Keeping staff happy is good for business, but involves more than pay rises, as Charles Orton-Jones discovers
L’Oréal has a problem. The French firm has a skin care arm called the Active Cosmetics Division which is performing well in the United States and most Western-European markets. But not the UK. Turns out we Brits are a bit shy about going into a pharmacy to ask for advice about our skin. Nor do we visit dermatologists, unless something’s going dramatically wrong. So the division is doing rather miserably over here. What to do?
The solution lay in research L’Oréal had conducted into the mindset of British workers. This showed a burning desire to be more entrepreneurial at work. More than a quarter (27 per cent) said they were already sitting on a great idea. Over a third of all employees said they wanted to have their ideas heard by their firm, but nine out of ten felt their boss was uninspiring and likely to look elsewhere for advice.
So L’Oréal acted on the research and asked their staff to be the consultants.
L’Oréal created an internal competition, called The Next Fund, asking employees for ideas on what to do about the misfiring division. Entries will be judged by a L’Oréal panel plus a top executive from Google, a firm known for the high value it places on employees’ creativity. The prize: £100,000. The result will be known shortly.
The logic at work here is perhaps the hottest trend in business. It’s about knowing what your employees want and then harnessing those desires to achieve defined business goals. L’Oréal realised its workers would be delighted to be asked to help resolve a problem which affected a key part of their firm. They would be offended if outsiders came into manage the much-needed transformation.
Fortunately, you don’t have to start from scratch. Many companies are prepared to share their research. The stand-out finding is that employees want far more than mere financial recompense. In fact, a fixation on cash rewards may be the most basic error you can make.
Professional services firm PwC polled 4,364 university graduates across 75 countries about their views on work. The graduates were asked what was most important to them in a job. The top priority (52 per cent) was rapid career promotion, ahead of competitive salaries (44 per cent). In terms of rewards, they ranked a good work-life balance as the number-one concern, then flexible working hours. Cash bonuses trailed a dismal third.
There were insights into how young people like to work. A large proportion (41 per cent) said they would rather communicate electronically at work, rather than face to face or by telephone. Connected to this, 38 per cent said senior management did not relate to younger workers, with half saying these older workers didn’t grasp technology the way they did.
Perhaps the hottest trend in business is about knowing what your employees want and then harnessing those desires to achieve defined business goals
By using insights like this, a workplace can be transformed. Media agency the7stars has 80 staff and was ranked the number-three best small firm to work for by The Sunday Times. Boss Jenny Biggam gives staff startling levels of autonomy. Job titles are gone. “There is absolutely nothing good to say about job titles,” she insists. “They are highly political, horribly corporate and I have yet to meet anyone with a good one. At the7stars, people don’t need some meaningless words following their names for their colleagues to understand what their jobs are. When pushed for a title, our staff can call themselves whatever they like.”
There is no hierarchy. “At the7stars, we operate with a completely flat structure. This allows all voices to have equal merit and everyone is encouraged to contribute to the overall success of the company. Via a matrix of project teams, everyone works across different disciplines and we all help to deliver the targets. It gives the staff a much better understanding of their colleagues’ roles and a more collaborative working environment. Our profit share scheme is split equally among everyone in the company,” says Ms Biggam.
And above all, she trusts her staff to manage their own time. “For the last eight years, we have said to our staff that there are no limitations on how much holiday they take. It is up to them to decide how many days they should take off over the course of a year. We trust our staff enough to let them decide when would be a good time to take off work and how much time they need. It means they can take an elongated honeymoon or a big trip if needed. Most people take between four and five weeks off a year – exactly the same as if we were counting days, filling in unnecessary forms and imposing rules,” she says.
Evaluating the impact of these measures isn’t easy, but the firm can point to a strong roster of clients, such as Suzuki, Virgin Records, Uniqlo and Phones 4u.
At number 35, another Sunday Times best company to work for, Cardiff-based training-provider ACT has a head of happiness to ensure staff enjoy their work. Jane Davies, who holds the title and role, reports: “My job title certainly raises a smile with people, but it’s an extremely important role. I try to make sure staff feel happy, valued and supported. If someone is unhappy, I want to know about it.”
If it seems a little avant garde to have a head of happiness, then perhaps it’s your firm which is lagging behind. Even relatively conservative stalwarts, such as Deloitte and EY, now have mental health champions to watch out for stress and offer nutritional advice to staff to ensure they are on tip-top form. Vodafone and RBS have sent senior staff on a street dance course, run by Zoe Jackson’s Living the Dream consultancy, to build morale.
These firms know you can’t just do that by throwing money at staff. Humans are more complicated than that.