7 DRIVERS FOR BUILDING EMPLOYEE ENGAGEMENT: FROM HIRE TO RETIRE Insights from Ceridian s 4th Annual Pulse of Talent Survey
EXECUTIVE SUMMARY The insights provided by more than 800 working Canadians show that employee engagement is not optimal. Symptoms like high turnover rates and low productivity among the workforce clearly demonstrate the need to increase engagement. Ceridian Canada s Pulse of Talent demonstrates that employers can do more to increase employee engagement. The study showed that seven different drivers represent a remedy that will positively influence engagement. No single attribute of the seven drivers works as a magic bullet to increase engagement. Rather, organizations must adopt a multi-faceted approach that covers all stages of the employee lifecycle, from hire to retire. According to Ceridian Canada s fourth annual Pulse of Talent, this multi-faceted approach should: Reward employees with monetary and non-monetary compensation Recognize employees so they feel valued Motivate and challenge them professionally Show employees their opinions and personal well-being are important Employers who make multi-dimensional changes that address all seven drivers of engagement will create a rewarding, satisfying work environment for employees and reap the benefits of an engaged, productive workforce. 1
INTRODUCTION ACCORDING TO THE SURVEY, ONLY 30% OF EMPLOYEES FEEL THEIR EMPLOYERS DO A GREAT JOB OF RECOGNIZING THEIR WORK AND EFFORT, AND JUST 34% BELIEVE THEIR EMPLOYERS CARE ABOUT THEM Employees are an organization s most valuable and expensive asset. However, the results of the Ceridian 2014 Pulse of Talent study demonstrates that employers can do more to increase employee engagement. Companies need to focus on engagement as it impacts productivity, profitability, and employee retention. According to the survey, only 30% of employees feel their employers do a great job of recognizing their work and effort, and just 34% believe their employers care about them. Clearly, employers can do more to increase employee engagement. Ceridian s 2014 Pulse of Talent Survey reveals that a strategy for increasing engagement at every stage of the employee lifecycle is essential. It is time for Canadian employers to revisit and refine their HR strategies, policies and actions to ensure they recruit, deploy, pay, and develop their talent in a way that encourages high levels of engagement. There is no magic bullet to engage employees at each stage of their careers from hire to retire. Rather, organizations must implement a multi-faceted approach that includes both immediate and long-term action and planning. This begins with an employee checkup to hear their concerns, learning to recognize the symptoms of low employee engagement and how they affect the business, applying a proven remedy, and finally, following a prescription for change. 2
EMPLOYEE CHECKUP SHOWS ENGAGEMENT IS NOT OPTIMAL 34% FULLY ENGAGED 40% MODERATELY ENGAGED 22% UNDER ENGAGED 5% DISENGAGED The Corporate Leadership Council defines engagement as the extent of an employee s commitment to the organization, and the effort they make as a result of that commitment. Engagement is a more reliable indicator of performance than simple job satisfaction or job motivation and results in higher productivity and profitability due to better morale and lower turnover. The most highly engaged workers fall into one of the following groups: Young or older (18-24 and 55+ years old). Post-graduates, secure in their job, salaried, have the possibility to work from home, have access to an Employee Assistance Program (EAP). People who would like to work 3 years or more for their employer, are not looking for a new job and are not exploring new career paths all ideal characteristics from the employer s standpoint. Conversely, employees who are not engaged at all are better represented in the following groups: Not born in Canada, not secure in their job, hourly workers, don t have access to an EAP. People who would prefer to work for their current employer for less than three years, who are exploring new career paths, looking for a new job, and feel internal promotions are not favored in their company. All of these factors put these employees at great risk to leave the company, thus generating high costs for the employer in terms of recruitment, replacement and training. 3
ENGAGEMENT STARTS AT THE RECRUITING STAGE 59% OF HIGHLY ENGAGED EMPLOYEES FELT THEIR EMPLOYER FOCUSED MORE ON INTERNAL PROMOTION Recruitment policies and processes are the first impression an employee gets of an employer, and remain at the forefront as current employees search for internal opportunities. Strong engagement starts at the recruiting stage when an employee s first impression of the company is formed, so it is important that employers ensure that recruitment is done correctly. Recruitment is also an important step in the development of employer branding. Even the smallest mistakes can affect a company s reputation, or brand. For example, not giving feedback during the recruitment process has major consequences on the employer brand. Consequently, this has multiple collateral effects on the employer brand, on the commercial success of the company, and ultimately, on the employer s ability to recruit the best talent. When an organization does not provide feedback during the recruiting process, it has a negative impact to the employer brand. 68% would be left with an overall negative impression of the company 52% would be less inclined to apply for another job posted at the company 44 % would be less inclined to buy the products/services of the company In a company where employees are developed and promoted internally, engagement levels are higher. The survey shows that a majority of highly engaged employees, 59%, felt their employer focused more on internal promotion. 68% SAID THEY WERE LEFT WITH AN OVERALL NEGATIVE IMPRESSION OF THE COMPANY 68% 52% WERE LESS INCLINED TO APPLY FOR ANOTHER JOB POSTED AT THE COMPANY 52% 44% WERE LESS INCLINED TO BUY THE PRODUCTS/ SERVICES OF THE COMPANY 44% 4
THE TOP 3 SYMPTOMS OF LOW EMPLOYEE ENGAGEMENT 67% OF EMPLOYEES ARE LOOKING FOR A JOB OUTSIDE THEIR COMPANY EITHER ACTIVELY OR PASSIVELY 62% OF NON-ENGAGED EMPLOYEES FEEL STRESS DURING THE WORKDAY 51% OF LOW-ENGAGED EMPLOYEES HAD DIFFICULTY KEEPING UP-TO-DATE ON THE JOB Low engagement levels impact every stage of the employee lifecycle and can result in costly consequences such as high turnover, reduced productivity and lower profitability. SYMPTOM 1: High Turnover Employees may leave the company to look for new opportunities or to explore new career paths that may not be accessible at the current employer. It is costly for an organization to recruit, onboard and train replacements, and high turnover is also a drain on employee knowledge and experience and even on corporate memory. The survey showed that 67% of the workforce is looking either actively or passively for a job outside their company. The workers that are more likely to look for a job have the following characteristics: Want to explore new career paths Feel that promotions are given externally Have been at their current job for less than 5 years SYMPTOM 2: Low Productivity The survey showed that: 62% of non-engaged employees tend to feel more stress during the work day than a highly engaged employee (just 23% report such stress), which impacts productivity 37% of non-engaged employees can t sleep at night because they are thinking about work (versus 18% overall), making them less focused the next day 53% of low-engaged and non-engaged employees go to work even when sick because they don t want to seem uncommitted to the job, but work may not be getting done Poor sleep health has an impact on employee and organizational performance Conversely, employees who have a positive mindset about the productivity in their company and in their department share similar characteristics: they feel secure in their job, they can work from home, they are engaged, they have been with their employer more than three years, they are not looking for a new job, and they don t want to explore new career paths. SYMPTOM #3: Slow to adapt to change Higher training costs may be required to help employees with internal company changes. According to the survey: 51% of low engaged employees and 45% of employees who were not engaged had difficulty keeping up-to-date on the job 5
Highly engaged employees are unlikely to change employers 86% OF HIGHLY ENGAGED EMPLOYEES WOULD LIKE TO STAY WITH THEIR CURRENT EMPLOYER FOR THREE YEARS OR MORE (COMPARED TO 32% FOR NON-ENGAGED EMPLOYEES) High engagement levels play a critical role in improving retention rates and reducing turnover. One third of employees the same percentage as are highly engaged are unwilling to change employers. An overwhelming majority of highly engaged employees, 86%, would like to stay with their current employer for three or more years, compared to 32% for non-engaged employees. However, despite everything employers are doing right, many employees are at least open to the idea of changing employers: 28% of employees are in some form looking for a new job with a new employer 40% aren t actively looking, but would consider a new job with a new employer The 40% of employees who aren t looking to change employers represent a tremendous opportunity for employers to introduce a multi-faceted approach to increasing engagement levels. Surprisingly, there is no relationship between a longer stay at the job and a high engagement level. However, job security is linked to the engagement level. 89% of highly engaged employees perceive their job as being secure, compared to 74% of the moderately engaged workers, 54% of low engaged people and 34% of non-engaged employees. Clearly, the lower the engagement, the lower the perceived job security. Assuring employees about job security is recommended whenever possible. 28% 40% 28% OF EMPLOYEES ARE IN SOME FORM ACTIVELY LOOKING FOR A NEW JOB WITH A NEW EMPLOYER 40% AREN T ACTIVELY LOOKING, BUT WOULD CONSIDER A NEW JOB WITH A NEW EMPLOYER 6
THE REMEDY: 7 DRIVERS OF EMPLOYEE ENGAGEMENT THERE IS NO SINGLE ATTRIBUTE OF THE SEVEN DRIVERS THAT WORKS AS A MAGIC BULLET TO INCREASE ENGAGEMENT In the Ceridian 2014 Pulse of Talent survey, respondents were asked to rate 15 statements on a 10-point agreement scale (see page 8). From these results, Ceridian grouped the statements into seven different drivers that strongly determine employee engagement. These seven engagement drivers represent a remedy that will positively influence engagement at every stage of the employee lifecycle: 7 WORK ENVIRONMENT 1 REWARDS 2 RECOGNITION 6 EMPLOYER CARE 3 MOTIVATION 5 PRIDE/ ADVOCACY 4 CHALLENGES The study shows that there is no single attribute of the seven drivers that works as a magic bullet to increase engagement. Organizations must adopt a multi-faceted approach to improving engagement levels one that includes immediate and long-term plans and actions that cover all stages of the employee lifecycle, from hire to retire. 10 7
Engaged employees give higher ratings to all seven drivers Interestingly, all of the seven drivers (15 statements) were rated much higher by more engaged employees than they were by less engaged employees, as evidenced by the following results for each driver (agree/disagree scale): DRIVER 1. REWARDS 2. RECOGNITION STATEMENT HIGHLY ENGAGED (rating out of 10) DISENGAGED (rating out of 10) The pay, benefits and the rewards I receive for my work are good 8.3 2.6 My employer does a great job of recognizing my work and efforts on the job (publicly or privately) 8.2 1.4 3. MOTIVATION I am motivated by my work 8.8 2.1 My work challenges me professionally 8.7 2.4 4. CHALLENGES My work gives me the opportunity to grow my skills and reach personal goals 8.8 1.9 5. PRIDE/ ADVOCACY 6. EMPLOYER CARE 7. WORK ENVIRONMENT There are many career opportunities available to me in my workplace 7.5 1.3 I believe in the future of my company 9.1 2.2 I would recommend my place of work to other people I know who are looking for a job 8.9 1.2 I am proud to work for my company/ employer 9.3 1.4 I am completely engaged with the company I work for 8.8 1.5 The work I do is valued by my organization 8.8 1.4 My employer regularly asks for feedback from employees through things like meetings, employee surveys, etc 8.3 1.4 The company strategy and vision have been clearly communicated to me 8.8 2.0 The company I work for cares about me 8.5 1.1 In my company, the majority of people I work with are great 9.0 3.6 The correlation is clear. Employees who are more highly engaged rate all statements related to the seven drivers of engagement more highly. Non-engaged employees rated the statements listed above much lower on the 10-point scale. Clearly, employers who make multi-dimensional changes that address all seven drivers of engagement will see a corresponding increase in employee engagement levels. 8
A PRESCRIPTION FOR CHANGE According to Ceridian Canada s 4th Annual Pulse of Talent Employers either aren t taking engagement seriously or the steps they are taking to increase engagement are proving ineffective. Making sure employees are highly engaged starts with choosing and implementing the right HR strategies, policies and actions. It means constantly paying attention to the changing requirements at each stage of the employee s career. And, it requires paying close attention to how the employee is managed along the way from hire to retire. The study shows that to substantially improve employee engagement, employers should focus simultaneously on all of the seven drivers of engagement: Rewards, Recognition, Motivation, Challenges, Pride/Advocacy, Employer Care and Work Environment. Implementing a single, uni-dimensional strategy does not effect change in the optimal manner. For example, while job rewards receiving monetary or non-monetary compensation for a job well done is important, it will not substantially improve engagement on its own. It is just one actionable tool in the engagement puzzle. 9
To improve engagement results, employers must: 1. Reward employees with monetary and non-monetary compensation 2. Recognize and value their employees TO LEARN HOW TO INCORPORATE THE FINDINGS FROM THE CERIDIAN PULSE OF TALENT INTO YOUR ORGANIZATION PLEASE SPEAK TO A CERIDIAN REPRESENTATIVE. CALL 1-877-CERIDIAN OR VISIT CERIDIAN.CA 3. Motivate and challenge employees professionally, and provide opportunities for growth 4. Show employees they care about their opinions and personal well-being 5. Communicate/educate regularly about the company s corporate vision 1 IN 3 EMPLOYEES ARE FULLY ENGAGED ON THE JOB WHAT ABOUT THE OTHER TWO-THIRDS? 1 IN 3 EMPLOYEES BELIEVE THEIR EMPLOYER CARES ABOUT THEM 10
ABOUT THE SURVEY The Pulse of Talent 2014 Edition was commissioned by Ceridian and conducted in partnership with Harris/Decima. Eight hundred and one Canadians were surveyed online in April and May 2014 using Harris/Decima s online panel. All survey data was weighted to ensure the demographics and employed population distribution across Canada was consistent with the Canadian working population. The margin of error associated with the results is +/- 3.5%. ABOUT CERIDIAN Ceridian is a leader in human capital management with more than 100,000 clients in over 50 countries. We deliver trusted results and transformative technology. Our offerings include the award winning, cloud-based Dayforce HCM, LifeWorks, PowerPay and International Payroll. Ceridian is transforming the world of work. For more information, visit www.ceridian.ca or call 1-877-237-4342.