfaction, retention, and productivity. Manufacturing workers in their 50s, 60s, and 70s may have challenges – such as poor eyesight or a need to sit more often – that younger workers don’t have. So some manufacturers have been changing their working conditions to accommodate such needs. Flexibility has a big impact on retention.

Willyerd: American Express set up a flexible work arrangement both for the Baby Boomers who were getting ready to retire and for the Millennials who were coming in. To the Baby Boomers it said, “If you’d like to start to transition to part-time employment at the end of your career, and if you agree to create some courses on COBOL and mentor some of the new people coming in, we’ll let you do part-time or periodic employment.” The arrangement benefited the Millennials’ need for mentors and coaches and the Boomers’ desire for part-time work. That was a clever approach to meeting the needs of two generations at the same time.

Hunt: Another example is CVS. It found that a lot of pharmacists were retiring and becoming snowbirds, spending half their time in Florida. So the company said, “Our customer base is doing the same thing, so why don’t we ask those pharmacists to work part time in one of our Florida stores, and when they come back up north, they can work part time in other stores?” They could migrate with the customers. The company shifted from thinking about these jobs as being attached to specific stores to saying, “It’s about getting talent in the right place to serve our customers.”

“If we can build in mass flexibility and personalization, we are taking one big step toward building an inclusive culture”

– Karie Willyerd, vice president for Learning and Social Adoption at SuccessFactors
office preparedness

There’s More.

TO LEARN MORE, DOWNLOAD THE IN-DEPTH REPORT HOW TO FIX THE CRISIS IN EMPLOYEE ENGAGEMENT.

The SAP Center for Business Insight is a program that supports the discovery and development of new research-based thinking to address the challenges of business and technology executives.

  1. Ed O’Boyle and Jim Harter, State of the American Workplace (Gallup, 2013), http://www.gallucom/strategicconsulting/163007/state-american-workplace.aspx.
  1. Tom Hodson, Jeff Schwartz, Ardie van Berkel, and Ian Winstrom Otten, Global Human Capital Trends 2014 (Deloitte University Press, 2014), 98, http://dupress.com/wp-content/uploads/2014/04/GlobalHumanCapitalTrends_2014.pdf.

About the author:

Josh Bersin is principal and founder of Bersin by Deloitte.

Steven T. Hunt is vice president of Customer Research at SuccessFactors, an SAP company, and the author of "Common Sense Talent Management".

Karie Willyerd is vice president for Learning and Social Adoption at SuccessFactors, an SAP company, and coauthor of "2020 Workplace: How Innovative Companies Attract, Develop, and Keep Tomorrow’s Employees Today."

Michael S. Goldberg is an independent writer and editor focusing on management and technology issues.

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#feature, Engage and Empower Employees