employee-engagement-strategy-startups

1

WHAT STARTUPS CAN TEACH US

ABOUT EMPLOYEE ENGAGEMENT

2

WHAT STARTUPS CAN TEACH US ABOUT EMPLOYEE ENGAGEMENTEmployee engagement is a challenge, but successful startups can provide a blueprint for businesses of all types.

TABLE OF CONTENTS

03 An Epidemic Of Disengagement

04Howcanyourbusinessbenefitfrombetter employee engagement?

04 Successful Startups Start With a Winning Culture.

05 Create a Culture of Accountability

06 Make Your Workplace a Place Where People Want to Work

07 Empower Your Employees to Make Decisions

07 Encourage Employees to Wear Multiple Hats

08 Take an Innovative Approach to Recruiting

09 Recognize Successes

10 Conclusions

Disengaged employees: Those who are emotionally disconnected from their companies and may actually be working against their employers’ interests.

An Epidemic Of Disengagement

In their most recent State of the American Workplace study, Gallup polled more than 25 million working Americans and found that more than 70 percent were actively or passively disengaged with their careers.

Gallup concluded, “Only 30 percent of the U.S. workforce is engaged in their work, and the ratio of actively disengaged to engaged employees is roughly 2-to-1, meaning that the vast majority of U.S. workers (70 percent) are not reaching their full potential — a problemthathassignificantimplicationsfortheeconomyandthe

3

MODIS What Startups Can Teach Us About Employee Engagement

Engaged employees: Those who are involved in, enthusiastic about, and committed to their work.

4


Howcanyourbusinessbenefitfrom better employee engagement?

Gallup’s research shows that companies or “work units” with a high ratio of engaged to non-engaged workers have:

• Significantlyhigherproductivity,profitabilityandcustomerratings

• Better employee retention

• Reduced absenteeism

• Fewer safety incidents

On the other hand, active employee disengagement has a negative impact on both businesses and the economy overall. Gallup estimates that active employee disengagement costs the U.S. an estimated $450 billion to $550 billion per year.

Successful Startups Start With a Winning Culture.

The number of successful startups has increased substantially in recent years. Since the fourth quarter of 2010, the number of businessesi launching each quarter has exceeded the number of businesses shutting down every quarter. Additionally, the demand for small business loansii has seen a continued increase over this same time period, rising 4.5 percent between 2012 and 2011, and rising 15.4 percent between the end of 2012 and March 2013.

And while these successful startups operate in different industries, with different visions and with different products and services, they all seem to have one thing in common: a focus on creating a distinct and attractive corporate culture.

A quick search on the Internet provides a plethora of imagery that suggests working for a startup is far from the stereotypicalofficeexperience.Articlesand photos depict open, casual workspaces in the trendiest neighborhoods of urban cities, all humming with energy and bustling with young, passionate visionaries. Companies like Etsy, Evernote and Dropbox have been featured across the webiii for their eclecticofficespaces.Duetotheever-present and vocal nature of these organizations, an indisputable correlation between working environment and engagement has emerged.

The Social Workplace compiled statistics on employee engagement in 2011 and found that when companies increased investment in a positive company culture by 10 percent, theyincreasedtheirprofitsby$2,400 per employee per year. IV

Thus, investing in your corporate culture canyieldsignificantreturns.Thefollowing pages contain a few company culture and employee engagement ideas that organizations of all sizes and ages can borrow from the startup sector.

5


TIPS FOR IMPLEMENTING FLEXIBLE WORK SCHEDULES:

• Make investments in technology: VPN, chat software, etc. can make working remotely a possibility. Free apps such as Google Hangouts are available to host video conferences.

• Start small by scheduling pilot days for your employees to work from home: Take note of what works, what doesn’t and what needs to be improved to create a more permanent policy.

• Don’t leave anyone out: If you allow your managers to work from home but their subordinates are required to beintheoffice,moraleandmotivation will likely decrease.

Create a Culture of Accountability

While culture is easier to create and spread within a small, new organization, it is also dependent on whom you hire.

“We are rigorous in our recruiting,” says Jesse Kurth, Director of Client Success for Tinderbox, a 5-year-old company that specializes in online proposal management software enabling clients to generate data-driven sales documents. “Because we are still small, there’s no place to hide. There is a consequence for every person in every seat and every task they complete, or don’t complete.” Since 2009, Tinderbox has grown to a staff of 40 working in a renovatedwarehouse-styleofficeinIndianapolis’ Monument Circle.

For Kurth, high employee engagement is not really an option, it’s an imperative: “In the early days, running a startup is like navigating a ship while it’s still being built. Every employee is a crew member, and if they don’t pull their weight, the ship could sink… and they know that. We operate in a culture of accountability, and therefore don’t have a PTO policy or evensetofficehours.Everyoneisexpected to be accessible between nine andfive,butitdoesn’tmatterwhethertheyareintheofficeorworkingfromhome.”

The struggle to maintain a healthy work-life balance while commuting – which can average about an hour per day – is a big reason why many employees are actively disengaging. Giving employees the option to work remotely,haveaflexibleschedule,orleave early at the end of a particularly long week is thought to reduce stress levels and increase productivity.

6


Make Your Workplace a Place Where People Want to Work

Anthony Rhine, Jesse Kurth’s colleague and Business Development Manager at Tinderbox, believes camaraderie is a huge contributor to having a highly engaged company culture.

“Youcan’tbuildculturesimplybyhavinganawesomeofficespace,”Rhinesaid.“However,anawesomeofficespacewillencouragecamaraderie, which will have a great impact on culture.”

SueYehdescribestheofficespaceofdigitalcommercestartupStackSocial,wheresheworks as a Jr. Software Developer, as a prime slab of real estate along the boardwalk in Venice Beach, California. Since announcing its funding in July, 2012, the company has grown from six beta publishers to 25. Employees enjoy free, unlimited access to a stocked refrigerator in the shared break room, as well as a company-paid-for social hour every Friday. Like Tinderbox, StackSocial lacks an established vacation policy and reliesonacultureofaccountability,meaningculturalfitisimmeasurablyimportantwhen recruiting.

Chewse,aSanFrancisco-basedvirtualmealmanagerprovidingpersonalizedofficecatering, integrates the culinary experiences piece of company mission into their environment by celebrating every Thursday night with a “Syssitia,” or feast, to encourage team camaraderie after work hours.

According to Tracy Lawrence, CEO and co-founder, “the Syssitia tradition comes from Ancient Greece and was the practice of bringing kinship groups together to share a great feast before battle. Working for a startup is, in many ways, a constant battle. Youneverknowwhattomorrowwillbring.Somepeoplefindthisterrifying,butatChewse, we embrace it… while bonding over a spread of delicious food.”

AccordingtoLawrence,Chewsealsousestheirofficespacetodrivefellowshipandculture.LocatedindowntownSanFrancisco,theChewseofficeisanopen-airloftcompletewitharooftopdeck.“Theopenworkenvironmentpromotesthefreeflowofideas and a sort of workplace serendipity,” Lawrence explains. “It helps to overhear what your coworkers are doing in the early stages of a startup.”

David Hassell is the CEO of 15Five, another San Francisco startup that develops inter-company employee feedback systems. In a recent blog post, Hassel pointed out that “the bottom line is that when you create a great environment for your employees and your value and mission align with your team, they’ll love you, stick around, and have the motivation to work harder and smarter.”V

7


TIPS FOR CREATING AND MAINTAINING COMPANY CULTURE IN ANY ORGANIZATION:

• Take a poll of your employees to understand their motivations, their desires and their suggestions.

• Work with all employees — at all levels ofyourorganization—todefineanddevelop an optimal culture. Don’t just mandate a culture change from the top-down; it won’t work.

• Work with company culture experts or consultants to design custom programs and processes for your organization.

Empower Your Employees to Make Decisions

Based in New York City, Matthew Hudson is Director of Web Applications, for Kandu, a startup that develops creative gaming applications for children. He believes that autonomy is crucial when it comes to employee morale and engagement.

“One reason I feel highly engaged in my work is that decisions can be made very quickly,” he said. “I have the autonomy to work on projects that truly interest me, and I don’t have to seek approval from 20 people before moving forward.”

David Kerr, COO of Tinderbox, agrees with Hudson.

“Rapid decision-making also allows you to better meet your performance goals for each month or quarter. Since startups arerelatively‘flat’organizations,thereisless bureaucracy, less red tape, and fewer roadblocks to bring concepts to reality.”

Nimble, agile and resourceful are the three basic adjectives Kerr uses to summarize the way Tinderbox operates.

“Running a startup is a lot like driving a sports car as opposed to a large SUV,” he explained. “You have better handling and maneuverability and you can accelerate faster. You’re constantly switching gears and you feel every curve, every bump in the road. Sure, there’s a greater risk that you’ll get hurt if you crash, but it’s thrilling nonetheless.”

Encourage Employees to Wear Multiple Hats

Hudson, of Kandu, appreciates the fact that there is no redundancy at his company.

“Rather than having 10 people with the same job function, as often found at large organizations, each individual is doing two or three different job functions,” Hudson described. “This means that every task and every result can be clearly traced back to one person, allowing for greater transparency and thus, higher engagement.”

8


According to Kerr, the employees at Tinderbox also wear many hats:

“When startups are still small, they don’t have silos the way corporations do. The single marketing employee might work on competitive research, sales enablement, SEO and digital marketing all in a day. In fact, every role is like that at the beginning.

“Onemajorbenefit,whichcontributestoengagement, is that it’s easier to recognize individuals for their achievements and individual contributions.Anotherbenefitfortheemployees is that they are able to learn a variety of different jobs at a much quicker pace, which allows them to discover and hone in on their true passions, or what their strongest skills are.”

Take an Innovative Approach to Recruiting

As mentioned earlier, recruiting for culturalfitiscriticalforstartups.Becauseofthelean,flatstructureoftheorganization, a single bad hire can have a catastrophic impact on the company’s growth and future. There are several challenges associated with recruiting in startups:

• The lack of strong brand recognition to attract candidates;

• The lack of an established recruiting team and a formal recruiting process;

• High demand for programmers, developers and other technical, hard-to-findskillssets

To offset these challenges, startups must be innovative in their recruiting and emphasize the advantages of working for a startup. Below are some unorthodox recruiting tactics that you can learn from startups.

TIPS FOR INNOVATING YOUR RECRUITING:

1. Targetpassivecandidates:Clearlydefinethe qualities you are looking for and target top candidates who are not currently in the job market. Do some researchandidentifythespecificqualities that might attract them or turn them off, and what criteria they might use to accept or reject a job offer.

2. Inventory your selling points: Conduct a competitive analysis and determine what differentiates your company from other companies, and emphasize these qualities when talking to candidates. Maybeyourcompanyismorefinanciallystable than your competitors, or (if it’s a startup) closer to an IPO. Maybe you have a superior product, state-of-the-art technology, or you have a really awesome location and team. Find out what is important to your top candidates and design a recruiting strategy accordingly. It is common for startup companies to offer unconventional perks, like equity or stock options, access to complimentary food and beverages throughouttheworkday,flexibleschedules,fitnessfacilitiesand/ormemberships, education opportunities, freedom to work on passion projects, exceptionalhealthbenefits(insomecases, even for employees’ pets!) and “bring your pet to work” days. Make a list of your company’s most enticing benefitsandmakethemanintegralpartof your recruiting tactics.

9


3. Get involved: Recruiting top talent is not easy and it requires a high level of community involvement and local recognition. Hosting special events that feature well-known speakers, an interesting topic or even just free food and an appealing atmosphere is a great way to grow your network and attract both passive and active candidates. Remember that community involvement can also extend to virtual communities. Many talented tech professionals can be found on technology forums and social networks such as Github, an online storage space for collaborative, open source projects.

4. Engage your CEO in the recruiting process: In many cases, the CEO title alone is enough to impress potential recruits. This may require a little coaching, but your CEO can be your most powerful recruiter when reaching out to candidates directly and pitching job opportunities.

Recognize Successes

While formal rewards and bonus programs can be great motivators, the fact is many startups don’t have the budgets necessary to offer them. However, employee motivation doesn’t have to be tied directly to rewards — it can be inspired through recognition.

Recognizing accomplishments — at meetings, in person or even through emails — shows employees that they are appreciated. Antony Rhine says peer-to-peer recognition is a huge engagement driver for Tinderbox. Rhine describes a monthly tradition at Tinderbox that involves “passing the Gavel of Success” to the employee who made the greatest impact on the past month’s revenue. This type of recognition drives player-coaching, competition and collaboration, with clear ties to the company’s monthly recurring revenue.

TIPS FOR RECOGNIZING EMPLOYEES:

• Host a weekly or monthly “shout out” meeting where employees are publicly recognized for going above and beyond.

• Buy inexpensive gift cards with your company’s credit card reward program to offer a small, monetary “thank you” for hard work.

• Implement a peer-to-peer recognition program where your employees can nominate each other for awards or shout outs.

• When employees are key contributors to successful projects, managers should openly recognize them in front of leadership. Email recognition is particularly useful as it can assist team members when building portfolios or as they compete for internal positions.


Conclusions

Whileitmayseemlikeadifficultanddauntingundertaking for large companies to enhance employee engagement by emulating and integrating the culture of startups, it’s not impossible.

Stryker, one of the world’s leading medical technology companies, has been recognized several times by Gallup for having consistently high engagement levels. Additionally, Intel and Hyatt Hotels are other paradigms of employee engagement. Jim Harter, Gallup’s Chief Scientist of Workplace Management and Wellbeing, initiated the first“StateoftheAmericanWorkplace”studyin1997.Hesays,“I’mreallyencouragedbywhatfirmslike Hyatt Hotels, Charles Schwab, Stryker, PNC Bank and the Cleveland Clinic have done to inspire much higher engagement.”

No matter the size of your business’ workforce, you need to make sure it’s producing at peak levels. You don’t want to lose your top talent — and their abilities — to the competition, given that so many other small businesses are in hiring mode. The key to keeping your biggest assets working hard and working for you is to keep them happy, healthy, motivated and engaged.

I. United States Department of Labor. Bureau of Labor Statistics. Economic News Release, April 29, 2014.

II. Brian Head. Small Business Trending Up. Economist Small Business Quarterly Bulletin, First Quarter 2013

III.22GorgeoWusStartupOfficesYouWishYouWorkedIn.BuzzFeed.November21,2013.

IV. Elizabeth Lupfer. Social Knows: Employee Engagement Statistics (August 2011 Edition).

V. David Hassell. Busting the Myth on Company Culture.

Partner with the experts! If you are having trouble recruiting and retaining the right professionals for your business, a proven staffing company like Modis can help. We have established relationships with top IT talent, and we can leverage these relationships — as well as our unparalleled understanding of the IT industry and your local job market — to connect you with the professionals you need to inspire exceptional results. To learn more, contact your local Modis branch today.

1-877-MODIS IT I modis.com

employee-engagement-strategy-startups

Documents

Transcript of employee-engagement-strategy-startups