Spring 2018 Issue
The evidence is in and results are clear: people are the most valuable asset of an organization. “Engaged workers who are appreciated as an asset are the source of innovation, customer service, and feed top line growth in the most successful organizations,” according to a recent report from Kronos on the state of employee engagement.
In today’s hyper-competitive environment, we know that companies must be lean, shrewd, and focused on the bottom line. But despite research on the benefits of a people-first approach, common practice still shows that the bottom line takes priority over the expense of this approach.
Kronos’ recent report indicates that a majority of employees felt their CEOs focused solely on the finances of the organization, and not the people within it. And this apparent indifference to employee engagement wasn’t remedied by HR. According to the report, 66 per cent of HR managers did not consider its people among the top three assets of the company.
Why do senior executives take this position despite research to the contrary?
Many executives suggest that since employees are already an organization’s largest expense, spending even more time, resources, and cash to develop them is simply not warranted. However, to view employees as a liability rather than as asset is a dangerous strategy: one that may end up negatively impacting a company’s bottom line.
A recent Harvard Business Review report on the effectiveness of employee engagement initiatives found that companies investing in enhancing employee experience consistently outperformed those that did not. They were also up to four times more profitable per employee.
These companies didn’t just throw faddish perks or incentives their employees’ way to keep them momentarily happy. They invested in the employees' long-term well-being. Fittingly, according to the Kronos report, 78 per cent of employees have said they would leave a company if they didn’t feel valued.
So, why do companies still resist acting on hard data? There is difficulty measuring and aligning the impact of soft skills training to a financial metric. Therefore, the criteria around deciding on this investment hinges on the impact on the bottom-line in the short term.
Companies must take up an organizational-wide, systemic change both in the way they view employees, and how they attract, hire, incentivize, and retain them. That’s especially true considering that millennials, dubbed the most 'restless' generation by the media, will make up 75 per cent of the workforce in 2025.
So, how can Companies Get Started in a People-First Direction?
Organizations of all sizes can take a number of different steps towards a people-over-profits approach. First, surveying employees is a cost-effective way to gauge employee engagement and identify opportunities for improvement. According to a 2017 Academy Management Journal study, employee surveys have been considered part of high performance HR practices for decades. Harvard Business Review says surveys can predict future behaviour of staff, provide the opportunity for staff to 'feel heard', and can be a useful vehicle for changing behaviours.
Another area of focus for leadership is fostering an innovative work environment. A landmark study in 2009 (McLeod Report) demonstrated the high correlation between levels of innovation and employee engagement. Innovation can be promoted within a company in a number of ways. Some organizations hold ideation workshops to team brainstorm innovative solutions to existing challenges. Others try job rotation to help employees attain a more holistic view of the company by experiencing different staff roles. Another useful practice is making sure that innovative ideas from employees are rewarded.
It's also essential to invest in employee soft skills and professional development. Not only does this show employees they are valued, it empowers them to become leaders, mentors, and innovators within the organization.
Soft skills are becoming critical skills. To survive in environments of significant change, and as some work activities are outsourced to technology via automation, soft skills are increasingly being recognized as core skills. They are what will become a key differentiator for successful organizations. And, as the data indicates, they positively impact the bottom line.
Some large organizations have taken considerable steps to move in this people-first direction through training. Enterprises have such GE and NBC Universal send high-potential talent to corporate 'universities',:intensive training programs that foster success mindsets, strategic frameworks, and leadership development aimed at growing the top line. This intensive intra-organizational training encourages people to shape the culture and become game-changers within the company.
Ryan Holmes, CEO of Vancouver darling Hootsuite, advocates for a 'people movement' strategy, which encourages talent turnover among various roles within the company, effectively reducing churn out to another employer.
“Ultimately, that leads to better recruitment and (yes) better retention anyway,” says Holmes, in an interview with Fast Company. “Smart prospects want to work at a company where they know they can learn and grow. And A-players want to keep working there as long as they’re continually challenged.”
Canada’s top 50 employers for young people in 2017 actively invest in their employees to attract and retain talent. Strategies include providing tuition subsidies and sending employees through in-house leadership development and training programs. A professional development strategy doesn’t need to be as massive or as complex as a corporate university, though.
Ultimately, it's the responsibility of an organization's senior leadership team to recognize not only the opportunity associated with a people-first approach, but also the danger of letting short-term profit goals drive all its decisions.
As founder of Priority Solutions, Heidi Hamilton has developed and implemented bold, successful growth strategies for her clients around the globe. Since 2002, Heidi has worked with companies in a wide range of fields, from IT, start-ups, enterprise, manufacturing, professional services, trade sector, associations, and more. Heidi’s gift lies in her ability to engage and work with a diverse group of people to create transformational results within organizations. Her integrated methodology means she focuses on the process, technology, the people, and the culture to realize quantum growth in sales.
Heidi has an MBA in Management Consulting from Royal Roads University, a Diploma in Financial Management from Damelin College and has studied Psychology and Communications. She is a Fellow Certified Management Consultant, based in Vancouver, Canada. To learn more, visit the Priority Solutions website.