With December winding down, it is a time for many to reflect on the year, success milestones, as well as any learning opportunities. Once the celebrations are recognized, this time of year creates a valuable opportunity to establish metrics for promoting employee engagement looking into the year head.
Making room to create or revisit some best practices regarding employee engagement can be a powerful competitive asset because engagement it is a critical bottom line issue. Statistics reveal that disengaged employees or unhappy workers cost North American employers over $350 billion annually in lost productivity. The Management Journal's Employee Engagement Index indicates that 60 percent of employees are not engaged and 15 percent are actively disengaged. This means that they are actively looking for another job and likely doing so on company time.
New employee hiring and training costs aren't something company leaders can overlook. According to the Studer Group survey of CEOs by Harvard Business School, mid-level managers require 6.2 months to reach their break-even point. Realistically, the first three months involve orientation and training. Likely the employee is approximately 25 percent productive within the first 12 weeks and hopefully by weeks 13-20, the employee's productivity ramps up dramatically. If an employee becomes disengaged early on and the hiring process begins again because the employee decides to bail, the company could lose a year of productivity and well as suffer the demoralizing factor affecting the remaining team members.
The more a company focuses on being competitive and hiring the best and brightest, the more emphasis should be placed on keeping employees engaged. The following represents the top 5 list of engagement best practices:
1) Provide timely feedback - employees look for feedback to ensure they are on the right track and performing to expectations. Be mindful of the different generational needs in this regard. In particular, Milliennials (Generation Y born between 1980-2000) look to enhance their skills and improve. Feedback is critical and best delivered within 24 hours and no more than 7 days from the time the behaviour was observed.
2) Foster a culture of respect - when employees are treated like valued people and not just as valued for their skills, they don't tend to hesitate to go the extra mile when asked. Every role is important and when employees know that their work makes a difference and contributes to the success of their team, department, division and company, they will more likely feel a greater sense of engagement and purpose.
3) Empower employees to make decisions -- Building strong and sincere relationships involve motivating employees to make decisions about the work they do. It involves two-way communication and asking employees what they would do if they owned the company or were the head of the division. "Empowering" also involves listening and sharing opinions in healthy ways. When employees feel that their leader has their back if something goes wrong, they look for more ways to be more efficient and effective thus enhancing productivity and positively influencing engagement levels.
4) Invest in training leaders and hold them accountable for their leadership - A Dale Carnegie Training Research Study found that 61 percent of employees, who have confidence in their leadership's abilities and believed that senior management was moving the company in the right direction, were fully engaged. Gallup Research on Engagement stated that employees don't leave companies, they leave their leaders. When performance metrics include leadership skills, 360 feedback and employee engagement results, more emphasis tends to be placed on the critical elements of leadership -- everyone wins as a result.
5) Recognize and reward - to avoid burnout and lack of appreciation, employees benefit from socialization and being given time to celebrate their achievements while acknowledging important work-related and professional development milestones.
Employee engagement, a term like work-life balance, appears elusive yet highly sought after. In times when employers may seem excessively externally focused on the needs of shareholders and various other stakeholders, there is a fine line where success walks a tight rope. There it balances the teeter-totter of a customer-centric focus while trying to create equilibrium by inspiring an engaging and appealing workplace. We understand the importance of attracting, retaining and motivating the changing dynamics of a multi-generational workforce and we invite you to contact us. We're here to help so you can focus on what you do best.
Often, one of the last questions a hiring manager or the Human Resources recruiter asks a prospective candidate relates to his or her salary expectations. This moment may be slightly awkward as the candidate states a number or a pay range (s)he wishes to secure. When the candidate and the employer's numbers align, it tends to be more of an easy sell, but what if there is a gap in the pay range expectation? What tends to get missed in this scenario is the chance to communicate a total compensation picture for the prospect. In this early pre-hire stage, talking about what the company contributes to the employee's well-being beyond wages helps to paint a more competitive picture in the overall hiring dynamic.
Wage compensation relates to the financial, material and extrinsic elements of the employee-employer experience and is generally reflected in terms of pay grades or pay scales. When it comes to total rewards or total compensation, this message should include benefit summaries and a host of other costs the employer pays along side the wage component of an employee's remuneration.
An annual benefits summary or total compensation statement has been a communication tool deployed by large companies for a number of years, but hasn't been a resource that many small to mid-size employers have easily embraced. It doesn't have to be an overly costly or complicated communication tool. In fact, a total compensation statement doesn't need to be more than a few pages long. It should capture a list of costs incurred by the company to retain, engage, train, and support the development of the employee. This list generally includes --
In essence, the total compensation statement clearly demonstrates what the employer does to show appreciation for the employee's work effort and dedication to the company. In many cases, it is only the traditional wage amount that seems to do the heavy lifting when it comes to performance and hiring discussions. Employers spend a great deal of their resources dealing with ways to attract and retain employees. The development and communication of a total compensation statement is a healthy way to increase awareness and transparency about the overall employer investment.
If you are interested in the development of a total compensation statement and would like a personalized snapshot of the value of many components of your employees' compensation arrangement, please contact us. We have the resources and expertise and are here to help so that you can focus on what you do best.
As I look around my community, I see more retirement and assisted living centres being built. It has been a gentle progression over the last ten years. Canada is slowing becoming a nation of aging people. The construction industry seems to grasp the shifting needs of Canadians and has planned for these changes in their housing requirements, but for some reason, the uptake on moving the emphasis toward communicating investment strategies targeted at decumulation has fallen short.
The statistics are consistent and obvious. In the U.S.,appoximately 10,000 people retire every working day and in Canada, we see about 1500 Canadians doing the same. Yet retirement education continues to focus on wealth generation and accumulation strategics.
We know a lot about the demographic shifts and the influence of the Baby Boomer population (born between 1946-1964). These numbers reflect 4 million people retiring every year over the course of a 19 year period. This translates in the 22.8 percent of Canadians as 65 or older from 2010 onward. Another way of interpreting the data is to compare 1961 stats to 2010 (when the first boomer turned 65). In 1961, the median age in Canada was 26.3 and in 2010, it was 40.6.
Right now, there are more people between age 55 to 64 who are preparing to leave the workforce than there are those planning to enter it. These numbers speak volumes and I believe we need to confront what lies ahead with mindful and strategic consideration. We have time to plan, focus, and emphasize the changing focus of pension plan communications. A practical approach that fully acknowledges the demographics forces at play will honour those who need the guidance and the continuing support.
For years, the pension industry has placed a concerted effort on capital accumulation and growth, but according to Dr. John Por of the Decumulation Institute, by 2022, $2 trillion in financial assets held by various Canadian financial institutions will be converted into retirement income.
Many people feel uncomfortable or awkward about discussing budgeting, saving, or planning for retirement. Perhaps has something to do with acknowledging the aging process, yet we all know that time waits for no man. More information on the views of Canadians on this topic have been captured in the IFEBP's recent white paper entitled, "The Path to Retirement Security in Canada"
The more energy that can be spent on a multi-pronged approach that provides advice, tools, and information related to decumulation tactics during every phase of the savings and retirement planning lifecycle, the better prepared North Americans will be for the time when they need to begin the divestment process.
With equal consideration, employers would benefit from holding pension workshops that provide resources and support for decumulation of investment assets so that plan members aren't facing a dilemma of what to do just a few short months before their retirement date. Just as it takes time to prepare for a decision of this nature, it also warrants equal focus on preparing for decumulation well before retirement.
It's time to make the leap and bring more of a balance to the dialogue and the tools available to help our aging workforce. Please contact us. We're here to help so that you can focus on what you do best.
Dave Dickinson, B.Comm, CFP, CLU, CHFC
Experienced Benefits Specialist ready to optimize your group benefits and pension plans.