Opinion and Analysis
Strive to make your company a magnet for talent
Kenyan companies love awards. Whether it’s an award for best company amongst SMEs, company of the year, best Chief Executive Officer: you name it, there’s recognition to be achieved in every shape or form. All these awards of course focus on the very reason the company exists: to make money.
The awards focus on perceptions of profitability, good management and sound execution of strategy leading to customer growth. But these awards only reflect what companies want us to see, the spit and polish that have buffed the exterior.
Rarely do we get a peek at what goes inside and how the most important resource – the employees – regard the very companies that are feted glamorously. Who knows what it takes to get these companies to perform? Are their employees happy to be associated with said companies or do they want to stab their necks with a blunt fork and bail out when the first opportunity presents itself?
Last year, I wrote about the Fortune Magazine’s list of best 100 companies to work for. Fortune Magazine (famous for the Fortune 500 ranking of the largest American corporations) publishes an annual list of the “100 Best Companies To Work For” which provides interesting insight on how other companies not only attract but, more importantly, retain talent.
The conclusions are not rocket science.
At the end of the day, salaries do not rank highest when employees are assessing their work place. It is having a sense of inclusion, a good work life balance and non-monetary benefits such as day care for children, free lunches, telecommuting (working from home) and 100 per cent health care coverage.
Last week, Deloitte Kenya launched the Best Company To Work For 2012 Kenya. Companies are invited to apply to have the employees give an honest assessment of whether their organisation is a good place to work thus offering a unique bench-marking opportunity for organisations to rate their own employee offering within their industry as well as compare themselves to other industries.
This of course is far different from the more insular Employee Satisfaction Surveys (ESS) that many companies go through the mechanical motions of undertaking. You know what I’m talking about: the Human Resource director/manager is given explicit instructions to run a boilerplate survey on whether employees are happy.
In good times, when bonuses have been paid, everyone’s happy.
In bad times, when the company is cutting costs faster than a River Road barber cuts hair, the surveys churn out venom and bile. Strangely, in many companies ownership, production and execution of the ESS lies squarely in the hands of the human resource department.
This is an absolute fallacy. ALL management starting from the CEO to her direct reports to the line managers below the direct reports are responsible for employee satisfaction and their performance contracts must reflect that fact.
It takes a very brave CEO to publish negative results of an ESS but an even braver CEO who takes full and personal responsibility for ensuring that the negative indicators are acted upon.
Braver CEOs are few and far apart. So it will take the bravest CEO –in my opinion- to stand up and say: “Let’s see if we’re the best company to work for. I want to see how our company is rated against our peers.
I want to see if our brand can attract talent because our employees say we are the best.” An external survey might actually be what the doctor ordered to disabuse any CEO of the notion that his employees are dying to work for the organisation.
The survey is also a good measure for company boards to evaluate the CEO’s leadership capabilities, as they only know what the CEO allows his managers to present in the quarterly board packs.
Why should such a survey be important for an institution?
Benchmarking against peers
According to the Great Place to Work, who run the 100 Best Companies to Work For survey on behalf of Fortune Magazine, 95 per cent of leaders from companies that have appeared on the Best 100 list say that being recognised for their work place culture positively impacts the bottom line.
The Best Companies (primarily in the United States) attract top talent and have a higher retention ratio with turnover being two to four times lower among Best Companies than industry norms.
Independent studies have also shown that publicly traded Best Companies consistently outperform major stock indices by a factor of three. While you may have heard of the saying “happy wife, happy life” at the 19th hole of your last golf game, happy employees translate into better output which conversely translates into higher bottom lines. It’s not rocket science.
But participants at the launch reflected the ongoing challenge of working with a younger workforce. One participant from a leading technology company shared the fact that their employees are happier to take a lower salary if it meant that their creative product ideas would be implemented and they would be permitted a profit share of those products in their lifetime of use.
Inclusion and both monetary and non-monetary recognition is what the relatively young workforce of this, and many other technology companies are demanding.
Now imagine that such a profit share mechanism is put into place –which is really not different from a tiered sales commissions structure over the lifetime of a term product – and you begin to see the best creative software brains knocking on your doors to come and work for you.
The upside is that you keep your salary costs low and your success fee pegged to your bottom line. The downside – what downside? The Ibo have another proverb: “A man of sense does not go hunting little bush rodents when his age mates are after big game.”
An organisation that is confident in its leadership capabilities will go for the big game: bench-marking itself against its peers.
Employee Satisfaction Surveys are for the small guys!