Motivating and retaining staff has never been so difficult for companies because we live in a fast-changing world where jobs are less secure, benefits such as pensions have been cut, and people are more mobile.
Employees are better informed and able to communicate, thanks to digital media, and they expect more of a dialogue with their employer, rather than one-way, top-down communication.
For some employers, it means changing radically to adapt to new, tech-savvy ways of working more flexibly. Old, established practices such as fixed desks and presentee-ism may need to be challenged. New skills and new technology must be learnt.
Improving employee engagement
Despite the UK’s reputation as ethnically diverse and tech-savvy, it does not have a strong record on employee engagement.
The UK ranked 18th out of 20 leading countries, behind only Japan and Hong Kong, in a survey of 7,000 employees last year, carried out by research firm ORC International. Only 37 per cent of UK workers surveyed felt they were encouraged to be innovative and fewer than half felt valued at work, according to HR magazine.
Workplace culture matters because, as Paul Frampton, chief executive of Havas Media, an advertising-buying agency, says: “Culture is the one thing that a competitor cannot steal or replicate.” He quotes Simon Sinek, a business thinker, who argues companies should focus on “why they exist, not what they do”.
Silicon Valley tech companies are seen as pioneers in fostering a modern workplace, from “20 per cent time”, one day a week when an employee can work on any new idea they like, to benefits such as free, organic meals in the canteen. Salaries and share awards are generous, plus there is a sense of purpose in working on technology that can shape the future.
Little wonder that Google and Facebook regularly top surveys of employee satisfaction by Glassdoor, the website that lets workers rate their employer.
The rise of social media means employees should be a company’s best advocates. Mr Frampton cites IBM as a company that has encouraged its staff “to share inspiration and views on how they could work smarter”.
Enlightened employers see this as part of a wider trend as staff benefit from more flexible working and independence.
Darren Childs, the chief executive of UKTV, the broadcaster behind TV channels such as Dave and Gold, has tried to foster collaboration by mixing up teams, getting a creative to sit next to an accountant, and encouraging people to move desks every three months. He also hosts a weekly “all-hands” question-and-answer session.
It’s not just about a flexible workspace and a more creative environment. Netflix, the online TV streaming site, allows employees to take as much holiday as they want, so long as they get their work done, as part of a “policy of trust”.
Sir Richard Branson was so impressed he copied Netflix at his Virgin Group. “Flexible working has revolutionised how, where and when we all do our jobs,” he says. “So, if working nine to five no longer applies, then why should strict annual leave policies?” He argues that improved morale, creativity and productivity can all be linked to more flexible treatment of staff.
Too many CEOs are resolutely burying their heads in the sand and not shifting from the command-and-control management style they grew up with
Communicating with staff
Few bosses have the Virgin showman’s abilities to communicate, but smart employers know they need to try harder through face-to-face “town hall” meetings, online video messages, employee appraisals and social media.
Some experts claim that millennials, those born from the early 1980s onwards who came of age after the millennium, are more likely read social media than e-mail or a company blog.
An interesting question is whether any chief executive can afford not to use social tools, such as Twitter, Instagram or LinkedIn, to engage employees as well as customers. Fewer than one in ten FTSE 100 chief executives are on Twitter.
Mr Frampton, a keen tweeter, says: “Too many CEOs are resolutely burying their heads in the sand and not shifting from the command-and-control management style they grew up with. Being accessible enough and prepared to enter into conversations and learn from others is key.”
James Rossiter, joint managing director of business communications firm Morgan Rossiter, agrees: “Companies should communicate frequently with staff and keep it short and simple. Sound like a human, don’t use business jargon that would never be understood in a crowded bar.”
Sceptics say that flexible working and a more open approach are a sop to employees who have seen wages lag the cost of living and final-salary pension schemes axed.
In an acknowledgment that pension provision has weakened, the government has demanded that companies auto-enrol every worker. However, the impact on employee engagement is tempered by the fact that these defined contribution pensions are worth far less than a final-salary scheme.
Havas Media boss Mr Frampton concludes with two pieces of advice on employee engagement: “Number one is to be clear on your purpose, and number two is to over-communicate when you are on that journey to your talent and your customers – plus be honest about where there is still work to do.”