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Last Updated: Aug 21, 2008 - 8:09:58 AM |
Finance leaders are accelerating efforts to leverage the crucial link between people performance and financial performance. According to a study of financial officers by Robert Half International, the greatest concerns for CFOs include staff recruitment, training and retention. Many enlightened CFOs are driving initiatives to improve employee engagement. Engaged and committed employees are proud to work for their employer, are dedicated to the organization and willing to give the extra effort necessary to achieve the goals of the enterprise. Engagement is a leading indicator of financial performance. Companies that increase their engagement levels can expect to significantly improve their subsequent financial performance.
Recent studies by Towers Perrin-ISR resulted in these findings:
- A 52 percent difference in one-year performance improvement in operating income between companies with high vs. low employee engagement. (High engagement companies improved 19.3 percent. Low engagement declined 32.7 percent.)
- A 13.2 percent improvement in net income growth over a one-year period for
companies with higher employee engagement.
- A 5.75 percent positive difference in operating margin and 3.44 percent positive
difference in net profit margin in companies with higher employee engagement levels.
AXA's CFO, Denis Duverne believes he spends half of his time these days on human resource initiatives. In a recent CFO Europe Magazine article he states, "we know that in our companies where employee engagement is high we have better customer satisfaction indices than in our companies where employee engagement is low." Studies within AXA-France and AXA-Equitable show that satisfied customers have a two to four times higher cross-sell rate and a two to three times lower cancellation rate than dissatisfied customers.
So what can financial leaders and their colleagues do to increase the quality of their talent and the level of engagement in their people? From a wide range of possible leadership actions, here are eight to consider.
1. Get a Baseline of Your Human Capital. In a CFO.com article from TNT's Henk Van Dalen entitled A CFO preaches the importance of "employee engagement," traditionally a subject left to HR, TNT recognizes the need to adequately address employee engagement by having "indicators available that enable management to target actions to get the best possible engagement." Many organizations do this by establishing a
baseline through initial employee data-gathering, and doing annual surveys measuring employee engagement and commitment levels.
2. Attract the Best Talent. Become a preferred employer. Does your organization show up on lists of the greatest places to work in your area? What messages can you provide prospective employees about how you are environment-friendly and are contributing back to the community?
3. Select the Best Talent. Good people are attracted to work with good people. By selecting and retaining the people that fit your business, you establish a self-reinforcing, virtuous cycle.
4. Communicate Your Strategy. Leaders create vision and direction and they clarify values. When communicated well, these create cohesion and commitment within the hearts and minds of employees.
5. Identify and Bolster Mission Critical Positions. Mission critical positions are disproportionately important to the organization's ability to execute its strategy. Invest resources in these positions through focused selection, de-selection, promotion, development and communication.
6. Connect and Guide New Employees. Few organizations are excellent at managing the investment they have made in hiring new staff and more experienced managers. Effectively bring talent on board by helping them connect, build rapport with the team,access key information and receive guidance.
7. Link Training Investments to Business Drivers and Key Positions. Invest training dollars in mission critical workers to drive business performance and retain their crucial contribution.
8. Manage Retention and Turnover. Here are some ideas to enhance your retention practices for key talent:
- Give awards for service and contribution
- Provide health benefits that compete with your competitors for talent
- Provide access to on-site fitness and wellness programs
- Make life a little easier through concierge and other on-site services
- Make it easier for employees to give back to the community
- Conduct "stay" interviewers vs. exit interviews
- Offer innovative relocation offerings
- Create programs for fruitful time off
Those employees who are engaged and committed are less likely to feel negative about the company and more likely to look for ways to continue to improve it, to support others in doing great work, and aid the organization to service its customers and realize its financial goals.
About the Author:
Brian Carlsen is a speaker, training facilitator and consultant. He serves as Practice Leader for Organizational Learning with St. Aubin, Haggerty & Associates, Inc., a strategic human resource management consulting firm. He is co-author of Attract,
Engage and Retain Top Talent, due to be released in July of 2008.
Contact Brian at www.staubin.net or 847-564-2840.
Published in Northwestern Financial - May 15, 2008
Copyright 2008, St. Aubin, Haggerty & Associates, Inc. All Rights Reserved
85 Revere Drive Telephone: 847 564 2840
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Northbrook, IL 60062-8001 www.staubin.net
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