Why valuing your employees is the most valuable decision ......The management guru Peter Drucker...

CLOSING THE LOOP | 1

Why valuing your employees is the most valuable decision you can make

CLOSING THE L P


Foreword

The customer is always right, and the customer should come first, are two notions we’ve all become accustomed to. While customer satisfaction is key, have you considered how positive employee engagement can improve this?It is our job to leverage employee value and create job satisfaction; a happy and content employee will provide a customer with a likewise service. Therefore, it is a safe assumption that you can make your customers happy, only if your employees are too.

Businesses are made up of tangible and intangible assets, tangible being the equipment and intangible the employee experience and skills. Intangible assets are amongst the most difficult to replace, studies show that organisations who lose equipment will be back in business faster than if they suffer the loss of skilled and loyal employees.

Edenhouse Solutions sponsored ‘Closing the Loop’ as our core values; Collaboration, Innovation, Knowledge and Integrity are deep-rooted throughout. Our business would not be what it is without our employees, their skills, experience and demeanour drive our success. I hope you enjoy ‘Closing the Loop’ and implement some of the advice and insight into your own business – without a doubt, your employees are key to your success.

Paul Solomon CEO, Edenhouse Solutions Ltd

4 | CLOSING THE LOOP


IntroductionOrganisations are made up of assets, whether it’s buildings, equipment, information… or people? The often-trumpeted truism that “employees are your most important asset” has taken on a much deeper and more holistic meaning since companies woke up to the reality that it’s not just the work that the employees do, or the things that they make, it’s a whole raft of intangible benefits that an engaged and happy workforce brings that make any organisation a success.

Ask not what your employees can do for you… ask what you can do for your employees.

It’s time to focus on our employees as people and not just assets.


Who wouldn’t want to work there? Who wouldn’t want to collaborate with this company?

Why happiness?The management guru Peter Drucker said: “The most valuable assets of a 20th-century company were its production equipment. The most valuable asset of a 21st-century institution (whether business or non-business) will be its knowledge workers and their productivity.” [1]

The buzz of commitment and enjoyment fills the air; employee happiness is a distinctive feature of all operations and obvious to those who have dealings with the company, whether it’s making an enquiry, placing an order, collaborating on a project or receiving a delivery. Employees have a solid grounding in the company’s mission and ethos and a sense of pride, both in their own achievement and the organisation as a whole.

Who wouldn’t want to work there? Who wouldn’t want to collaborate with this company?

This vibe, this buzz, this crackle of engagement – it’s not a dark art. It is an attainable operational state that businesses should be striving to achieve. GDP generally increases year-on-year, but so does the cost of living. As the economic treadmill speeds up, people have to work harder – and smarter – to keep up. As a result, studies show we are no happier than we were in the 1950s [2]. Nations are beginning to measure Gross National Happiness (GNH) and smart companies will get ahead of the curve by measuring and improving employee happiness.

We are enjoying a period of peak employment; the upshot is that the best talent is often the most in demand. Unpicking just what keeps staff coming in and do their job each day is of increasing focus for business – and the answer isn’t the salary. Understanding what makes a member of staff happy will reduce attrition, as well as ensuring both the employee and the employer enjoy the fruits of the employee achieving their greatest potential.

Being able to recruit, deploy and retain the best talent can be the difference for a company between succeeding and failing. Businesses that are switched on to this approach have adopted innovative ways to track staff’s happiness, productivity and engagement, as well as encouraging, recognising and rewarding their employees.



Companies try to treat their customers well and keep them happy; a customer who receives great service or a great product generates repeat custom and glowing feedback. So, reflecting this practice internally will have an even greater effect because our employees are, in fact, our primary customers.However, our employees aren’t just buying orange juice or having their boilers repaired – they are generating a whole host of tangible and intangible benefits and ensuring they are happy and fulfilled can only have positive effects.

Tangible benefits can be measured and tracked, whereas intangible benefits are trickier to pin down. They are, however, some of the hardest things to replace if an employee leaves; slotting someone into a role in a company should be a straightforward move, but how do we cover all the knowledge and experience lost? What about the team dynamic? It is great for people when they can move onto new challenges, gain a promotion or are in a position where they can retire, and no-one is advocating clinging onto employees like grim death, but companies need to balance attrition and retention.

If we foster a sense of belonging, a nurturing environment where skills and knowledge are banked and exchanged and communication is encouraged and straightforward, we can maximise the benefits from an employee while we have them, ensure a smoothless transition with no loss of function when that employee moves on and genuinely celebrate that move.

Tangible Benefits vs Intangible Benefits

Tangible benefits can be measured and tracked, whereas intangible benefits are trickier to pin down.

Goods Services

Tangible

Tangible Benefits vs Intangible Benefits

Tangible benefits can be measured and tracked, whereas intangible benefits are trickier to pin down.

Goods Services

TangibleAbility, Creativity

Experience, Expertise Decision Making Skill-set, Talent

Knowledge

Intangible



Understanding the benefits of employee happiness has come hand-in-hand with a realisation that keeping employees happy isn’t just the most profitable thing to do – it’s the right thing too; whether it’s B2B or retail, people are choosing to deal with companies and organisations with an ethical and fair track record.

Placing our employees and their experience at the heart of a company and not just treating them as assets to be managed and plundered will lead to happy, productive people who are as invested in the company as the company is in them.

And the best thing? Everybody wins! The company wins, the employees win, the customer wins and the stakeholders and shareholders win. Employee happiness is a winning strategy and a valued employee is far more likely to be a happy employee – and that’s valuing who they are and what makes them tick far more than what they make or do.

Companies need to close the loop; instead of starting with the production and delivery of goods and services provided by employees, companies should begin by placing their employees at the very heart of their organisations, nurturing them, rather than managing them, focusing on maximising their employee experience rather than their output. The results of this approach, this paradigm shift in human capital management, will have a positive effect on sales/production/revenue and close the loop by feeding back into employee experience.

Organisations that have the highest levels of employee engagement are shown to have 17% greater employee productivity [3] and up to 30% greater customer satisfaction.[4]

Organisations that focus on employee experience see a 41% reduction in absenteeism when compared with the average organisation.[5] Companies with an engaged

workforce enjoy a 40% lower turnover. [6]


Employee happiness is a winning strategy


What is engagement?

A company that is engaged can realise three times higher revenue per employee.[7]

Savvy companies are putting human resources at the forefront of corporate direction and strategy; for this presence to have any value, companies need to understand human experience.

Employee satisfaction is straightforward – an employee gets out of their employer what they put it – they do their job, make satisfactory progress, tick the necessary boxes. Clearly this is important, but it’s not nearly as important as employee engagement.

Employee engagement is a far more emotional animal and means an employee has a passion for their job and the thing they make or the services they deliver. Rather than just coasting, engaged employees are enthusiastic about their job, both inside the organisation, and externally. They are motivated to excel and for the company to excel, meaning they go the extra mile whenever possible. They know that personal success and company success go hand-in-hand, and they are invested in that success.

Mixing together employee satisfaction and employee engagement results in proper employee happiness.

Engaged employees make for a company that is engaged and when a company is engaged, great things happen for both.

Employee satisfaction

Employee engagement

Employee happiness



Mind the gapAccording to data from SAP [8], most organisations have the blinkers on when it comes to engagement. 69% of companies believe that their employees feel engaged. The reality is a far starker situation, as only 34% – just over a third – of employees feel engaged at work.

This is an enormous gulf in terms of expectation and reality – the so-called Employee Experience Gap. What is just day-to-day job stuff for employees is perceived as engagement. Contentment does not equal happiness.

Before companies can attempt to narrow the Employee Experience Gap, they need to understand what engagement looks like and to be able to foster and measure it.

69%of companies

believe employees

feel engaged

34%of employees FEEL engaged

The Employee Experience Gap


Contentment does not equal happiness

This sounds tricky to measure?Changing the way we think of our employees – no longer as assets, but moving them to the centre of the business – and focusing on ensuring engagement seems like an excellent plan, but how do we find out what their happiness base level is, and how do we track its progress and improvement?

There is lots of data for measuring and analysing customer experience, but just how do we do that for human experience data? For a start, it’s harder to capture and consists of a large amount of soft data as it’s based on emotional responses.

The trick is to start with what we know and build on that.

Companies have rafts of operational data – who does what, in what role and for whom. They can track where employees come from and where they go, how they progress through the organisation, salary, bonuses, holidays, sick leave… Often this data is held in silos, organised and tracked, but not necessarily layering up to provide a cohesive and complete picture that can be far more useful.

Once we break down the silos and integrate the human experience data then we have a powerful tool for measuring, analysing and tracking happiness. More importantly, companies will be able to use the data to inform their decision making and guide their policies to enable maximum employee happiness. Putting happiness at the centre of its strategy will ensure a company achieves the best growth for individuals, the best optimisation for teams and the best goals for itself.

The number of engaged employees in the UK has been in steady decline over recent years and is now as low as 8%.[9]


Measuring engagement• How do employees Think, Feel and Act?

• Are employees Thriving, Happy, Productive & Developing?

• Are employees Engaged?


Finding the right tool for the job

Entrepreneur Sir Richard Branson said: “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”Identifying, measuring and fostering engagement needs help. Companies need to find a way to embed practices that ensure engagement and focus on the employee as an individual, as well as part of a team and the company as a whole. In order to find the correct solution, we should first ensure we are asking the right questions, identifying what we want to achieve and reflecting on the journey that will take us there. In short, engaging engagement.

Getting engagement right

PURPOSE Spiritual

RENEWAL Physical

VALUE Emotional

FOCUS Mental


The Harvard Business Review [10] conducted a survey to identify what obstacles stand in the way of workers being “satisfied and productive at work.”

They identified four basic needs that need to be met in order for employee engagement to happen – the ingredients to achieve a solid base upon which a company can build engagement.


PURPOSE – purpose is both what the company is for and does and what the employee’s role is in that. What is the end goal? Making more stuff, doing it faster, doing it well, making a difference? Being able to put a finger on what your business’s purpose is will allow you to employ people who share the same vision and passion. Employees who derive a sense of purpose from a job are far more likely to be engaged, reducing attrition.

VALUE – employees often feel taken for granted and undervalued. Not only does reward and praise increase engagement, but it fosters innovation and a desire to do more. Valued employees are more emotionally invested in the company they work for, they go the extra mile because they want the company to do well and it becomes a positive feedback loop where the company and the employee thrive on each other’s success. Often simple acknowledgement and recognition is incredibly motivating.

RENEWAL – 9–5 has been replaced by 24/7. Technology means that employees can troubleshoot from every corner of the world, or respond to emails in the bath. This is convenient, but it can lead to stress and a sense of being permanently on the job. A company that tracks employees’ time and encourages healthy working practices will foster engagement. Ensuring regular breaks, both during the working day and annual leave, will promote creativity, productivity and motivation and these are things that a good human experience management system will do.

FOCUS – being able to focus on a specific task at a specific time is becoming rarer and rarer in the workplace. As workers make calls on the train, supervise a team they are working in, or have work coming in while they are trying to finish what they are doing, their focus is displaced. Managing workflow and dedicating time to be able to focus is something that a human experience management tool can help with. Devoting attention and intention to a specific task is satisfying, so it promotes engagement, but it can also be more productive too. Another case of using a system to ensure that employees are happy working smarter, not harder.

Being mindful of satisfying these employees’ basic needs will help organisations narrow the gap between how many employees they think are engaged at work, and how many actually are.


Employees also need to feel engaged constantly – engagement should be a permanent state of being, rather than sought reactively or remedially. Doing what is necessary for employee engagement should not just be an adrenaline shot when engagement drops to suboptimal or even critical levels. Engagement peaks and troughs are unsettling and exhausting for staff and employers; consistency and constancy make for a happier and more productive workplace.

Companies need a tool that can record and measure experience data – how employees are feeling and what they are thinking. How do these feelings affect their actions and what gaps need plugging? Companies need a tool that can measure this data, often called experience data, and can integrate it with operational data from different silos, manipulate them both and use tracking algorithms to track and measure engagement and flag gaps and areas for development to management.

The Harvard Business Review found that: “... when employees at a company perceive that any one of their four needs has been met, they report a 30% higher capacity to focus, a nearly 50% higher level of engagement, and a 63% greater likelihood to stay at the company.”

The report also studied cumulative impact as additional needs are satisfied, finding that: “…the cumulative positive impact rises with each additional need that gets satisfied. For example, when all four needs are met, the effect on engagement rises from 50% for one need, to 125%.”

In effect, organisations need a human experience management system, a powerful tool that would measure and report on engagement, while remaining tailored to each individual. Having it open on the desktop, or in an app would be as natural as having your email running, because it would be personal and designed to be user-friendly and straightforward to interface with.

A 9–to–5 work day came in with the industrial revolution, but the advent of the internet, wifi and smart technology means it’s on the way out. Many businesses are 24/7 and employees often check emails at the weekend, finish a report after supper or have a conference call before heading into the office. Indeed, smart technology means that more work can be done outside the office and rather than this being a case of employees grinding away, it’s a case of working smarter, not harder. Any human experience management system should reflect this, allowing employees to quickly flag a training need, keep a manager posted about a positive or negative outcome or indicate they need help, without jumping through a long-winded series of pages or grappling with a counter-intuitive set-up.

…constancy makes for a happier and more productive workplace


Doing it wellThere are numerous ways a successful human experience management system would foster engagement and employee happiness – far too many to detail here, but here are a few ideas to consider when choosing a system...



• A sense of belonging – all the employees feel this is their company and they are invested in its outcomes and future.

• People-focused leadership style – people-oriented, rather than task-oriented. This means participative decision making processes, encouraging and valuing staff suggestions and inviting innovation and creativity.

• Reduction of top-down internal communication culture – a move away from information dissemination towards strategic enablement where communication is concerned will change the way employees see communication. Rather than the focus being on house presentation and timing, looking at communication more strategically will align them with the company’s business direction. Enabling bold communication methods will ensure communications stay fresh, while helping to drive employee engagement. Open communications will also mean that the corporate voice of an organisation invites all employees, at all levels, to contribute to the conversation, ensuring they feel valued and able to participate and helping to foster engagement, as well as limiting harmful gossip.

• Knowledge sharing – according to International Data Corp, Fortune 500 companies lose around $31.5 billion per year simply by failing to share knowledge within the organisation [11]. Staff need to be able to communicate knowledge clearly and efficiently with both their team, peers and management. An HXM system will support knowledge-sharing, helping to keep track of who knows what, whether workers are on or off site, making it easy for communication to flow. As well as fostering engagement, proper, backed-up knowledge dissemination will mitigate the risk of losing proprietary information should employees move on.

• Employee voice – companies should look for an HXM system that promotes employee voice. As workers use the system, feeding back on their performance, expressing training desires or learning points, they are generating a voice. An HXM system that facilitates channels for feedback and discussion ensures that staff feel their voice is genuinely heard and they feel invested in the company.

• Silo reduction – a good system will be data-greedy, vacuuming up as much information as possible and cross-referencing it within an algorithm. Companies should look for a system that breaks down silos, rather than using data in discrete bundles.

• Company-wide buy-in – a good human experience management system will be designed for the whole company to use, from the top down and include senior leadership, people managers and the employees themselves.

• Paying it forward – speculating to accumulate, but by investing in people rather than schemes. Paying it forward, like speculating, is a risk; you do something for someone in the hope they’ll do something for you, or for someone else, but it’s by no means guaranteed. Many companies do this on a small level, a Christmas party, for example – there is no guaranteed reward for the company, but it fosters goodwill and wellbeing as well as relationships between staff. This can all be reflected in how engaged the worker goes on to be, how much they enjoy their job, the effort they put in, how they advocate for the company, how they deal with customers, &c. A human experience management system can encourage employees to nominate others for praise or reward, or reward the individual by making it easy for them to receive feedback and praise from a line manager. Teams can be rewarded in the same way.


• Understand individual learning styles and preferences – how do employees learn best? Some prefer collaborative learning, some an online tutorial. A HCM system will let you track who prefers what and tailor dissemination.

• Encourage collaborative working – cohesive working and collaboration brings flexibility to a team and an ability to roll with the punches. Whether it’s a rewritten brief, moving goalposts or changing deliverables, teams that can work together to adjust are more flexible and responsive. This is the same for workers with lone responsibility, who will gain strength from collaborating with those above and below them.

• Track and measure what influences behaviour at work – from interactions to management, from communication to responsibility and from job culture to tenure, these are all factors which influence employees’ behaviour at work. The employees themselves also have factors which influence their work behaviour, including self esteem, personality, intellectual ability, physical ability and demographical and biographical characteristics. With so many variables affecting engagement, businesses should be seeking a tool with a degree of machine learning and algorithms that can unpick these factors, find out what works well and deploy it. This will increase engagement across the whole establishment.

• Team structure – your team at work is your work family. Not your actual family, obviously, but a structured group that collaborates and supports each other. Being part of a team can help employees feel valued, trusted and respected, as well as promoting security and self-consciousness. Supportive teams lessen stress and isolation and foster creativity. A good human experience management tool will allow quick and easy

communication to flow throughout the team, as well as up and down the management chains, as well as helping the team to share good practice and ideas, both among the team and between teams. This all benefits the company and promotes engagement.

• Neurodiversity – using a human management experience system means that reporting is focused on individuals, rather than a best-fit model. More than 80% of people on the autistic spectrum are unemployed

[12] as standard recruitment processes often exclude them. However, companies that encourage applications from both neuro-typical and neuro-atypical people will benefit from a whole range of talents. This will allow more neurodiversity at work, fostering tolerance and inclusion, as well as creativity.

• Part-time workers – making up a significant part of the workforce, part-time workers often work below their skill level, meaning they are not as productive. The part-time nature of their work means they can miss out on opportunities, as well as training, as well as the company missing out on contributions from them. A human management experience system will keep track of these things, make flexibility easier to put into place and ensure that part-time workers are fully appreciated and engaged. A UK Government study found that 41% of women in employment were working part-time compared with 13% of men [13]; this creates gender-based pay and skills gaps that can cause unhappiness and dissatisfaction at work. A HXM system would be able to track and flag up these gaps, helping employees to make rapid progress towards their correct level and would also remove obstacles to engagement.


A UK Government study found that 41% of women in employment were working part-time compared with 13% of men [13]


93% of millennial workers report that a business having up-to-date technology is an important factor when choosing a workplace [16]


• Flexibility – a flexible approach to employment doesn’t just benefit part-time workers. A study by researchers at Stanford found that companies who allowed degrees of flexibility in the workplace benefited from engaged employees who achieved more, were off sick less often and were happier in their work [14]. Flexibility can include varying start and finish times, booking leave, scheduling meetings, working from home, &c. A smart HXM system would allow employees to have this flexibility at work, while integrating them with the rest of their team, their line manager and the company as a whole. As previously discussed, business has moved from 9–5 to 24/7. If employees could log on to the HXM system from home, or through an app, they could be truly flexible, responding to both their own and the company’s needs – they could be proactive, rather than reactive, allowing a greater sense of control, which would in turn lead to a more outcome-focused approach. These things all lead to engagement.

• Men / Women – the workplace experience will not be identical for all employees. While levels of engagement tend to be the same for both sexes, the factors that influence engagement can vary. The machine learning in an HXM system will allow companies to dive deeper into any disparities, ensuring that engagement isn’t impacted by any differences.

• Non-employees – “Nearly 38% of the global workforce can now be considered ‘non-employee’, which includes contingent workers, freelancers, gig workers and temporary staff – an increase of 30% over a five-year period,” [15]. Any HXM system used by a company must reach out to and include non-employees. Their productivity is as key as that of employees and an HXM system will keep communication lines open, foster encouragement and ensure products and results are valued. In this way engagement will be generated across all facets of the organisation.

• Technology expectations – there is a widening gap in technology expectations as the incoming workforce gets younger. Companies have invested in technologies, in terms of both cash and time, but the issue intensifies as the expectation gap of the incoming workforce widens. 93% of millennial workers report that a business having up-to-date technology is an important factor when choosing a workplace [16]. Investing in a cutting-edge HXM system ticks those boxes, not only being at the forefront of workplace technology, but tracking how technology is used throughout an organisation, allowing it to be flagged for updating where necessary.

• Unconscious bias – this can be more prevalent that companies realise, influencing decisions about recruitment, promotion, staff development and recognition. It can lead to a less diverse workforce and foster division and unhappiness, rather than engagement. The algorithms in a good HXM system will uncover unconscious bias, helping to drive a programme of celebrating commonality and honouring differences, leading to promoted engagement and a happier workforce.


Key principles to close the loop“Don’t judge each day by the harvest you reap but by the seeds that you plant.”ROBERT LOUIS STEVENSON

Many businesses moved from an inside-out way of thinking where processes and products were focused on, rather than the customer, to an outside-in perspective which meant putting the customer first, and designing processes and products with them in mind, listening to them and basing decisions on their needs.

The next step, and the one that will promote engagement is outside-in 2.0 – putting the employee at the centre of the decision process. Each employee-centric decision will reap rewards in the future as engaged workers thrive and grow and ensure the company does the same.

• Flip the outlook – employee engagement means that rather than the people succeeding because the company succeeds, the company succeeds because the people are succeeding. Put the employees first and the rest will follow. Find a system that will support and work with this new culture, tracking and flexing with employee needs.

• Nurture not management – foster good communications, involve employees in decision-making, strive to improve employee experiences at every moment that matters and track and record these. Find a tool that can help you manage employee experience. Throw out Human capital management and bring in human experience management.

When an employee is engaged, going the extra mile becomes the normal distance. Some key principles for engagement:

• Lead from the front – only leaders can change the culture of an organisation; they have to be the change they want to see in the company. That means using HXM technology themselves and integrating it into management.

• Reflect the nurture – engaged employees give their metaphorical blood, sweat and tears to a company. If a company nurtures them, they will nurture their customers, their colleagues and the company. Thoughtful, creative strategies can be a powerful means of demonstrating – through actions and not just words – that an organisation cares about supporting the needs of its people, whatever level they are at.

• Understand the benefit ripple – an engaged worker helps create an engaged team, engages positively with peers, management and, most importantly, customers. They become enthusiastic advocates for the company, subscribe to its ethos and strive for success.

• Thank-yous don’t come from the system – find an HXM tool that encourages human interaction – from a colleague saying ‘well done’, to a manager discussing a training need, a good system will prompt, monitor and record while allowing for human interaction.

When an employee is engaged, going the extra mile becomes the normal distance. Some key principles for engagement:



Human Experience Management – a blueprint for actionOrganisations should find a system that will help them do the following:• Always do more than the basics – remember, your

competitors don’t play by the rules.

• Keep one step ahead – your employees are growing and learning, a company and its resources should too.

• Be transparent – keep communications relevant, clear and open.

• Embed happy principles – foster engagement at all levels, in all areas, from minor team discussions to appraisals, and from booking leave to celebrating milestones.

• Ensure executive buy-in for maximum engagement and encourage meaningful connections.

• Be a catalyst for action and be proactive rather than reaction. Let’s solve problems before they happen.

There is a global inflection point when it comes to being employee-focused and leveraging engagement to everyone’s maximum benefit.Finding a system that will keep employees at the heart of our decision-making will ensure engagement becomes the vital ingredient it should be.


There is a global inflection point when it comes to being employee-focused and leveraging engagement to everyone’s maximum benefit.Finding a system that will keep employees at the heart of our decision-making will ensure engagement becomes the vital ingredient it should be.


[1] Knowledge-Worker Productivity: The Biggest Challenge – Peter F Drucker, 1999

[2] Historical analysis of national subjective wellbeing using millions of digitized books – Thomas T Hills, Eugenio Proto, Daniel

Sgroi & Chanuki Illushka Seresinhe, Nature, 2019

[3] Reimagining and redesigning – SAP SuccessFactors – 2019

[4] Engaging Employees – Shelley Pleiter, Smith Magazine, 2014

[5] State of the American Workplace – Gallup, 2017




[9] State of the Global Workplace – Gallup, 2017

[10] The Power of Meeting Your Employees’ Needs – Harvard Business Review, 2014

[11] Shedding Light on Knowledge Management – Pamela Babcock, HR Magazine, 2004

[12] Autism at Work: Encouraging Neurodiversity in the Workplace – SAP, 2019

[13] Women and the Economy – Parliament UK, 2019

[14] Working From Home – Bloom, Liang, Roberts & Ying, Quarterly Journal of Economics, 2014

[15] Digital Infrastructure And Agility Are Needed To Enable Tomorrow’s Workforce – Mehmood Khan, IAfrikan.com, 2018

[16] Four Secrets to Success for Attracting and Retaining Millennial Talent – Cindy Bates, Microsoft, 2017

Why valuing your employees is the most valuable decision ......The management guru Peter Drucker...

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