We live in a period of transformative change. It's difficult to talk about any aspect of business these days without touching on what the "future of work" means and what its implications are for individuals, companies and societies. Part of the reason for this is that we are all increasingly aware of the technological advances, changes in government policies and shifting employee expectations that are reshaping what we know as work. As artificial intelligence (AI) and automation infuse into everyday life, the opportunities to reinvent how people will work and live are significant. What does this mean for the employee experience in this age of disruption? How does an organization build an employee experience program that's relevant for this modern world? The Role of HR: Connectivity in the Human Age According to Mercer's 2019 Global Talent Trends report, 73% of executives predict significant industry disruption in the next three years — up from 26% in 2018. Along with the constant change that disruption brings is the emergence of several human capital risks, such as a decline in employee trust and an increase in employee attrition. Organizations are realizing that people-centered transformation is the key to transferring the shockwaves of disruption into sparks of brilliance. This translates into a need for HR to lead at the drafting table, yet only two in five HR leaders participate in the idea-generation stage of major change projects today. To ensure the Human Agenda remains at the heart of change, HR needs a permanent place in the design process, rather than being a late-to-the-party guest. A critical contribution the HR function will make is helping to design and deliver exceptional employee experiences. Understanding the Employee Experience How do you capture the moments that matter in an employee's life cycle? From onboarding to having a new manager or getting promoted, critical experiences help shape an employee's connection to the organization. Each employee is different, with diverse needs and talents — and over the course of a career people are exposed to different events and experiences. Some experiences enhance their fit with the organization, some do not and others undermine it. This translates into varying levels of employee and business performance. A more digital HR team, combined with data and analytics that new tools bring, can help leaders understand these experiences at a deeper level. Although it is still common for organizations to conduct episodic surveys of employee attitudes once a year, many are now looking to augment their employee-listening strategy with more fluid pulse surveys to provide deeper insight. Using an employee experience platform, HR teams can now conduct on-demand surveys as and when needed, and employees can give feedback when it's most relevant, with actions aligned to specific needs and timing. Platforms, like Mercer's Allegro Pulsing Tech, enable HR teams to take an active-listening approach to understand experiences over time. This generates better insights into multiple touchpoints, providing HR the opportunity to design more engaging experiences across the employee life cycle. This sets in motion a culture where employees feel heard and are supported and encouraged to do their best work every day. Increasingly, organizations acknowledge that the employee experience is as important as the customer experience. Research has shown that companies leading in customer experience often do so via exceptional cultures and engaged people. The importance of investing in the employee experience can't be ignored. Building a 21st Century Employee Experience Program Enabling employees to thrive requires intentional redesign of critical employee experiences, using new technology and AI to make work more inclusive, personalized and focused. To do this, organizations need an employee-listening program that uses multiple methodologies to generate deeper insights for diverse stakeholders, including the employees themselves. This new type of organizational research takes an evolving approach to measurement and uses new technology to support more integrated analyses and more experimentation within the organization to generate real learning. The goal is for everyone to have a broader and deeper understanding in an optimal manner to generate a more compelling employee experience, more effective teams and a higher-performing organization. In this age of disruption, as the pace of change accelerates, individuals need support in finding new ways to adapt and contribute. Without help, individuals, organizations and societies will fail to thrive. As more tasks get automated, HR — as the guardian of the employee experience — is best placed to lead this reinvention.
One of the most interminable and perhaps charming aspects of human nature is a near constant dissatisfaction with the status quo. In the context of work, pay and benefits are often the targets of dissatisfaction employees are most vocal about. In the future of work, employees want greater control over their careers, they want to be rewarded accordingly, and they want to know they are doing something that matters. To build a thriving workforce, human resources (HR) and leaders, throughout the organization, should use people analytics to glean insight into what they need to do to create a thriving work environment – an environment where employees feel empowered about their development, connected to their work and confident that their core needs are being met. In today’s digital era, nurturing engaged thriving workforce is not a destination, but a journey. When organizations make positive transformation a business imperative, employees who are fully invested in the mission — not just fully engaged in their work — will carry their organizations through. Through people analytics, organizations can use employee feedback programs to find out how their employees feel about their career paths and gauge connection to their work. Reason #1: People analytics uncovers what empowers your employees As new technologies make it faster and easier for people managers to funnel huge amounts of information and demands to their employees, there is an equal rise in expectations from employees. These days people want control, or at least a say in how, where, and when they do their job. Often, frustration ensues if employees do not feel they have a role in this decision making process. Consequently, workplace flexibility has become a top priority in today’s market, as evidenced by 44% of respondents from the World Economic Forum’s The Future of Jobs report, and 51% of respondents from Mercer’s Talent Trends 2018 report who note flexibility as a top workplace trend or essential. Further, employees and organizations alike, are re-assessing what they want their futures to look like and what it means to have a “successful” career or business. There is growing recognition that successful organizations are made up of workforces that continually develop, learn and expand their capabilities. Tangentially, employees are increasingly starting to understand how critical it is to develop skills that are responsive to future business needs. Why? Because by 2020, 36% of jobs will require complex problem solving skills, and 19% will require social skills like emotional intelligence, negotiation and collaborating with others. Unsurprisingly, the World Economic Forum also predicts that by 2020 “more than a third of the desired core skillsets of most occupations will be comprised of skills that are not yet considered crucial to the job today.” This explains why many individuals will need to be more focused on learning how to learn and perhaps how to unlearn – and why so many organizations need to empower their employees to do so. Reason #2: People analytics connects your employees’ work with a sense of purpose The Talent Trends 2018 report also found that 75% of thriving employees work for a company with a strong sense of purpose. Indeed as employee expectations evolve, many are starting to look for more meaningful, flexible, and enriching experiences at work. This is especially true for workplaces where technology has disrupted jobs to the extent that people feel extreme uncertainty about their futures. Companies that focus on using analytics to provide meaning and purpose and help their employees navigate the volatile and uncertain environment toward finding their North Star. Data from Mercer-Sirota surveys shows that while 1 in 3 employees strongly agree with questions about their engagement at work, only 1 in 6 strongly agree that their company is responding effectively to changes in its external business environment. The latter may be a reflection of how most employees do not feel their individual sense of purpose is aligned to that of the organization. To help kick start this effort, some organizations have started to use analytics to personalize work to help employees feel more connected to the company’s purpose. The intention is to design workplaces where people can say: 1. I’m confident. I have what I need to do my job, and I know where to find people and information to help me take action. 2. I get it. The work process is simple. This experience feels as modern and familiar as the consumer tools and sites I already use. 3. I feel appreciated. I know how to contribute, and I can see the value of working here, both now and in the future. Reason #3: People analytics improves internal and external user experience There is no doubt that organizations are looking for ways to tap into a consistent stream of insights on their people. Indeed, 46% of organizations plan to introduce a continuous feedback tool in the year ahead, and many are exploring tools for real-time feedback on key initiatives. As organizations move toward talent platforms and skills-based employment, many need to utilize smarter employee feedback analytics, usually combining surveys and other methods that provide consistent feedback and drive greater agility. Digital solutions that help companies engage their talent ecosystem and support their employees’ health, wealth, and careers will be essential in the future of work. These changes have caused many HR leaders to start thinking of employees more like customers. Like marketing functions that use data driven approaches to learning about their customers, HR functions are beginning to use similar approaches with employees. For example, employee feedback and behavioral data can be used to learn how to improve the employee lifecycle – from the onboarding process all the way to the exit interview. Thriving companies incorporate their employee survey findings across the employee life-cycle to implement changes and improvements, and they do this exercise often, not just once a year. While this sounds appealing, the area where HR usually struggles most is in designing compelling user experiences for employees and managers – ones that support user engagement. I would argue that HR has a responsibility to use technology to improve the feedback process, simplify workflow and tailor employee experiences. The most effective feedback surveys are streamlined to collect employee opinions in a way that helps leaders and HR keep a finger on the pulse of the organization. When done well, employee surveys are a trove of information and insights that can be used to set or adjust strategy. Keep in mind this last, but perhaps most important note: there is no point in using people analytics or employee feedback programs unless it helps drive organizational changes and improvement. For example, Google in Ireland responded to employee feedback about work-life balance by implementing a “Dublin Goes Dark” initiative. In this campaign employees were asked to leave their devices at work to encourage them to truly disconnect and switch off. This is an example of how Google uses employee feedback (or people analytics) to build a thriving organization where employees feel heard, respected and empowered. Reason #4: People analytics unlocks the full potential of your workforce Effectively building a thriving organization means using people analytics to find out what you do not know about your employees. Employee engagement surveys are morphing into more streamlined processes that can help leaders and HR keep a finger on the pulse of their organizations. Seeking regular feedback helps companies stay aligned to core employee needs and engagement. It can also highlight what gaps need to be plugged and what potential issues may arise. Feedback even allows organizations to adjust when new needs emerge. By checking in regularly and implementing responses, organizations can create an environment that unlocks the full potential of their workforce. 1 The Future of Jobs: Employment, Skills and Workforce Strategy for the Fourth Industrial Revolution | World Economic Forum http://www3.weforum.org/docs/WEF_Future_of_Jobs.pdf 2 Global Talent Trends Study 2018 https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html 3 Sirota's Normative Database https://www.sirota.com/improve-your-performance/action-practices-and-tools/best-practices-database/sirotas-normative-database/ 4 Google's Scientific Approach To Work-life Balance (and Much More) Laszlo Bock - https://hbr.org/2014/03/googles-scientific-approach-to-work-life-balance-and-much-more
Employees are most committed to their organization when they believe in the business and operate in a high-commitment work environment—one where employees are not only engaged in their work, but also committed to making the organization better. For decades, organizational leaders, HR professionals and industrial-organizational psychologists have searched for ways to create high-commitment work environments. Considering the expense and disruption associated with turnover, this makes good sense. One recent study found that turnover costs (e.g., separation costs, replacement costs) range from 90 to 200 percent of the exiting employee’s salary. When turnover increases, the social fabric of an organization weakens, intangible knowledge and skills are lost, operational effectiveness decreases, accidents rates rise, customer service and quality suffer, and customer satisfaction declines7. All of which can negatively impact a company’s financial performance. To increase commitment, many organizations are now trying to build employee-centric work environments. These organizations are spending considerable amount of time, energy and resources identifying employee motivators, assessing employee engagement and enhancing the employee experience. For example, some organizations are using “stay interviews” to help managers ensure they are meeting the critical needs of their direct reports. Others are conducting job-crafting exercises to help employees make their jobs more personally meaningful and satisfying. Based on our experience, these types of interventions can be effective and increase commitment levels. But we’ve found their impact tends to be short-lived, often leading to temporary fixes and local improvements rather than broad organizational change. In fact, engagement building activities can backfire if employees have foundational questions and concerns about the business. When strategies are unclear, work processes are inefficient, performance goals are unclear, and products and services no longer meet the needs of clients and customers, employees become frustrated. As one employee recently stated: “I love this company, but I don’t like the direction we’re headed in. We spend too much time on nonsense. We’re getting away from what we are supposed to do, which is meeting clients and selling.” When faced with organizational frustrations, some engaged employees leave to seek better opportunities elsewhere. In the recent Mercer-Sirota Engagement study, we found that over a quarter of employees who quit were in fact engaged. So if engagement does not guarantee retention, what’s the best way to build a high-commitment organization? New research indicates that individual commitment may be more related to business performance than employee experience. In recent years, researchers have started exploring the relationship between organizational efficacy—the extent to which organizational members feel confident about their collective capabilities, mission and business resilience—and employee commitment and performance. The concept of organizational efficacy can be traced back to the seminal work of Albert Bandura, who argued that the strength of families, communities and social institutions depends, in part, on members’ sense of their collective efficacy—their ability to solve problems and manage challenges together. Building on this initial theory, other researchers have focused on efficacy in organizational settings and found that it is related to a number of important work outcomes. For example, Capone and colleaguesi (2013) found that organizational efficacy has a positive impact on employee job satisfaction, well-being and performance. And Zellars and colleagues (2001)ii found that healthcare workers with a high degree of collective efficacy were more satisfied with their jobs and less likely to quit. Informed by this research, we recently explored the relationship between an employee’s level of confidence in their organization with their commitment and engagement. After gathering data from a cross-company sample of more than 1,700 employees working in small, medium and large organizations, we conducted a series of analyses. Three key findings emerged: 1. Organizational confidence is related to employee commitment. Across a number of diagnostic items, we found significant positive correlations between employee confidence and employee commitment. Employees were more likely to want to stay at their organizations when they felt they were working in a well-run organization with the right products and services for their market. But when employees did not feel confident in the future of their organization, commitment levels dropped precipitously. In fact, over 40 percent of respondents who felt unconfident in the future of their organization intended to leave within the year. 2. Organizational confidence soars in the right work environment Based on statistical analysis, we found four foundational drivers of organizational confidence. First is clear communication. Employees were more likely to feel confident when they understood their company’s goals and felt their organization communicated effectively. Second is a sense of collaboration. When employees experienced a high degree of cross functional teamwork, they were more likely to feel positive about the future. Third is organizational agility. Employees who felt they were working in nimble organizations that encouraged innovation and responded quickly to customer needs were more likely to be optimistic about the future. And finally, effective leadership is paramount. When employees trusted their senior leaders were making sound decisions, they were more likely to feel a sense of organizational efficacy. 3. The most committed employees are both confident and engaged. In addition to finding that confident employees were less likely to want to leave their organizations, we also found that engagement is a strong predictor of employee commitment. In fact, we found that employees were least likely to want to leave when they felt both confident in their organization and engaged with their work. We also found a strong positive correlation between engagement and confidence, suggesting that these two attitudes build on each other in a virtuous cycle, creating a strong sense of energy, effort and loyalty. Statistical analysis showed employees were more likely to feel both confident and engaged when they thought their organizations were efficient, their senior leaders were effective, and their future career paths were promising. Considered together, our analyses show that organizational confidence is a critical factor that impacts employee commitment. For leaders and managers seeking to create a high-commitment work environment, this raises an important question: What’s the best way to increase organizational confidence? Based on our research, we recommend four steps. 1. Forecast the future. These are volatile times in many companies. Amidst competing commitments and shifting priorities, we’re finding that a number of employees feel lost in the shuffle. According to our latest Mercer-Sirota Normative database, just 69 percent of employees report feeling that their senior leaders provide a clear sense of direction. As we found in our recent field study, a lack of strategic clarity undermines confidence. It’s hard for employees to feel optimistic about the future when they don’t know where their organization is headed. If your organization has been going through a lot of changes in recent years, now could be a good time to evaluate the extent to which your workforce understands and supports your strategic direction. 2. Create a culture of curiosity, creativity and collaboration. Culture is the invisible infrastructure of an organization, shaping the way people think, feel and behave on a daily basis. Based on our research, we’ve found that employees thrive when they work in a “partnership culture” in which people work together in highly collaborative relationships. Confidence flourishes in an environment where employees feel safe to take smart risks, pursue novel ideas and question the status quo. But here’s the problem: Partnership cultures require the right kind of leadership. We’ve seen leaders and managers kill creativity and collaboration by building silos, fixating on short-term financials and micromanaging their staff. So if you want to build a collaborative culture, start at the top. 3. Remove performance barriers. Based on our research, we’ve found that most employees are highly motivated when they first join a new organization. But that initial energy often dissipates when employees have to work in environments with excessive rules and regulations, unnecessary bureaucracy and outdated tools and technology. The more hindrances employees encounter at work, the more likely they are to become frustrated, disengaged and even burned out. If you want to build a high-commitment work environment, identify and remove the performance barriers that prevent your employees from doing their best work on a regular basis. 4. Clarify career paths. Our study found that the most committed employees felt optimistic about both the future of their organization and the future of their career. Across clients and research projects, we’ve found that employees who feel they can grow and develop at work are more likely to work hard, stay longer and perform better. But based on our norms, only 57 percent of employees have a clear understanding of the possible career paths within their organization; the rest feel confused or pessimistic. One of the best ways to counter this confusion is to create compelling career frameworks that help employees see how they can develop within your company. We’ve found that well-designed career frameworks can dramatically impact the way employees think about the future of their jobs and their organizations. At the core of these recommendations is a simple premise: You can increase employee confidence by ensuring your leaders, managers and HR professionals are articulating a compelling vision of the future, fostering the right culture, driving performance and creating compelling career paths. That, in turn, will help your organization increase commitment, decrease turnover and improve collective performance. 1 Allen, Bryant, & Vardaman, 2010 2 e.g., Batt & Colvin, 2011 3 Nyberg & Ployhart, 2013 4 e.g., Ton & Huckman, 2008 5 e.g., Shaw, Gupta, & Delery, 2005 6 e.g., Hancock, Allen, Bosco, McDaniel, & Pierce, 2013 7 Heavey, Holwerda, & Hausknecht, 2013 8 e.g., Park & Shaw, 2013; Shaw et al., 2005
Growth markets have enjoyed significant gains in economic performance in the past 20 years by attracting investment and improving infrastructure, particularly in China and India. Localized trade, such as that occurring within Asia and Latin America, has also helped boost performance. Speeding these growth economies along on their journeys are improved political stability and vastly enhanced access to technology and education. However, these markets face a major challenge in the form of falling productivity, which threatens to undermine their impressive growth stories. Why is Productivity Failing? Although the majority of major economies have weathered a decline in labor productivity since the Global Financial Crisis of 2008/09, the slowdown has been more dramatic in emerging and growth markets, For example, in Singapore, labor productivity growth plunged from 3.89% (1999–2007) to just 0.77% (2008–2016), according to The Conference Board Total Economy Database. Over the same period, economic powerhouse China has seen its labor productivity fall from 7.74% to 5.82%. Many growth markets experienced strong productivity gains through the introduction of technology that helped them catch up with more developed economies. But the impact of technology on productivity levels has faded, while rising wage pressure, ineffectual leadership and low engagement levels are making gains harder to sustain. Innovation and new technologies can no longer simply be borrowed from more developed countries. Instead, growth markets must invest capital themselves while equipping their workforces with new skills and competencies. Engagement Holds the Key Organizations recognize the importance of employee engagement and its impact on productivity levels. If one group of employees produces less than another possessing equal education and skill, then the logical cause must be inadequate leadership and engagement. In 2011, a group of economists from Stanford University conducted a study of how individual managers impact the productivity of teams. They accessed more than 5.5 million transactions from a data processing company to analyze how supervisors of more than 23,000 employees influenced group performance. From these data, they found that having a great boss was equivalent to adding an extra person to a nine-person team. The way that great bosses did this was by teaching employees more efficient and productive ways of working, and/or by motivating them to be more focused, according to the economists. This simple but sophisticated study helped distill something that management science has known for a long time: Your performance as a leader is more about your ability to grow and motivate others than your own technical prowess or productivity. In the past five years, Mercer | Sirota has asked around 5 million people from all over the world how motivated they are at work. Across this group, 18% have said they do not find work a motivating place to be. For companies with bigger morale challenges, the number can be as high as 35%. This represents a huge waste of talent and time. Ask yourself: Would your company tolerate waste of one-third of any other resource? There are other ways, besides engagement, to boost employee productivity, such as investing in factories and equipment or hiring more employees. But these require substantial capital investment. Cultivating an engaged workforce is far less costly and better positions a company for lasting competitiveness. It also makes better use of an existing resource. For organizations in growth markets, it’s critical to address employee engagement issues quickly. In markets that offer an abundance of growth opportunities, disengaged employees with low levels of productivity can easily result in loss of market share lost, a damaged brand and an opportunity for competitors to seize. Four Ways Growth Markets Organizations Can Engage Employees Here are four recommendations to better engage employees and subsequently boost their productivity: 1. Promote the right people Managers are the critical link between employee talent and group performance. Therefore, a manager should be judged based on his or her ability to transform a group of talented people into a high-performing team — not their technical skills, nor senior leadership’s “gut instinct” or personal opinion about the person. Yet many organizations in growth markets still promote managers based on these criteria, which have no link to effective people management. A better approach is to use well-validated and robust tools to gather data on management’s potential from current employees and new hires. This will allow a company to identify and advance its most talented leaders and, by proxy, drive stronger levels of employee engagement. Using data in this way will also improve transparency and perceived fairness, further enhancing engagement levels. 2. Focus on core employee needs There are many passing fads about what people want from work. However, more than 40 years of research from psychologists at Sirota have shown that people basically want three core things. First, they want to contribute to something meaningful and to be rewarded for their achievements. Second, they want to feel like they belong to part of something bigger than themselves, which they pursue in partnership with their teammates. Third, they want to be treated fairly and valued for what they do. If companies can teach leaders about these needs, people are more likely to show engagement and commitment to their work. 3. Stop putting people in the wrong jobs In the growth markets region, most jobs are still assigned based on technical skills rather than personality and behavioral tendencies. Defining both the behavioral and technical aspects of any job can vastly improve the fit between an employee and the work he or she does. The bottom line is that people are best at work they enjoy. So be sensitive to the skills and interests of your employees as you assign them to jobs. 4. Get better feedback Although many companies continue to run a fairly regular (annual) employee survey, very few collect any useful data. This leads to poorly conceived action plans and a complete lack of leadership attention. But employee feedback is vital for an organization to discover where it stands and what it can do to improve efficiency, innovation and customer experience. If it’s done well, regular feedback can form a key part of an organization’s management information system, driving intelligent decision-making and enhancing managerial effectiveness. The biggest barrier to using employee feedback data is often leadership. If leaders don’t take the views of employees seriously, then nothing will happen. In the vast majority of situations, perception is reality. So if employees see nothing being done with the data or any subsequent improvements based on the survey results, they naturally think their company isn’t doing anything to engage with them.