Disruption: trending near you.
If your organisation hasn’t been disrupted, be alert, soon it will be. That’s the reality of the digital economy. It requires businesses to continually respond to threats of new technologies and agile digital native companies. It means transforming how they work - and not just once. Organisations need to embed this ability to change into their DNA, so they can continually respond and become digitally sustainable. In this article, we explore what this means for employee engagement.
It could be a merger or acquisition, a new CEO or a period of rapid growth. Or it can be a response to the disruptive power of digitisation, the complexity of globalisation or increasingly demanding customers. It doesn’t matter what type of change your organisation is going through, one thing will always apply: organisations don’t drive change. People do. Trine Ronningen, global specialist of organisation and culture at telecoms multinational, Telenor, explains that “You don’t transform a company through its structures, systems and processes alone; you do it through people – all of whom go through their own personal transition.”
In such times, employee engagement becomes even more critical for success. Korn Ferry studies have shown how organisations with higher levels of engagement can achieve up to two and a half times more revenue growth. This is imperative during times of change when the company needs engaged individuals to deploy their discretionary efforts to fight for the cause while excelling at their jobs. Organisations cannot transform, and keep day-to-day business moving, if people are only willing to do what’s expected. But organisational change, like earthquakes, can be hugely disruptive deep into a company’s core, disengaging employees and reducing their confidence in employers at a critical time.
We recently analysed information from our global employee-opinion database which includes responses from more than six million employees, comparing results for organisations undergoing large-scale change with corresponding global averages. Our findings indicated that employees experiencing major change were increasing doubtful that their company:
- Can retain high-quality employees: 27% lower than global average
- Encourages staff to take reasonable risks (trying new ideas or new ways of doing things): 18% lower
- Organises and structures itself effectively: 13% lower
- Addresses poor performance generally and effectively: 16% lower
- Manages itself effectively and is well run: 11% lower
- Keeps employees informed about the business’s performance: 19% lower
Engagement suffers during periods of uncertainty. Employees can be nervous about change, and feel insecure or demotivated when the goalposts are unclear. Their need for information outstrips what management can provide, damaging confidence in the leadership and direction of the firm. In addition, companies need to ask more of employees to get through change. This can harm perceptions of the exchange between effort and reward.
All this poses a huge challenge for engagement professionals today because in a digital economy, disruption, uncertainty and change are the norm. So, how do you keep your people engaged in the digital age so that your company can navigate the waves of change that will inevitably hit your business?
Before we answer this question, let’s take a closer look at the workforce impacted by the digital economy.
The changing face of the global workforce
The world’s population is ageing. In Australia, the fastest growing age group is the over 65s and they are starting to retire. The ‘born digital’ millennials have come to prominence in the workplace. Demographic change is a trend that is fundamentally changing relationships between businesses and employees today.
For businesses, an ageing population means a growing skills shortage. With the baby-boomer generation hitting retirement age, experienced talent will be at a premium. This puts pressure on organisations to invest time and effort now to develop the next generation, and make sure they’re ready to lead the company into the future.
However, companies must proceed with care. There is a risk of over-promoting young workers before they have the necessary skills and experience, and leaving them with nowhere to progress is a clear recipe for disengagement. Developing multiple career paths can help avoid this pitfall.
An ageing population also brings the challenge of managing an increasingly age-diverse workforce. For over a decade now, we’ve been aware of the need to retain the knowledge, skills and experience of our older employees. And we’ve seen older employees increasingly wanting to stay with us beyond retirement age. Businesses now need to understand, lead, manage and motivate teams made up of five generations, all with their own needs and motivators.
Organisations will need to foster a culture and conditions that motivates and enables staff of all ages and cultures to perform. This means working with different groups of employees in different ways. Insights from our extensive employee opinion database shows that what engages younger staff looks very different to what older workers demand. To gain a better understanding of what would best engage their younger employees, Kimberly-Clark, the consumer products multinational, instituted a reverse mentoring program in which millennials were teamed up with senior executives. The program is also removing the traditional barriers of top-down hierarchy and promoting a healthy, free-flowing exchange of ideas amongst the different generations.
Younger employees focus on the future. They want opportunities to progress, to build and test their skills in as many areas as possible and regular and constructive feedback on performance. Not only will organisations need to react to this to keep employees engaged, but doing so will become critical in order to fill the leadership pipeline as the baby boomers leave the workforce. For their part, mature employees tend to look for security. They need to know they are working for a strong, successful organisation, with a clear and compelling strategic direction. Confident in their abilities, they seek a fair balance between their contribution and reward.
It’s clear this demographic change is shifting how we work, what we care about and what is required from employers. And to succeed, businesses need to rethink how they engage, enable and earn the loyalty of their employees.
Six things your organisation can do:
- Understand their motives
With so many disparate needs and motivators, find out what drives the different age groups in your workforce. Analyse employee feedback, for example through your employee survey, to identify both common and divergent needs and motivations.
- Understand the implications
Audit what demographic change will mean for your organisation, in terms of:
- How to get the best from each age group’s skills, knowledge and experience.
- The learning and development needs of different groups of employees.
- The career paths and HR policies required to meet the needs of each age group.
- Your reward packages (compensation, benefits, well-being programs and so on).
- Tailor training
Adapt learning and development to the needs of each age group. Establish age-diverse workgroups to enable mutual, intergenerational knowledge sharing. Create processes to help managers lead junior team members, for example by providing more direction, support, and continuous feedback.
Train leaders on intergenerational management – including performance management, coaching and developmental planning.
Inter-generational learning and understanding is needed to help an age-diverse workforce to work together, and to foster a two-way knowledge transfer. Younger staff can help older colleagues understand new technologies; while older workers pass on the knowledge and skills they’ve built up over years. For example, Tesco established a mentoring scheme for this purpose, and to enable knowledge transfer between age groups. This scheme works well for both ends of the age scale: younger generations thrive on connections, while older staff are happy to leave their legacy. This sort of mutual collaboration should tap into the motives of all groups. The opportunity to learn from and network with senior colleagues will appeal to younger employees, who are driven by skills development and fast career progression. Whilst older team members may relish the challenge of helping junior staff, and the prospect of leaving a positive legacy when they retire.
- Adapt your policies
- Support the needs of different generations through flexible working arrangements.
- Understand the career aspirations of different generations, and develop multiple career paths which take employees in and out of different business areas. Make sure to communicate what this involves.
- Analyse and adapt to the different reward needs of each age group via tailor reward packages. For example by offering a flexible ‘benefits menu’.
- Establish trust
‘Age-friendly’ policies send a message that you trust your staff to work in different ways and continue to give their best. Meanwhile, intergenerational teams will help create a climate of trust and respect between the different age groups.
- Plan for the future
Identify your most critical roles and skills gaps, and ensure you have succession plans in place.
For example, Starbucks puts a strong emphasis on strategic workforce planning (SWP) – the coffee-shop chain has a dedicated global SWP team. Its purpose is to help leaders think beyond short-term reactionary hiring, and focus on medium and long-term planning in line with business strategy.
To effectively engage employees in the digital age, organisations need to understand and acknowledge the composition of their workforces and build a great place to work by motivating and satisfying the needs of employees in all generational groups.
To learn more about how to prepare your business for the digital economy, download: Build to last: The Journey to digital sustainability.