A recent Conference Board study found that CEOs across industry ranked talent management second only to business growth as their top priority. This business goal seems on target, based on another report released mid-June. Gallup recently published its 2013 State of the American Workplace: Employee Engagement Insights for U.S. Business Leaders report, and the results are troubling.
The report finds that, across the country, over 70 percent of employees are either “not engaged” or “actively disengaged” from their work. The men and women surveyed were from all industries, organizational levels, age groups and educational levels. Gallup estimates the cost disengaged workers have on the economy is between $450 billion and $550 billion.
Being engaged is not the same as being happy
Some supervisors and managers complain that they weren’t hired to make employees happy. That is correct. As a business leader, the goal is to develop a workforce of fully engaged, productive employees in order to realize business goals. A happy and satisfied employee can be sitting in the back room doing nothing; that is not good business. Engagement, however, is the key to sustained productivity and high performance and has a significant, positive impact to the bottom line.
Cost of disengagement
To clarify, engaged employees are characterized by being excited and interested in their jobs and the company. There is a personal commitment to the work. They feel like they are a part of the organization. These employees are focused on the goal and work to achieve a certain result. They feel connected. They want to contribute. This is the group in which you find your high performers. It’s interesting to note that engaged employees usually report they are also happy/satisfied; but not all happy/satisfied employees are engaged.
Disengaged employees may show up to work as scheduled but they tend to do the minimum amount of work needed. Accident rates are higher in this group. Absenteeism is higher as well. Quality of work suffers. Turnover is often high. One of the most significant costs to an organization is often missed when calculating the cost of doing business: the lost productivity and lost opportunity when someone isn’t working to his or her potential.
Disengagement is a symptom of bigger issues
During all my years in the work world, rarely — if ever — have I seen someone who wasn’t excited, energized and eager to work when they start a new job. So why do these traits often fade in a short period of time?
Although there is a chance businesses may hire individuals who are negative and disgruntled before accepting the job, the good news is that employers are generally skilled at screening out candidates with attitude and performance problems. The bad news is that there is a strong likelihood that the disengaged employees are being developed on-the-job.
Disengagement, then, is a symptom of larger, organizational issues.
Reasons someone may “shut down” or give up and become resigned and cynical about work are as varied as the employees themselves. A few common themes include:
• Lack of respect (from/for supervisor/leaders);
• Lack of trust (from/for supervisor/leaders);
• Poor communication; disconnected from business/strategy;
• Opinion not important; not being involved; not able to grow professionally;
• Too many demands; too few acknowledgements; and
• Poor fit with company culture and/or job.
The actual experiences that alienate members of the workforce are too numerous to list. Every business is unique and the reasons need to be thoroughly investigated before effective solutions can be developed.
The employment relationship is changing
Spherion’s 10-year study on “Emergent and Transitional Workers” found that candidates and employee values and priorities are changing and suggests that businesses should consider monitoring and updating their behaviors and expectations in order to hire and retain great talent. Their findings: 86 percent of workers report work fulfillment and work/life balance as top career priorities and only 35 percent reported that being successful/climbing the career ladder was top priority.
If businesses are still relying on traditional career ladders and primarily focus on compensation to win over top candidates, they may be increasingly challenged to attract and retain good talent. Making career decisions for employees without their input and agreement can backfire. Allowing supervisors and managers to behave disrespectfully is just bad business.
Due to the sluggish economy, many companies incorrectly believe they have all the power when it comes to staffing. “Be happy you have a job,” is not the path to high productivity and will quickly lead to disengagement, lost productivity and a bad employment brand.
Candidates, however, are very aware of the value of their work and contributions. Poor job choices can significantly impact one’s career long-term and employees realize they need to be careful to align themselves with an employment situation that balances value to them — beyond the paycheck — with the value they give to the employer. They are actively involved with managing their own careers. The war for talent is real and hiring a preferred candidate is only going to get more difficult.
Career Architect Consulting Service’s individual career clients (individual who are in transition and currently working professionals) consistently report that they are looking for four basic things in a job:
1. An opportunity where they can truly contribute to the business success;
2. Acknowledgement for their contributions;
3. Appropriate compensation (it has to be enough, given their experience and the position, but doesn’t have to be top dollar); and
4. Some work-life balance to have time with family and friends outside of work.
The list seems reasonable, yet individuals state the elements are not easy to find in an employment opportunity. Employers who can fulfill these basic requirements will position themselves as an Employer of Choice.
When there isn’t aligned value for both the employer and the employee, the relationship fails for both.
What can an employer do to build a high performing workforce?
Ad hoc retention programs do not work. When there is dysfunction in the workplace, the dysfunction needs to be corrected. Generally, throwing parties, buying pizza, or similar “low or no-cost” attempts to improve morale are not going to fix the problems and may actually cause more damage. Increasing wages or giving bonuses is only a very temporary fix.
To create a work environment that engages the workforce and optimizes their skills and knowledge, a comprehensive, systemic Talent Management Strategy and formal program is essential and should be the primary focus of Human Resources and all business leaders.
If the workforce is currently performing well, conscious action should be taken to keep productivity at high levels. If the business is not working at optimum levels, there are steps to improve the situation. Inattention will result in performance deterioration.
There are five key components to the strategic Talent Management Lifecycle:
• Selection (why the chosen candidate will be successful);
• On-boarding (starting the new employee with momentum and to reinforce his/her choice to join the company);
• Development and optimization of talent (coaching, training, performance management);
• Retention and succession planning (employee input is critical); and
• Outplacement (providing transition assistance if business need changes or employment is not a fit).
Every Talent Management program has one primary goal, to ensure: Every “people” decision must be a coordinated, strategic decision that moves the organization toward optimum performance.
The tactical objectives must be customized to a company’s culture and specific needs of the employer as well as the employees/candidate pool. Duplicating a program implemented by another employer (sometimes even another location of the same employer) will likely fail.
Contrary to common practice, the HR functional initiatives (benefits, compensation, training, performance management, etc.) must be strategically connected and focused on supporting the talent management goals and objectives; not administered in silos and operated as stand-alone programs.
Other operational policies and processes should also be integrated with the talent management program. The strategies are systemic and are truly business initiatives. They are most effective when seen as business goals and when managers and supervisors are held accountable for their success.
A company may have the best ideas and products, but will never maximize its full potential without recognizing, valuing, and harnessing the power of its people.
Marge McGee is the president and founder of Career Architect Consulting Services — a Rochester career and talent management consulting firm. Through aligning culture, talent and goals, clients become the designers and builders — the architects — of sustainable, effective work environments and exciting and satisfying individual careers. Visit her website at www.career-architect.com. This article is brought to you by the Rochester affiliate of the National HR Association, a local professional HR organization focused on advancing the career development, planning and leadership of HR professionals. Visit www.humanresources.org for more information.