If I was told ten years back that I would be writing articles on the ROI of anything, I would have been laughing hysterically. Primarily because I was never interested in finance, or numbers, or anything which had anything to do with an equation of any sort.
My professional concerns were centered around the L&D (Learning and Development) process. How to get employees to absorb more, go through paradigm shifts, and how to align them with corporate strategy through their skill development. In all fairness, this is what most L&D professionals do. We train. We advise. We find ways to make the transfer and retention of information really stick. We play with sticky tack putty while contemplating which multisensory act of edutainment we’re going to commit next. We toil over how much humour is just enough and how much is too much to inject into our classes to keep the content just ‘serious enough’. Many of us put on a pretty good show, just to keep delegates checking the right boxes on the happy sheets they have to fill out on their way out the door, without actually taking into account the individual’s capacity for development, their role, the unique challenges they face, leave alone the relationships they are making or breaking in a corporate environment whose culture they may or may not suit. What happens before and after a delegate enters and leaves the training room can be a mystery if left unmeasured. In fact, most of these efforts are disjointed with actual development needs and nowhere close to aligned with the actual corporate strategy.
After transitioning to providing strategic consultancy, and getting the chance to view employee engagement and talent management from yet a few more lenses across many more industries, I have a startling revelation to share: not much changed in terms of how firms approach or even understand Employee Engagement. Not much changed in terms of how anyone was calculating effectiveness either. Metrics were always fuzzy at best, because these are not sales figures we’re talking about (or, are they? *sly grin*).
It’s more or less the same one-size-fits-most approach across a number of firms: Bonus, increment, occasional pat on back, newsletter, annual gala dinner, a branded t-shirt and mug, and voila…Engaged Employee! If only it was that easy. What did we spend? What did we gain? Oh tell me again why calculating this ROI is something most companies struggle with? Just like a puzzle has many pieces to form a picture in its completion, so does engagement. Let’s put the puzzle pieces away and just paint this picture together, shall we? Starting with the background.
Most of our management end up being recruited for their industry knowledge or technical expertise, instead of for ‘the ability to engage staff through concerted effort and meaningful dialogues’. In fact, Employee Interaction, much less Engagement rarely makes in onto their Job Description and as a result, many senior managers barely interact with their people. The paradigm shift many managers need to take here is to realise how much of their own success is driven by their people, and how much more successful they could be if only they knew how to provide the vehicle for their people to drive success through the roof. Although every leadership course begins with the quintessential brainstorm which involves separating leadership traits from management traits, we still don’t actually ‘get’ that the engagement process takes far more than to label ourselves as an ‘equal opportunity employer’ on the recruitment page of the corporate website. It takes far more than an ‘open door policy’ or a monthly newsletter to staff. Most firms don’t have staff or departments dedicated to engagement (it’s usually combined with the Marketing Department’s remit), nor do we take the time to equip our line management with the skills required to truly ‘engage’ (not to be confused with ‘motivate’) their direct reports.
Most of our CFOs see the excessive attempts to spend on employee activities as ‘useless spending’ which – in all fairness, it could very well be especially when done aimlessly to just blow a few whistles and pat a few backs. I won’t tell you much more of what it doesn’t take because I’m certain you can come up with a list of what’s not working within your own organisation versus what is. All im here to propose is that there may be a few things to add to the list of things that get you actual results. All it really takes is the guts to bring these to the boardroom as the next hot topic (after of course, discussing the Rugby Sevens, or who got wasted and did something ridiculous at the last corporate event). What I’m saying here, is:
Let the business strategy drive your messaging, your decision making, your talent management strategy, and most certainly your learning and communications strategies. It’s unlikely the bells and whistles will lead to any tangible improvements unless and until leadership training, corporate events, communications, and rewards schemes are:
- aligned to strategy
- fit for purpose
- have a meaningful message to convey
- are tied to meritocratic performance management standards
These few requirements alone will help you to ensure your spending is strategic in nature and that you’re ticking more boxes than just having a good party.
Onboarding is key to proactive employee engagement, yet most firms fail to engage employees from the beginning. This is a golden opportunity for most employers, and yet, we blow it ever so often. The first impression is definitely a lasting impression, and most employees show up to their first day of work in a new firm with a fresh perspective, and a sponge-like sense of retention for the new material, new faces, and new names they have psyched themselves up for encountering. What tends to happen, especially with those nervously entering entry level or mid career level roles (which is often 80% of the organisation) is that they are self consciously concerned with putting their best foot forward.
Have you ever thought about what’s happening subconsciously though?
New hires are being impacted and forming judgements based on how they are received, how the internal branding might differ from the external branding, how solid the introductory training program is (if there is one at all), how friendly their first encounters with new colleagues have been, how quickly their office space is set up with the required technology, and whether or not this ‘onboarding process’ is actually being managed by a key contact person or whether they are tossed into the role and just given time to read through a pile of employee handbooks and policy manuals before they’re put to the sink or swim test of whether they can actually perform in the role. Companies who onboard well don’t just have their onboarding processes organised, they also provide staff with a who’s who directory or take them on visits to meet senior executives who have an opportunity to meet and greet new groups to incite increased comfort levels and ensure that senior management visibility is established as a company norm from the very beginning rather than leave such interactions to chance or to depend on the possibility of a rare walking-down-the-hallway sighting or an appearance at the quarterly town hall.
Measure, Measure, Measure! Whether you’ve decided to take any of the advice in this article to improve your engagement levels or not, the key to knowing how good or great your current efforts are, is through none other than measurement. Not only do you want to make sure you’re up to speed with an annual Employee Survey to measure loyalty, communications effectiveness, managerial styles, etc. year over year, but you also want to ensure that you’re paying attention to the metrics that may be indirectly associated with engagement, like absenteeism rates, health insurance expenditures, and turnover. Exit interviews are a great way to get information, although many employers don’t feel the need to go through the process, and you often have to filter out what has personally left a departing employee disgruntled before you can objectively use the rest of the information to feedback into revising the employee experience. We all know this can be more effort than an HR department is willing to output, especially those that operate with more of an administrative focus than a strategic focus.
The key to implementing these metrics is the intention and willingness to actually take action when one of your indicators points to a problem. Acknowledging and rectifying the issues brought to surface though employee surveys, for example, is what proves to employees that it’s worth actually filling out the survey, and moreover, worth hanging around for a longer ride, because as we all know, actions speak louder than words. Do keep a close eye on productivity statistics and sales figures, especially when working with specific groups on engagement. In fact, if your statistics are separated by department or segment, structure your changes to happen by department or segment so that you have comparative data with which to co-relate the outcomes of your efforts.
Once you know what’s working, (or not working) and have tangible evidence that your retention levels and productivity levels have improved, you can look at how much you’ve saved on turnover by calculating your typical cost of acquisition for new employees. Add that to your increase in productivity levels and revenues which have also likely increased from your engagement efforts, and there you have it: A workforce that performs as though you’ve added up to 25% more employees to your headcount, without all the extra headcount expenditures. Everyone wins, and the CFO is probably more likely to approve that just-for-fun employee event that was once ‘seemingly’ unjustified.