NOW IN OUR 3 rd YEAR HARVEY NASH HR SURVEY 2012 IN SEARCH OF ENGAGEMENT

Transcription

1 NOW IN OUR 3 rd YEAR HARVEY NASH HR SURVEY 2012 IN SEARCH OF ENGAGEMENT

2 Contents 1. Foreword 3 2. Executive summary 5 3. Regional results 7 4. Country and regional profiles 4.1. Ireland Switzerland Netherlands United Kingdom 36 2 Harvey Nash HR Survey 2012

3 1. Foreword Taking the pulse of HR leaders across Europe Now in its third year, the Harvey Nash Human Resources Survey provides in-depth insight into the rapidly evolving role of HR, as well as the senior people who work in this increasingly important function. Reflecting the views of hundreds of HR directors, CHROs and HR executives from across Europe, the survey looks in detail at the issues that matter to HR leaders: from priorities of the Board, to the tactics used to deploy leading HR programmes, to how HR professionals themselves are planning their careers. This year s survey, launched in Europe s fifth year of economic turmoil, looks in detail at the role HR is playing in supporting companies through difficult times and asks the question Is HR ready for the economic upswing? It s an important question. Whether upturn or downturn, HR has a key role to play; as one HR Director said to me whether it s good news or bad news, it s HR s job to deliver it. Most of the participants to this Survey prepare for the upswing of the economy by putting Employee Engagement top of the list of the areas they need to work on; they are in fact In Search for Engagement. Thank you to everyone who took time to complete the survey. Without you this report would, literally, not be possible. We are also indebted to Dirk Jan Verheijen PhD, who assisted us in preparing the questionnaire and who provided an in-depth analysis on key sections of the report. In addition we would like to thank our partner Betula Services for their ongoing support. I hope you enjoy reading it and find the results valuable in your business operations and career planning. Roland Steenvoorde Managing Director Executive Search Harvey Nash Nederland Harvey Nash HR Survey

4 3. Global results Now in its 3rd year, the Harvey Nash HR Survey is one of the largest and longest established reports of its kind. Representing the views of more than 150 HR leaders across Europe it is a unique insight into the shape of HR. HR Strategy Aligned with business strategy: Supports the growth of the business Increases performance of employees Keeps costs under control Involves business continuity Measuring Effectiveness Top 10 Short term Priorities of the CEO and board Recruitment Management Development Leadership Coaching Retention Training & Education Capability & Competence Management Employee Engagement Talent Management Connect People Measure Outcome not activities About the participants Almost 50% report to CEO, 16% to other c-level. 25% have global responsibility They come from (mainly): Belgium, Ireland, Switzerland, The Netherlands, and the United Kingdom And are from the following sectors: Technology (26%) Financial Services (11%) Manufacturing (10%) Professional Services 9%) Retail 7% Labour Market Aging Diversity Education Employer Branding Flexibility Recruitment Pre-Employment Screening HARVEY NASH HR SURVEY 2012 KEY FINDINGS Workforce Employee Engagement Communication Employer Branding Retention Woman in HR 49% of the respondents are female Human Capital Management Strategic Workforce planning Talent Management Skill development Performance Management High Performance Culture HR Careers 32% are less than 3 years with current employer; 40% 6 years or more. 80% is satisfied with remuneration. 88% have no aspiration outside HR. 81% finds interesting and exciting work important 4 Harvey Nash HR Survey 2012

5 1. Executive summary 2. Executive summary About the participants Hundreds of HR Leaders took part in this, the third, annual Harvey Nash Human Resources Survey. Almost half of participants (47%) report to the Managing Director or Chief Executive, and almost two-thirds (62%) are the top most decision maker in HR. The most common job title was Director, VP of HR or Head of HR. One third (34%) have a national remit and a further 51% had multi-national or global responsibilities. Participants came from Belgium, Ireland, Switzerland, The Netherlands and the United Kingdom as well as a smaller number from other European countries as well as Asia. The CEO and Board see HR as a growth enabler Despite challenging economic times, HR s primary role is still a proactive one. The top three Board priorities management development, talent management and leadership coaching all focus on HR s ability to build value through developing people. Conversely, HR s more re-active responsibilities, such as creating policies, providing legal advice or managing downsizing projects, are much lower down the table. It suggests that even in difficult times, the CEO and Board are seeing the primary role of HR as helping growth, rather than managing costs or process. One particular example of growth is recruitment. And when looking purely at the short term, recruitment is the Board s number one priority, with 56% looking to bring on board new talent in the short term. Compared to last year s survey recruitment has experienced the biggest jump in importance, reflecting a more positive sentiment towards growth. Measuring the effectiveness of HR strategy The vast majority 90% of companies use metrics of some kind to measure the effectiveness of the HR function. Staff turnover, employee engagement and retention are the primary measures (72%, 62% and 62% of participants cited these as important). In just under two-thirds of organizations in this survey some form of remuneration was added to incite HR management to outperform on strategic goals. Labour Market Aging and diversity The world s population has reached seven billion, and its growth rate is slowing down. At the same time, a stunning demographic revolution, mostly brought about by the falling fertility rate and increasing life expectancy, is underway worldwide. It is therefore remarkable that almost half of organizations are not prepared yet and the majority of the organizations see no effect of a decision to raise "Most companies have no plans to significantly reduce the proportion of permanent staff" the retirement age. Though many organizations have implemented diversity management, the majority are still not taking a pro-active approach. Recruitment In the past, to recruit employees, originations would simply advertise opportunities in the local press, engage a recruitment consultant or, more recently, post jobs online via the company website or popular job boards. This passive approach, many claim, is on the way out. With recruitment being a short term management board priority many are turning to more pro-active means, such as actively engaging candidates on social media. Flexibility in the workforce Flexibility has become a mature item on the HR agenda. Over 60% of respondents in this survey value flexible labour as a strategic part of their modus operandi. That said, almost onethird turned to flexible labour not for strategic reasons, but because they could not find the skills using permanent hiring. Although most companies have embraced a flexible workforce, most 70% have no plans to significantly reduce the proportion of permanent staff. Social Media With hundreds of millions of users talking, participating, sharing, and networking online, social media has become a key concern to HR; 85% of participants believe it is important to employer branding, and 65% of the organizations have implemented guidelines for the use of social networks. Harvey Nash HR Survey

6 1. Executive summary Employee Engagement In a period of economic uncertainty - when both companies and employees are collectively hunkered down to get the job done staff retention and engagement tends to drop down the priority list. But as the economy rebounds and choices open up for people, many are likely to consider moving to another employer. At that point, emotional engagement may be the only thing helping retain those people most critical to the business. It is therefore no wonder that to prepare for the upswing of the economy, 62% of the organizations have put Employee Engagement top of the list of the areas they need to work on. "The top board priorities focus on HR s ability to build value through developing people" Communication The most favourable way for HR to communicate with employees is to enter into a dialogue (96%). Many other tools are used, the most traditional ones (personal meetings, meetings, presentations, newsletters) are still the most popular ones. Human Capital management & strategic workforce planning Three per cent of the respondents in this survey note that there is no gap between the needed workforce and the current workforce. However approximately half of the organizations represented in this survey have a talent management program and just under 21% of this group has a program for high value specialists. In only 67% of the companies a learning and development culture is in place. Just over 64% has a strong performance appraisal culture. June 2012, Harvey Nash Betula Services Dirk Jan Verheijen PhD 6 Harvey Nash HR Survey 2012

7 Harvey Nash HR Survey

8 3. Regional results Priorities of the CEO and board We asked participants what the board was expecting of them when presented with a list of 27 possible priorities. Exhibit 1: Priorities for the board Priority Management development 97% Talent management 96% Leadership coaching 95% Capability & competence management 94% Employee engagement 91% Organizational development 89% Performance management 89% Employee retention & motivation 88% Training & education programme 87% Knowledge 83% Recruitment 81% Measure outcome, not activities 80% Connect people 73% Deployment of social media 70% Job evaluation and reward programme 68% Mobility 62% Diversity 56% Labour market communication 56% Flexible employment (time and place) 54% Executive compensation 51% Health & welfare policy 51% Flexible employment (temporary versus permanent contracts) 51% Speak the language of the business 50% Safety 45% Shared service centre 32% Downsizing 31% Works council 23% Other 12% Looking lower down the table it is evident that another traditional role of HR that of policy creator and legal advisor is significantly less prominent. Health & welfare, safety, downsizing and works council are all toward the bottom of the table. The priorities change radically when looking purely at the short term, as Exhibit 2 shows. Exhibit 2: Short term priorities of the board top 10 60% 50% 40% 30% 20% 10% 0% 56% 52% Leadership coaching Recruitment Management development 49% 48% Training & education progr... Employee retention & motiva... Capability & competence ma... 45% 44% 44% 43% Employee engagement Talent management Connect people 40% 40% Measure outcome, not activities When looking purely at the now, recruitment is the board s number one priority, with 56% looking to bring on board new talent in the short term. Compared to last year s survey recruitment experienced the biggest jump in priority, clearly reflecting a more positive sentiment towards growth. Interestingly, the top five priorities can loosely be classified as investing in people ; a clear indication that companies are increasingly looking for direct, highly visible ways to augment and improve their workforce. "Recruitment experienced biggest jump in priority compared to last year" As Exhibit 1 shows, the board priorities for the HR team focus very much on HR s traditional strengths of helping shape the development of talent within the organization; the top three management development, talent management and leadership coaching highlight this. 8 Harvey Nash HR Survey 2012

9 Strategy The HR Strategy is about building and strengthening the competitive advantage of the organization on the market. It is about increasing the overall performance of the organization and utilizing the skills and competencies of employees. The fact that no less than 96% of the respondents participate in defining and shaping the company-wide business strategy underpins the importance. However in order to be ready for the upswing of the economy some more needs to be accomplished as there is still quite some room for improvement signalled, up to no less than 40% of the participants indicate that the part whereby the goal is to increase the performance of the employees can be improved. Exhibit 3 To what level is the HR strategy aligned with the business strategy Does the HR strategy support the growth of the business? Does the HR strategy increase performance of the employees? Does the HR strategy keep the costs under control? Does the HR strategy involve business continuity? Yes Room for improvement Not applicable 68% 29% 2% 58% 40% 2% 58% 39% 3% 54% 39% 7% "96% of the respondents participate in defining and shaping business strategy" If one takes a close look at all the main elements that are part of the responsibility of HR, culture, organization, people, and the HR systems, some noticeable areas of improvements are signalled by our respondents: With respect to Culture, the fact that there are not enough appropriate leadership skills (15% yes, 42% mostly and no less than 43% not enough) is worrying as the aim of leadership development is about growing new potential leaders for the organization and as such a vital part of the HR Strategy as Human Resources has a shared responsibility in finding and developing new leaders for the organization which is by nature a lengthy process. Do people feel part of the organization and its results? Do people have common interests? Yes Mostly Not enough 46% 40% 13% 37% 50% 14% Is there a strong team spirit? 42% 45% 12% Is work allocated on the basis of individual experience? Are there sufficient skills/ power bases? Are there appropriate leadership skills? Are people encouraged to say what they think? Does the organization encourage innovation and creativity? Do people feel a sense of personal responsibility in their work? Is quality emphasized in all aspects? Do people take pride in their work? 35% 54% 11% 23% 59% 18% 15% 42% 43% 43% 39% 17% 46% 32% 22% 54% 37% 9% 45% 44% 11% 53% 40% 7% Harvey Nash HR Survey

10 With respect to the organization a structure that is not flexible enough in the face of changing demands (such as the upswing), too complex (27%) whilst 30% indicates that the structure does not tend to resolve problems at the point where they occur. Do people have clear roles and responsibilities? Is the structure flexible in the face of changing demands? Does the structure encourage effective performance? Yes Mostly Not enough 37% 51% 12% 33% 37% 30% 29% 52% 19% Is the structure too complex? 27% 30% 43% Does the structure tend to resolve problems at the point where they occur? Do procedures and management practices facilitate the accomplishments of tasks? 23% 46% 30% 20% 57% 23% With respect to people 32% indicate there is room for improvement in spotting and developing the potentials, and 23% a lack of communication on the business strategy. Yes Mostly Not enough Also in the area of HR Systems there is room for improvement: 30% finds them not consistent enough, 30% signals there are no rewards for effective performance whilst 28% believes their system does not encourage effective performance. Methods to manage HR Strategic goals Exhibit 7: Which methods are used to manage HR strategic goals? 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% SMART goals 88% 87% 12% 13% Key performance indicators 63% Personal reward system for... It is interesting to see that HR uses predominantly SMART goals and KPI s for strategic goals, when you would normally find that more on a tactical level. It usually is difficult to translate strategic goals into practical activities and align their goals so the strategic goal is met. 37% Balanced Score Card 60% 40% 25% Other 75% Yes No Are they encouraged to perform well? Do they have a customer oriented orientation? Do they have clear goals and objectives? Do they know what their expected performance standards are? Are they aware of the business strategy? Are people with potential spotted and developed for the future? Do they have the necessary skills and knowledge? 48% 39% 12% 46% 37% 17% 39% 45% 16% 38% 47% 15% 36% 40% 23% 33% 34% 32% 29% 64% 7% You get more of the behaviour you reward. You don t get what you hope for, ask for, wish for or beg for. You get what you reward. Michael le Boeuf 10 Harvey Nash HR Survey 2012

11 80% 70% 60% 50% 40% 30% 20% 10% 0% Exhibit 8: What are the categories of HR Metrics in the organization? Turnover 70% Employee engagement 62% 61% 58% Retention Recruiting efficiency Employee attendance 51% 50% Rewards system and measur... Employee productivity Important measurements are turnover and employee engagement. Whilst employee productivity scores just under 50% being the 7th highest rated HR KPI. Higher ranking KPI s score more on the HR function with the clear exception of turnover, almost 70% of all companies rank their HR professionals on turnover, showing a significant alignment with business and HR goals. Only 7% of the respondents use other metrics. This leads to the conclusion that the strategic goals of most organizations are based on the described categories. In the previous question almost 90% of the organizations use KPI s and the categories in this question are the metrics that they use. Most organizations are more concerned about the quantitate aspect of employee management, turnover and retention, then the qualitative aspect, productivity. 45% Communications 30% 1% 7% None Other, please specify Ulrich s Roles Model David Ulrich defined a HR Roles model which is known for contributing to the start of the movement from the functional HR orientation to the more partnership organization in HRM Function. The acclaimed benefit is a more responsible and flexible organization of Human Resources, which allows to many HR Professionals to become real respected business partners No less than 2/3 of the participants are dealing with this model: 16% of the participants have the model fully operational, 43% are working on it, and another 9% are thinking about it! The acclaimed benefits are fully experienced by 18%, while another 75% is experiencing benefits to some extent (already). 60% of the organizations have (partly) implemented Ulrich s model 93% of them are experiencing benefits Whatever is measured, one should consider that: Organizations measure what they treasure. What gets measured gets done. Critical metrics have an owner. To have value, metrics should have a target to be compared to. Organizations measure what they treasure Harvey Nash HR Survey

12 Labour Market Aging Due to declining populations and a lack of younger workers, EU economies and Eastern European economies in transition face a decline in labour supply. Without dramatic and immediate changes in either birth or immigration rates, workforces in Germany, Italy, Spain and many other EU countries could decrease significantly over the next couple of decades. "Workforces in EU countries could decrease significantly over the next decades" Slightly over 50% of the participants feel that their organization is prepared for the effects of this revolution while as a consequence close to 50% is not prepared yet. Raising the retirement age will have a positive effect on 20% of the organizations, while 22% indicates it would have a negative effect. The majority of the participants see no effect of such a decision. Diversity Over 50% of the participants indicate they simply focus on hiring the best. About 1/6 of the participants indicate they have diversity management implemented to apply to legislation. Another 1/6 to be more balanced in terms of customer representation while the remaining 1/6 see other benefits for diversity management. "Diversity Management: The majority simply hires the best" Education Last year over 80% of the respondents ranked their country s education system with a good degree of confidence. 10% ranked their college level education ineffective and 12% thought that about their academic level of education. This year the respondents were less positive. The academic level were found ineffective by 22% of the respondents, the college level even 24%, while other education was ranked ineffective by no less than 34% of the respondents. So in all 3 situations almost twice the number of respondents found the country s education in all 3 levels ineffective! "Less confidence in the country s Education system compared to last year" Employer Branding In an era of dwindling demographics, companies and organizations are trying to attract people and to convince them to become employees. They tend to use many Human Resources Marketing techniques to do so, one of them being Employer branding. It defines the personality of a company as a preferred employer. This process is similar to managing a brand in product or services marketing. Why should anyone join the company (instead of any other company) is the basic question addressed. On top of that it is leading in generating strategies for retention and motivation. The fact that Intranet News ranks No. 1 in the column Very Important and Intranet collaboration No. 3 is proof of the latter. Exhibit 9: How important are the following in your Employer Branding efforts Very important Quite important Not important Intranet news 50% 38% 12% LinkedIn 37% 43% 20% Intranet collaboration 36% 39% 25% Twitter 18% 32% 50% Corporate blogs 17% 36% 47% Facebook 15% 33% 52% Employee blogs 12% 33% 55% Influencer blogs 11% 27% 63% YouTube 11% 24% 65% Micro blogging 8% 25% 68% Flickr/SlideShare 4% 14% 82% "Main purpose of Employer branding often retention and motivation" Another remarkable series of answers are the use of Social Media. Except for LinkedIn with 20% Not Important, they all rank 50% and up Not important! In fact from the answers given one might easily conclude that Employer Branding is performed on the corporate website or outside the internet 12 Harvey Nash HR Survey 2012

13 Flexibility Flexibility of Labour is about permanent, temporary and knowledge. How do organizations deal with the labour market flexibility and strategic human resource management? The flexible labour market is seen as vital for the development of our economy. Independent professionals, with specific knowledge, skills that may be hired for a limited period, have developed into a major player in the labour market. There is talk of a quiet revolution of entrepreneurship. Companies call for further flexibility to compete with other countries. What are the current developments in the area of flexibility? What does strategic flexibility mean for staff and talent management? Exhibit 10: What situations are applicable in case of using flexible staff? 70% 60% 50% 40% 30% 20% 10% 0% Strategic: we want a certain portion of our workforce to be flexible 61% 58% Operational: some specialism are only needed temporarily The crisis has had its impact on HR s views on flexible labour as more respondents view flexible staff as a strategic choice with hiring specialists a close second. It is remarkable that in a time of increasing unemployment 32% still find it difficult to fulfil certain positions with internal staff. Exhibit 11: Type of employment offered for new hires None 1-10% 32% Market: some functions are hard to fulfil with internal people 11-25% 6% None, we don't have flexible staff 26-40% 1% Other 41-50% 51%+ Payrolling is increasing, but not as widespread as labour unions fear as almost 60% of the respondents do not offer Payrolling contracts. With increasing flexibility almost all companies still offer permanent contracts to new staff. Exhibit 12: Proportion of the current workforce that is flexible None 1-10% 11-25% 26-40% 41-50% 51%+ Payrolling 62% 25% 6% 1% 1% 5% Staff from agencies Temporary contract 23% 53% 14% 6% 2% 3% 17% 45% 25% 8% 3% 2% Contractors 14% 59% 18% 4% 4% 1% Permanent contract 13% 10% 1% 3% 5% 67% Contractors have surpassed staff from agencies as the predominant flexible labour in companies. This matches the growing trend for individuals offering their own labour to companies. As flexible labour is for almost 90% a strategic choice the results of this question lead to the conclusion that organizations mostly choose to have only a small percentage (<10%) as flexible labour with the usual maximum at 25%. Only a very small percentage of companies decide on a predominantly flexible workforce. Almost 90% of the respondents are aware that a flexible workforce requires a different way of working for HR. Noticeable is that almost 60 % of the organizations deal with specialised labour where small companies are the primary force in the market, either through the ability to support business or low cost propositions. Payrolling 59% 22% 6% 4% 5% 4% Staff from agencies 19% 59% 14% 6% 1% 1% Contractors 13% 63% 15% 6% 1% 2% Temporary contract Permanent contract 4% 39% 24% 14% 8% 12% 3% 10% 2% 6% 9% 70% Harvey Nash HR Survey

14 70% 60% 50% 40% 30% Recruitment The recruitment process has become the Flagship of an Employer s brand. Slow or malfunctioning processes cannot only lead to missing new hires but can also damage the employer s image on a long-term basis. Important factors to consider are fairness, innovation, difficulty, usability, and transparency. "Corporate Website No. 1 tool to attract active candidates; Printed Adverts on the decline" Exhibit 13: The importance of the following tools in your recruitment strategy 58% 36% 53% 33% 39% 39% 39% 48% 37% 45% 26% 53% Very important Quite important 30% 33% Pre-employment screening Regardless of the size of a business, pre-employment screening has become a necessary hiring practice to avoid costly hiring mistakes. Gone are the days of a simple reference check and a few phone calls to screen new employees. Amid security concerns, corporate scandals, and workplace violence, pre-employment screening has been gaining ground: 49% of the respondents indicate they perform a detailed analysis of work and education history (up 9% from last year). "Pre-Employment screening is gaining ground" A Statement of Conduct is asked in 20% of the cases (down 2%), and a financial investigation is performed in 8% (up 1%). 20% 10% 10% 7% 0% Corporate website Online job boards Employee referral program Personal network of the recruiter Social media Recruitment companies Alumni program Printed adverts In this survey, the corporate website is considered not important by 6% of the respondents only, and thus the most important mean to get new people on board. On the other side of the spectrum we find printed adverts with 60% of the respondents considering this way to find new hires not important (anymore). The 2nd important tool on the list is the personal network of the recruiter explaining the importance to locate passive candidates, this nonetheless of the importance of job boards to find active candidates on the 3rd place of the list. When asked for specific tools to attract millennials, internships are on top of the list with 52%. Campus recruitment is No. 2 and Social Media are No % does not use specific tools to attract millennials. 14 Harvey Nash HR Survey 2012

15 Social Media Social Media essentially is a category of online media where people are talking, participating, sharing, networking, and bookmarking online. Exhibit 14: The importance of Social Media in relation to the following: Build and leverage networks Vacancies publication Source of candidates Not important Important Very important 17% 61% 22% 21% 59% 19% 23% 56% 21% Employer branding 15% 56% 29% Research tool 26% 55% 20% Employer transparency 29% 54% 17% Policies and Guidelines for the use of Social Media A Social Media Policy document helps to: Establish a set of guidelines for all employees when using Social Media sites Ensure employees understand their legal responsibilities when interacting online Ensure employees understand their responsibilities when writing about the company, its products or services, on their personal blogs, Facebook pages and Twitter accounts Other goals include increasing brand awareness, finding new markets, and positioning the company as a thought leader. 65% of the respondents have indicated such a policy is in place while another 13% is thinking about it. "Guidelines for the Use of Social Media are inevitable" It is at least remarkable that 17% of the respondents feel Social Media are not important to build and leverage networks. 21% feel they are not important if it comes down to publication of vacancies while to 23% they are not important as a source of candidates. The latter is quite a high percentage given the fact that 34m+ Europeans put their profile on LinkedIn alone. "Social Media become increasingly important" Social Networks are dominant if it comes down to Employer Branding: 85% of the respondents believe them to be important or very important! When asked for what other purposes Social Media are used a wide variety of purposes are given such as branding, business growth and reach, corporate communications, internal collaboration, public relations, recruitment, sharing knowledge, social enterprise and innovation, to communicate, discuss and share thoughts, and many, many more. Harvey Nash HR Survey

16 Employee Engagement In today s business we accept the premise that an engaged workforce is essential for the success of the company. Therefore in this chapter of the survey we are identifying the factors that correlate with high employee engagement levels and fine-tune strategies for improving scores. A truly engaged company is a high-energy environment in which employees do everything they can to ensure its business success. Engagement means generating passion and pride in the work force, finding the right fit for each individual to bring out their strengths. But to ensure that employees stay engaged and energized, we need to know what we can do for them, how we can help them to learn new skills, grow and meet new challenges. To put it more strongly: We want to know how companies make progress in their efforts to make the organization the inspiring, positive working environment that brings out the best in employees. "An engaged workforce is essential for the success of the company" Key findings Exhibit 15 shows respondents scores on the core questions of engagement. The emotional factors tie to people s personal satisfaction and the sense of inspiration and affirmation they get from their work and from being part of their organization. In our database we used questions related to your own reflection on the level of your engagement as well as related to the reflection on the overall level of engagement in the company from the perspective of the employees. Exhibit 15: Really believe in the future and values of the company Strongly agree Agree Disagree Strongly disagree I believe in our company values 49% 47% 3% 1% I believe the organization has an outstanding future 37% 51% 10% 2% Employees believe in our company values 26% 64% 9% 1% Employees believe the organization has an outstanding future 21% 60% 17% 2% Exhibit 16: Passionate and proud to work for the company Strongly agree Agree Disagree Strongly disagree I do my job with passion 48% 46% 6% 1% I am proud to work for the organization 45% 49% 4% 2% Employees are proud to work for the organization 34% 57% 8% 1% Employees do their jobs with passion 28% 58% 14% 1% Exhibit 17: The company inspires me to do my best work Strongly agree Agree Disagree Strongly disagree I am inspired by the vision of the organization 37% 52% 10% 1% Employees are inspired by the vision of the organization 19% 55% 25% 1% Employees are proud to work for the organization 34% 57% 8% 1% Employees do their jobs with passion 28% 58% 14% 1% 16 Harvey Nash HR Survey 2012

17 Exhibit 18: Sense of personal accomplishment from the job Strongly agree Agree Disagree Strongly disagree I matter, I can make a difference in the organization 47% 47% 5% 1% Employees believe they can make a difference in the organization 18% 57% 24% 1% Exhibit 19: Motivated by management to help my company succeed Strongly agree Agree Disagree Strongly disagree My manager engages our team and is a leader 31% 47% 18% 4% I trust our leadership 28% 59% 9% 4% Employees trust our leadership 14% 52% 33% 1% My manager brings the best out in me 25% 47% 24% 4% My manager helps me to develop and grow 23% 46% 25% 5% Employees feel valued 15% 50% 33% 1% Exhibit 20: The Company is a good place to work Strongly agree Agree Disagree Strongly disagree I am an ambassador for the organization and its products/services 53% 44% 3% 1% They are an ambassador for the organization and its products 21% 68% 10% 0% I enjoy going to work every day 33% 59% 6% 3% Employees enjoy going to work every day 12% 75% 12% 1% I feel the organization offers the perfect conditions for individual and team growth 12% 55% 31% 2% Employees feel that the organization offers the perfect conditions for individual and team growth 6% 49% 42% 3% The organization offers the r ight climate to develop my skills 23% 53% 21% 3% Employee morale is very high across processes 12% 50% 35% 2% Harvey Nash HR Survey

18 Exhibit 21 0% 20% 40% 60% 80% 100% (% may not add to 100 due to rounding) Really believe in the future and values of the company 2% 10% 56% 33% Passionate and proud to work for the company 1% 8% 53% 39% The company inspires me to do my best work 1% 14% 56% 30% Sense of personal accomplishment from the job 1% 15% 52% 33% Motivated by management to help my company succeed 3% 23% 50% 23% Would say our company is a good place to work 2% 20% 57% 22% Strong disagree Disagree Agree Strong Agree Exhibit 21 provides the evidence that, despite the rough and tumble of the economics recession, more than 90% believe in the future and values of the company. A key item is having a strong sense of personal accomplishment from one s job, 85% of respondents indicated that they matter, that they can make a difference in the organization. This factor is generally related to the relationship between the individual and the broader corporation; for instance, the extent to which employees understand their role, is relative to the company vision and its objectives. It s a combination of the will and the way. Full engagement demands both. Employees need the will: the sense of mission, passion and pride that motivates them to give the important effort. And they need the way: the support and conditions from the organization to act on their sense of mission and passion. In the overall rating 73% has favorable views about supervisory engagement. It suggests companies recognize the importance of the managerial role and helping equip managers with the skills and tools to become more effective in the key areas. Most alarming is that companies are, in general, still behind where they need to be inspiring people and providing the personal sense of engagement that count heavily in a meaningful work experience. Respondents overall ratings for leadership and managerial engagement show some points to consider: "Organizations are, in general, still behind where they need to be inspiring people" Management appears still to struggle with key leadership behaviours correlated to engagement. Our findings suggest leader s motivation can have a greater potential impact on engagement. Almost 1 in 4 employees tells us not to be motivated by management to help the company succeed, 1 in 3 employees (33%) does not feel themselves as valued. Still, employers have a long way to go. This is affirming how far managers have to travel to deliver a more inspiring and challenging work experience in their companies. Four levels of employee engagement While organizations are keen to maximize the contribution of each employee toward company s imperatives and metrics, individual employees need to find purpose and satisfaction in their work. Therefore consequently engagement focuses on individuals: contribution to the company s success and personal satisfaction. Full engagement represents an alignment of maximum job statisfaction ( I do my job with passion, with maximum job contribution ( I matter, I can make a difference in the organization ). Engaged employees are not just committed. They are not just passionate or proud. They have a line of sight on their own future and on the organization s mission and goals. They are using their talents and efforts to make a difference in company s drive for sustainable business success. The index we use to determine engagement levels contains items that reflect the two axes of contribution and satisfaction. "Despite the rough and tumble of the economics recession, more than 90% believe in the future andvalues of the company" 18 Harvey Nash HR Survey 2012

19 Level Description Strongly agree Agree Engaged Almost engaged High contribution and high satisfaction: These employees are at the top where personal and organizational interests align. They contribute fully to the success of the organization and find great satisfaction in their work. Medium to high contribution and satisfaction: These employees are among the high performers and are reasonably satisfied with their job. Disagree Strongly Disagree Fairly engaged Disengaged Medium to high contribution but low satisfaction. These employees are not achieving their personal definition of success and satisfaction and often feel themselve disillusioned. Low to medium contribution and satisfaction. The employees are feeling themselves underutilized, and clearly not getting what they need from work. Engagement: Your reflection 16% 54% 1% 29% Engaged Almost engaged Fairly engaged Disengaged Exhibit 22: Fewer than 1 in 3 employees are engaged. Nearly 1:5 (17%) are actually poorly engaged or even disengaged. In part, this speaks to the undeniable progress companies made in recent years in creating more engagement, although there is still a lack in motivating employees. Plumbing deeper into the more emotional aspects of engagement we see that just under 80% of the Region agreed that their company is a good place to work and, even better: almost 90% agreed their company inspires them to do their best work. Engagement: moving the needle The moderate and lower scores for elements of engagement in the area of leadership (motivated by management) pose some risk for employers: the impact of employees dissatisfaction with various aspects of leadership and the lack of developmental opportunities. In a period of rational endurance - when both companies and employees are collectively hunkered down to get the job done - engagement based largely or only on rational factors may be adequate. But as the economy rebounds and choices open up for people, many are likely to consider moving to another employer. At that point, emotional engagement may be the only thing helping retain those people most critical to the business. Finally, our respondents may be reminding us that the heart of the employee is a tougher battleground than the mind. The heart of the employee is a tougher battleground than the mind. Harvey Nash HR Survey

20 HR effectiveness on engagement The respondents ranked the overall job satisfaction in the HR department Excellent 18%, Good 60%, Average 15%, Room for improvement 8%. At the same time they feel Very satisfied 7%, Satisfied 52%, Somewhat satisfied 35%, Not satisfied 5% about the general efficiency and productivity in the company. This means that our group confirms that there is a significant space for improvement, but it seems that HR and executives aren t getting the basics of increasing performance right. While our respondents are reasonably positive about their management s business (with more than half agreeing they believe in the future and being inspired). Considering this is an important driver of engagement, employers should be disturbed by respondents of weak vote of satisfaction here. The HR department has launched new employees programs as from 2010 strongly agree 34% agree 42% disagree 18% strongly disagree 6% All employee programs launched by HR have achieved its objectives strongly agree 16% agree 50% disagree 29% strongly disagree 5% Are you satisfied with the image of the HR department? Very satisfied 10% Satisfied 50% Somewhat satisfied 31% Not satisfied 9% The value of this study is that it not only tells us what engagement looks like, but also how to build it, highlighting those variables that have the most positive impact on behaviour and performance. Perhaps most important, the study reminds us of a hard truth that s often forgotten in the desire for a quick solution: building engagement is a process that never ends. And it rests on the foundation of a meaningful and emotionally enriching work experience. It is not only about making people happy or even paying them more money. As important as pay and benefits are in attracting and retaining people, they play a less important role in engaging people in their work and developing their skills. The responds to our question: which of the following has a positive impact on your skills, shows that the driver behind engagement is being stimulated as a human being. "Building engagement is a process that never ends" 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 81% 65% 43% 28% Exhibit 23: shows that the traditional monetary rewards have a relatively minor role in driving engagement itself. Management interest in employee s well-being is the most important driver behind engagement. Here are the important points to note: considering employees as human beings is considered more important for the impact of engagement levels than managers actions. In today s situation Managers and HR are not necessarily doing the things that matter most. This actually garnered the biggest negative score across the range of manager behaviours, with 33% rating managers as poor or very poor at taking their views into account. "Management interest in employee s well-being is the most important driver behind engagement" Given today s fast pace and need for rapid decisions having the time to talk to people about an issue may be more of a luxury than a practical reality for many managers. And sometimes, consultation just isn t possible for business or other reasons. Still, giving people a chance to provide input - providing a forum for opinions - is not only part of building more challenge and stimulation into the work environment, but also a part of involving people to enhance engagement and a sense of accountability. The workplace is no different from other areas in our lives 3% 20 Harvey Nash HR Survey 2012

21 Which of the following employee programs need to be launched Leadership programs 61% Employee engagement programs 50% Organizational learning programs 36% None 14% Other 4% Which of the following areas should HR assist Career orientation 78% Employee motivation 72% Goal and objective setting 72% Conflict management 59% Emotional intelligence 50% Stress management 43% Self-esteem 30% Other 5% Exhibit 24 Career advancement opportunities 5% 7% 40% 48% Strongly agree Agree Disagree Strongly disagree Exhibit 24 responds to the statement: Employees feel that the organization offers the perfect conditions for individual and team growth. Respondents gave their companies the lowest scores by far on this engagement driver. Just a third of the respondents agreed their conditions for individual growth were excellent, while 40% disagreed. Only 55% were positive about this aspect of their organization, while 45% were not. Given companies economic belt-tightening over the last two years, job advancement - indeed, job movement at all - has probably been limited at best (other than job eliminations). So to some extent, our respondents views may simply be a sign of the times - in keeping with their recognition that today, it is harder to find another, and especially better, job than it was two years ago. Still, we have a far more mobile workforce than was true a generation ago. Harvey Nash HR Survey

22 Communication Most respondents feel that entering into a dialogue with employees boost the effectiveness of HR (96%). There are however other means as well: Exhibit 25: Which tools do you use to communicate value and influence perceptions? Don't use Daily Weekly Monthly Quarterly Annually this Micro blogging 84% 3% 7% 4% 2% 0% Influencer blogs 84% 4% 5% 3% 4% 0% Podcasts 79% 1% 2% 9% 7% 2% Employee blogs 77% 5% 8% 7% 3% 0% Corporate blogs 63% 4% 13% 15% 4% 0% Intranet collaboration 47% 13% 21% 14% 5% 0% Social networks 47% 19% 15% 12% 7% 1% News letters 23% 1% 14% 36% 24% 2% Intranet news 15% 25% 34% 18% 9% 0% updates 12% 18% 32% 31% 6% 1% Presentations 12% 7% 17% 34% 26% 4% Management meetings/ conferences 6% 9% 23% 28% 30% 5% Personal meetings 4% 42% 27% 22% 4% 1% These exhibits tell a mixed story as far as communication is concerned. The relatively favourable scores for HR communication abilities (96%), is to enter into a dialogue with employees which will boost the effectiveness of HR. Effective employee communication is a perennial challenge for organizations, especially large, complex ones. In our work with clients, we have found that it is a learned skill, and one that traditionally has not been emphasized among managers moving up through the ranks. In addition, many organizations confuse communication with information, concentrating on disseminating basic facts rather than providing context, commentary and a two-way dialogue. In our experience, employees want to know what management thinks and believes and how it plans to act. "Many organizations confuse communication with information" And they also want vehicles to give their input. It is part of the environment of mutual trust, accountability and responsibility that is important in engaging people and winning discretionary effort. Equally damaging is a culture characterized by perceived gaps between leadership s words and its actions. A common example is trumpeting. Retention As we did for the drivers of engagement, we analysed our data to isolate the specific elements of the work experience most important to recruiting and retaining employees. Exhibit 26 shows the results of the top 10 drivers of retention strategies. What is immediately apparent are the differences across these areas. While there are some overlaps, particularly in retention and engagement. Let s take a closer look. Exhibit 26: Which of the following retention strategies are you successfully employing? Placing the right talent in the right job 69% Treat each employee with respect and as an individual 64% Improve the balance work and personal life 54% Offer a competitive compensation package 54% Workplace flexibility 48% Communication by HR and availability of HR 46% Employee empowerment 46% Make the workplace fun 34% Eradicate favouritism 24% Other 4% 22 Harvey Nash HR Survey 2012

23 This exhibit takes a closer look at the intent to leave the company - underscoring the fact that a highly engaged workforce is a more stable workforce. As shown, retention strategies are used for moving employees from a state of moderate to high engagement that makes them almost twice as likely to want to stay with the company and invest discretionary effort, all other things being equal. And while high engagement does not guarantee retention, it does increase the chances of retaining the very people who are probably going to be most attractive in a competitive talent market. Disengagement, for its part, poses two distinctly different retention risks for employers. Building the right foundation Pay and benefits remain somewhat important in retention, but clearly to a lesser extent. In a sense, what we are seeing here is the difference between the needed-to-play and needed-to-win reward elements. Assuming an employee perceives that his or her pay and benefits are competitive and adequate in the context of the job and competitive realities, other things - notably advancement, talented co-workers and the overall work environment - matter far more in deciding to stay with a company. But if pay or benefits are seen as inadequate or out of line with effort or competitive reality, that will then become a major factor in pushing people to look for other situations. Here, too, we have seen some shifts in the mix of key elements driving retention over the last two years. What is also more important today is managerial effectiveness, particularly in setting clear goals and inspiring people, both of which hark back to people s need for both the will and the way in giving discretionary effort. Indeed, it is impossible to underestimate the importance of the manager s role overall, especially, as we have seen, in creating a positive work environment and building more challenge into people s jobs. "What is important today is setting clear goals and inspiring people" Essentially, this comes down to an employer s responsibility to provide employees with information. To the extent in which a company consistently keeps employees fully informed, it provides the necessary foundation for employees to behave responsibly and accept accountability for making their own decisions. So, along with decision-making, communication and education must also become clear. Exhibit 27: Putting it all together: an HR agenda for the future 70% 60% 50% 40% 30% 20% 10% 0% Employee engagement 62% Employee training 58% Employee retention Accountability towards empl... 41% 40% 37% Employee benefits Employee job needs 27% Managing an organization and its people poses unique challenges today. Consider what has just occurred in the past two years; continued economic uncertainty. However, it is also a function of strong employee engagement management programs that help people set clear goals, assess progress against those goals, understand gaps in skills and how to close them, and what their longer-term opportunities might be. Give employees education to increase their business. This is among the top drivers of engagement. This element speaks to employees need and desire to have more of a personal connection to, and impact on, the business and its customers and contribute materially to results. This is obviously easier in some roles than others, particularly in service-based businesses where employees can have a great deal of direct customer contact. Ultimately, managing people should become as an important objective to an organization as managing operations, inventory or budgets. This is a message that has to flow down from the top and take root in the fabric of the organization. Seek creative ways to make jobs more challenging and improve opportunities for advancement. If employers were to focus on just two areas in workforce management, these would arguably provide the most return on their investment. At a time when so many people are struggling with excess work - doing the same or more work with less help - there is a special urgency to making work seem more challenging and stimulating. Simply put, it can mitigate the negative impact of a demanding workload. One of the interesting findings in our study of the emotional climate of the workplace was that people want to be stimulated as a human being. This stimulation ultimately compensates for the amount of the work, helping dissipate negative feelings about workload itself. 1% 8% None Other, please specify Harvey Nash HR Survey