HR needs to connect with commercial: Report

by David Marin - Guzman, HR Report Thomson Reuters

Too few business are measuring the commercial return on their employee engagement strategies, and implementation is sufferring as a result, a new report has found.

The first Employee Engagement Capability Report 2011 by Shirlaws and RedBalloon, confronts unprecedented declines in employee engagement after a Hewitt global survey reported the largest decline in engagement in the survey's 15-year history. The Shirlaws/RedBalloon report says for businesses to overturn this commercial imperative - key performance indicators, budget and return on investment (ROI) - must be connected to its workplace culture - purpose, values and recognition - with a reward and recognition program supporting both.

The report argued one of the causes of low employee engagement was business not following up on employee engagement surveys with implementation plans - either because managers did not care or did not see it as essential to the business.

Co-author and RedBalloon Corporate account director James Wright said the report had found only one in ten businesses measured the commercial return on their employee engagement strategy. Wright argued that needed to change by linking HR attitudes to senior management goals.

"If you're spending money on something you don't know the return on investment (ROI) is you're going to be limited in terms of the buy-in you can create at a CEO level," he told HR Report. "Part of the reason is business hasn't developed the thinking. We're hoping this engagement capability data will provide a useful benchmark tool to gauge the ROI they will be getting."

Business capability key to engagement

 The report sets out an engagement capability framework of 20 common engagement activities businesses can measure against. By doing so, it argues, businesses can identify which areas they need to invest in to make a difference. The report's hypothesis is the higher a firm rates against this framework, the higher its employee engagement will be.

The most important area identified was culture and purpose - ensuring employees feel like "they are part of something bigger than themselves" by making the connection between business vision and daily workplace activities.

By making employees aware of business values through rewards and recognition schemes, the report found businesses would be three times more effective in increasing engagement.

Communication and effective meetings were also crucial, particularly in times of crisis.

"When times are tough and there are difficult decisions to be made, those businesses that kept their leaders visible and kept the story telling in the organisation were the ones that succeeded," report co-author and Shirlaws business coach Oliver Christen said. "Those that shied away from communicating anything but good news were the ones who had lost faith in their employees."

Wright agreed saying it was a sign of a highly engaged organisation when employers felt comfortable communicating to employees in times if uncertain. "It's okay for a leader not to know," he said.

When it came to employee training and development programs, the key was combining them with other business strategies.

"What's been fascinating to us in terms of results of the survey is every company, no matter how engaged they are, is spending money on training and development" Christen said.

"On the face of it training and development doesn't make a huge difference in terms of engagement. Once we mixed it with a few factors - such as a coaching program - what we found is that the result in terms of engagement capability was a lot higher. Which means we can get a lot more leverage out of the training dollar we spend."

And with some businesses still struggling with cuts to budgets, these additional measures are low-cost and highly effective. The report found highly engaged companies spent less than $1,000 per head on engaging staff.

Christen and Wright are holding workshops unpacking the results of the survey from 5 April to April 20. Melbourne is on April 7, Perth April 12, Sydney April 19, and Brisbane on April 20.

Further Information

James Wright, Corporate Account Director

RedBalloon

james@redballoon.com.au

8755 0020

http://www.redballoon.com.au/corporate

For interviews with James Wright, please contact Kate Rolfe on 02 8755 00347 or kate@redballoon.com.au

About RedBalloon Corporate

RedBalloon Corporate delivers fun, innovative, experience-based recognition programs. Services include Online Points Programs, Voucher Programs, Team building events and Corporate Gifts, all which assist businesses shape a culture where employees are as happy and as valued as customers. RedBalloon programs ensure organisations ‘notice’ what their employees do and encourage a deeper level of employee engagement. Forming an attachment (emotional and rational) between people and the brand is one way that we help produce a happier workforce and in turn a stronger economy.

Date: 15/04/2011