Companies seek an edge through engaged employees

Companies now have the tools to establish how happy a work force is with their work and their employer. Once they have established this, they can then make improvements, increase employee engagement and boost performance says a new PricewaterhouseCoopers report.

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The increasingly recognised link between high levels of employee commitment and bottom line results means business leaders all over the world are exploring engagement metrics and measures.

They can be used to enhance the image of the company as a responsible employer, or improve employee retention in fast developing markets where staff turnover is high due to a buoyant labour market.

Rapid economic change and uncertainty in many markets makes such measures more relevant than ever. Levels of engagement are even beginning to be perceived by some investors as an important indicator of a companyís financial health and sustainability.

The report shows how companies can plot levels of engagement for an entire work force by looking at data relating to resignation levels, absence rates, employee attitudes, training hours per full-time employee (FTE), performance related pay and incidence of grievance. These range from the high levels of engagement that produce positive behaviours such as flexibility and innovation to the other end of the scale where companies experience resignations, absence, pilfering, theft, oppositional solidarity, even sabotage.

The report, ëManaging People in a Changing Worldí, also looks in detail at financial performance, productivity, outsourcing, leadership, innovation, talent management, diversity, work/life balance and the growing concept of work place wellness, all through the lens of PricewaterhouseCoopers extensive human capital (HC) database, Saratoga. The report is published every two years.

Richard Phelps, partner, PricewaterhouseCoopers LLP, said:

ìAs the value of choosing the right human capital policies is increasingly recognised by business leaders, we are seeing a greater demand for evidence based human capital metrics. Using these, companies are now able to ascertain how they are performing in previously uncharted areas such as succession planning, innovation and talent management as well as using the ëharderí metrics such as return on investment per worker to determine overall business performance.

ìIt is an exciting time in this area. More and more companies are working hard to be perceived as responsible employers, to build attractive employer brands and fulfil their reputation as a responsible company. HC metrics help them to throw their arms around all of this.î

The report also charts the rise of a new kind of offshoring - Knowledge Process Offshoring (KPO) - where traditionally sacrosanct knowledge or judgement services such as research and sales and marketing are run from other countries. The KPO market globally is predicted to grow to $16.7 billion by 2010-2011, implying an annual growth rate of 39% and employing some 390,000 professionals by March 2011. Here, countries such as India, China, Russia, Poland, Hungary and republics from the former Soviet Union provide high levels of skills at comparatively low cost for many western economies experiencing skills gaps.

A new concept of ëconnected sourcingí is also emerging. This sees organisations increasingly focusing on what they do best and then orchestrating a portfolio of relationships for the rest. This requires a new approach and highly developed levels of collaboration, transparency, trust and relationship management.

A further development is found in the area of talent management. The traditional focus on high performers and ëhigh flyersí is shifting to include ëpivotal employeesí. These are segments of the workforce that are expected to create value and determine the success of the organisation. They can range from the receptionist to the sales director and the contribution of these core people has a disproportionate impact on determining both the success of an organisation and its sustainability.