Employee Engagement Cuts Attrition Rates In Half

Why bother with employee engagement? Sometimes a question is so big, it's nice to break it down into a single, simple example rather than try for the 'big picture approach'.

Hence the reason for this blog. 

I've had the opportunity to work with an employee population over a number of years and see what effect engagement has in a number of different areas - one of which is staff turnover.

Conventional wisdom says that the more engaged a person is within a company, then the less likely they are to leave, and whilst this is true, that's not the whole picture. What is also often omitted from these discussions is that some attrition is actually desirable within an organisation for a multitude of reasons beyond the scope of this particular blog.

So let's take a first look at our population and break it down into some typical 'quartiles' - except in this case we're also going to break out the totally disengaged folks. Those that simply do not participate in any of the people metrics we can gather (and in this case sixteen different measures where used).

Without getting too geeky here, the chart below shows the number people in each engagement quartile - if you imagine a scale of 0 to 100, with the most engaged people scoring 100 - then there are on 38 people in the 75-100 band and 9,770 in the lower 25.

This may come as a surprise to some, but it's a fairly typical pattern. The 38 at the top of this distribution are the 'superstars' of engagement, the culture ambassadors, brand fanatics, cheerleaders and motivators that exist in all organisations and have huge impact on morale (you may know one or two in your company).

Typically, between 5-15% of any organisation are disengaged. They are the people who will tell you (should you ask) that they simply want to come into work and do their job, they don't want their contribution to exceed their role, or gain promotion. This should never be read as a 'happiness' indicator, but accepting that they cannot be more engaged is an unacceptable conclusion. The challenge is in the amount of effort that is needed.

For the sake of statistical stability, and to take some of the 'emotional' interpretation out of this - we'll divide up our population in four (almost) equal quartiles, while keeping our disengaged population separate - and see what happens to each of these groups over two years.

And this is where things get interesting.

In the very first quarter, attrition is four times greater in the completely disengaged group. Although the rest of the population is approximately the same, there is a noticeably higher attrition rate in the lowest engagement quartile too (but no where near as significant).

By the end of year one, the disengaged group attrition is approximately double that of the rest of the employee population, and after two years that pattern is consistent. The chart clearly shows that the more engaged people are, the less likely they are to leave the company - but the significant finding is that even the smallest amount of engagement is enough to halve the attrition rate.

Let's try and quantify this - there are a number of studies that analyse the cost of employees leaving, and the associated recruitment costs. I'm going to use this one by Oxford Economics, published in HR Review last year. It takes into account cost of lost output and recruitment costs and calculates a cost of £30,614 per employee. There are many less conservative estimates which place recruitment costs at between 30-50% of salary, but let's think about that for a moment.

The charts show that zero levels of engagement lead to twice the attrition. Move the engagement needle just one notch, and that problem can be addressed. More importantly that £30,614 cost can be avoided.

1,467 people in this sample were completely disengaged. In the first quarter of this analysis 107 of these left the company. Do the math: 107x£30k = £3.2m.

Stop and think about that for one moment. We know that even the slightest amount of engagement will halve the number of people leaving. Half the number of people leaving = £1.6m.

Not paying attention to employee engagement? Maybe it's time to start.

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Geek Note: The relationship between engagement and attrition shows a strong negative Pearson correlation coefficient of -0.61, Kendall's Tau of -0.75 and Spearman's Rho is -0.85.

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If You Want Increased Sales Productivity - Focus On Culture Fit

Can you place a monetary value on the strength of a corporate culture? Is there any way to prove the value of employing people that fit?

I recently had the opportunity to look at a group of sales people and see if their culture fit predicted quota achievement for the year. 

This is an effective test that relies on some 'hard' data from the finance folks, and some 'softer' data from the HR team. A positive correlation proves that people who align more closely with the organisation they are part of will perform better, especially in high pressure situations. 

Below are illustrations from two sets of data, one taken at mid-year, showing quota achievement against the culture fit of the individuals in question. The second one shows full year results.

The first chart shows a group of 37 sales people making a flying start - everyone over 40% of their quota lies in the top half of organisational culture fit, while not a single person from the bottom half is doing well.

(For the statistically minded this whole distribution shows a weak, but positive correlation using Pearson's method)

The second chart shows the full picture for the year, again illustrating that those in the top half of the organisational culture spectrum are outperforming those in the bottom. In this case 38 people achieved more than 100% of their designated quota, while not a single individual in the lower half made their target.

Note that the actual financial rewards are not shown, these have to remain confidential - but over 30% of revenue came from that top right quadrant. Naturally hiring processes have changed at the company in question - who now place a great deal more emphasis on how potential employees fit with their culture and working practices.

You may also notice that there are no 'brilliant jerks' in this analysis. No high flying sales person with a terrible culture fit. This is clearly a company that took Reed Hastings advice to heart.

If you're paying really close attention, you may also notice the grey markers on the charts - these are people who left the organisation. In the first half of the year, these were generally at the higher end of culture fit with low to medium quota achievement, in the latter half they were predominantly the under-achievers (this is after all a sales organisation).

Culture fit is no cast-iron guarantee of sales success, but the probability of better results increases when you find people that share common values, behaviours and aspirations with the rest of the organisation. 

Defining that fit and working it into the interview process is critical - as is ensuring you can truly define what your culture looks like today. 

Why not take some time do this analysis on a sales team in your company and see if you find similar results? It's a great way for HR teams to contribute directly to revenue improvement.

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Does Your Recruitment Process Suck?

It's nice to see the UK job market improving - many of my friends who have been 'on sabbatical' for a year or so are now finding their way back into permanent employment, but some of the stories they tell about recruitment processes make me want to cry.

Most popular experience - submitting an application, following up and then hearing nothing back. Nada. Not so much as a short 'You're rubbish and we don't like the font you used' email.

In second place - having a face to face interview (in person or on Skype) and hearing nothing back. Given that at this point they have typically met some of the people from the company too - the offence and level of rudeness is even more exaggerated.

Third on the list - repeated contact telling people to 'just wait' while decisions are made, other candidates are interviewed or organisation changes are taking place. In other words, "Our time is valuable, yours isn't, we're trying to find someone better, but if we don't we might just hire you."

I could carry on with these - from systems that eliminate candidates who don't enter their expected salary in the right ballpark, to skills not counting if they have been learned in other industries (I especially enjoyed the tale of a large financial institution looking for a full time employee engagement and culture specialist insisting that they would only interview candidates from other banks......)

Ask yourself one question. What impression of these companies are people left with? What do you think they tell their friends? How likely is it that their brand will be improved from these interactions? 

Then there's the personal level. In several of the cases above, job offers were eventually extended. How valued would you feel as an employee walking through the door on day one after having been treated this way (if indeed the offer was accepted)?

Contrast this to a conversation I had a few weeks ago on a flight back from Barcelona. 

Several members of the executive team of a very well known global sportswear company were sat around me, and I got talking to their new head of UK Sales & Marketing. He was four weeks into the role - and still in 'training'.

During the recruitment process he had interviewed with a number of people from the company. Finally he sat down with the Managing Director for a discussion. 

Within 24 hours he was offered the job.

Despite all the efforts of his previous employer to retain him, he chose to move on. And why wouldn't he? They wanted him NOW. Here was a company that felt confident enough in his abilities to extend an immediate offer. 

A company that made fast decisions, that was passionate about their products, and finding the right people. Above all else, one where taking this 'risk' was acceptable, and where it was part of the company culture to be enthusiastic and passionate about everything - including recruitment.

The passion for his new employer, their product and ethos was palpable. It rubbed off on me, and although my family have all been big fans for years, we've spent some money since on refreshing our supply......

I spent some time with Zappos a few years ago. Early on, the HR team realised that recruitment was not all about finding the right people for the company - it was also about leaving those 'rejected' from the process with a good feeling about Zappos. So they started to recommend other companies that may be a better  'fit' to candidates that didn't quite make it - using experience and a library of culture data.

The company 'powered by service' extends that to everyone that touches them. Because it's good for business, and it's a nice thing to do. 

So why not take some time today to review how well you do with the 'recruitment experience' in your company? You may not feel it's worth the effort to treat people well - but can you really afford not to in this age of social media and brand awareness?

What does your recruitment process say about you as a company?

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Bypassing Parental Controls With BT

Every so often I feel the need to share some 'internet control' experiences, this is my third 'off topic' blog - the first of which concerned turning on parental controls, the second about the prevalence of porn on Twitter. 

Recently I've seen plenty of evidence that inappropriate content is showing up on childrens' computers despite their parents locking down devices and restricting access.

Just to be clear, there are ALWAYS ways to circumvent these controls. But many cannot work out how - and I'm certainly not going to share methods for doing it. That doesn't mean you should ignore the problem though.

If you're a BT broadband customer (one third of UK households are), you are almost certainly providing simplified access to the pornosphere for your children and their friends.

Some background first - if you're of a mind to block inappropriate material, then you have probably enabled parental controls on mobile devices and computers in the house.

You may even have decided to completely stop the flow into your house, and had your provider block it at source. There's a simple way to do this with BT, follow this link, sign in with your credentials, then scroll down to the 'extras' section and click 'Manage' in the BT Parental Control box.

Congratulations, you've successfully blocked inappropriate content coming into the house, (although how porn and alcohol end up in the same filter category is beyond me).

Wrong.

Actually it's very easy to bypass this, not for you, but for your children or for guests in your house.

Part of the BT offering is to allow your home router to be used as a personal hotspot for anyone. Check out your wi-fi network now, and you'll see 'BTWifi-with-FON' listed.

This means that if I am in range of any BT router I can use it as a wi-fi hotspot (by signing in with my BT account credentials).

Many parents give those credentials to their children so they can access wi-fi and not use mobile data plans, so usernames and passwords get passed around at school, enabling your child to use someone else's details to see whatever they want through your router.

The good news is that you can opt out of this, but it's not that easy, and after half an hour of navigating through BT's website to a human I finally got this link, which allows you to opt out of providing a hotspot: https://www.bt.com/wifi/secure/statuscheck.do 

Bizarrely if you don't have a btinernet.com email address you need to find an actual person to do this for you - this link may help. (Click problem with service, then broadband and eventually this magic chat button will appear). 

If all this seems like a huge amount of hassle, then that's because it is. I'm not sure that you should have to 'opt-in' to see adult content, that's a much larger debate, but if you do want to turn off adult content, then BT could make it a great deal simpler (and not leave the open hotspot wide open for abuse). 

Not enabled parental controls yet? Don't think you should? Read this and it may change your mind.

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Accepting Poor Behaviour

I've resisted the temptation of posting any kind of 'workplace' blog involving the Top Gear crew or the BBC in general. Not only does it seem to be marginally exploitative, but having seen a progression of death threats aimed at people who dare criticise I wasn't sure that I needed that kind of attention.

But then I caught a few minutes of the Wright Stuff on Channel Five recently, where Richard Madeley and Anne Diamond were discussing the Top Gear 'fracas' and I realised that I was hearing the same old 'abuse' story - but from TV personalities rather than corporate employees.

This shouldn't surprise me - often we forget that the folks staring out at us from the gogglebox are 'real' people with real jobs, mouths to feed and mortgages to pay.

What aggravated me was that both Richard Madeley and Anne Diamond both spoke of this kind of behaviour happening to them in the past, with a degree of implied acceptance that this was 'normal' behaviour in their industry. 

I love Top Gear - I find Jeremy, James and Richard great entertainment. There is no doubt that they provide a huge amount of revenue for their company, have immense talent and will be sadly missed by the vast majority of the viewing public (at least until they appear elsewhere). 

But.

When you verbally and physically assault someone it is wrong. No matter who that person is, but particularly when that person is 'subservient' to you in the organisation, perceives that their job depends on you, or that you have power to make them suffer. There are no excuses - and in case I'm in line for some hate mail here, Mr Clarkson would appear to agree.

Here are just three corporate examples from my experience, and I'd like you to imagine how you'd feel if this happened to you....

• The executive, who when aggravated, stressed, or simply in need of some entertainment thought it was OK to kick chairs at people in their office - or even outside their office door in the corridor. Sometimes I think the Lego policeman in the movie worked for him at some time.

• The senior leader who denied the whole office the right to go home on Christmas Eve if one person dared to ask what time they could leave - holding everyone in a frenzy of discomfort for the whole day (and for several weeks beforehand).

• The divisional head who enjoyed swearing loudly and publicly at staff so much, that even after multiple complaints, and subsequent warnings he continued until he had to be escorted off the premises - permanently.

Behaviour that you accept spreads through your organisation - this works equally for positive and negative behaviours, but the negative ones spread much faster. Simply shrugging it off by saying "well that happened to me too" gives tacit approval to others to mimic poor behaviours, and actually promotes their belief that it's necessary to fit in.

If you think any one of the examples above is even remotely acceptable behaviour, then I suggest you go and find a job where you can work alone, far from others, and if possible far from society in general.


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Learning About Student Culture

I've been spending time lecturing second year degree students recently - and it's become something I really look forward to.

Teaching has always been something I've wanted to try, regular readers will note that I have a great respect for the profession and the challenges it faces (mostly from bureaucracy and meddling), so when I was offered the chance I jumped at it.

(Read my blog on 'Disempowerment Culture' to learn more about my views on the teaching profession) 

I've done plenty of adult coaching, auditorium presenting, and of course 'dad teaching' at home - but this has been my first experience of teaching in a formal environment, and I've learned a lot.

I've learned that I need help in lesson planning. Three hour lectures don't work in 'death by presentation' format (actually, half hour sessions don't either) - and there are exams and assessments to teach. Thankfully a fellow lecturer, and the head of the department have been great mentors for me despite my lack of experience.

And then there are the students.

Now let me be clear (and I know some of them will read this), they are a great group of young men and women, and I enjoy teaching them. For the most part they are enthusiastic about what we're doing, ask questions (never enough!) and keep me challenged to find interesting ways to present things.

But, and there is a very big BUT here - the education system is letting them down.

While I've had a learning curve to contend with, my students have it much worse. 

When I was studying at University a lecturer showed up, spoke for a few hours and took questions. Generally they used acetate sheets, projectors and chalk boards (yes I am that old), and when the lecture was over we were expected to go the library and find books to study further.

Assignments were given, but with very little guidance, and the examinations were fierce because you never new the nature of the fiendish questions the professors were going to come up with to challenge your learning. But at the end of the process, if you worked hard enough you left with a degree.

And this was fine, because the school system had prepared me for it. By the time I finished my A' levels I was used to this method of learning. There was a little more structure, but we were not taught everything you needed to know to pass the exam - it was expected that you self taught and broadened your learning in order to get higher grades.

Not so any more. The advent of league tables and inspections, competition for funding and oversight has given way to a learning culture that requires a spoon fed approach. Teachers are teaching to curriculum, and more crucially to get results for league tables.

It is now in the best interests of the school to teach precisely what is expected on the exam paper.  No more, no less. Repeating over and over again the things that teachers know will get more passes. An increase in coursework has further narrowed the 'self study and learning' experience - and no amount of 'learning to learn' lessons will help (yes, children really do that at school).

Now when students arrive at University they have never been asked to struggle with concepts, to learn, to hear - "go and find out for yourself and we'll talk next week" from their lecturers. When things go wrong, answers are expected, not learning.

Add to that the additional complication of the 'funding' system, whereby students have to pay £9000 per year to be taught. (A total betrayal of every value our country has ever had by the way - tax me more and reduce the number of places, but education should ALWAYS be free).

A lecturer friend in London had spoken to me about this before, but in a nutshell it means that there is an underlying feeling amongst students that they are buying their degree. In some sense it's a good thing - there are higher standards demanded from lecturers  but there are major downsides - click here to read my blog on valuing others.

Here's an illustration. The most common question during my first two lectures was a variation on "will this be on the exam", and "will this be part of the coursework". Of course the answer is "It might be", but the fact that it's being asked at all is troubling.

Early on I was asked to post my slides to the University portal ahead of the lectures. This I've learned comes from a strange modern practice called 'reverse learning' where students supposedly go through the presentation and then come prepared with questions.

This won't work with me because firstly I can make six slides last for three hours (we talk, use the whiteboard and paper, and do practical exercises), and secondly because I have a strong feeling that students wouldn't show up if they new exactly what was going to be taught (but maybe that's more about my attitude than theirs).

One thing is certain - if this doesn't change soon, I would question the value of institutional on site learning. University is meant to provide a collegiate learning environment where students learn from their professors (and each other) in many ways - through text, practical experience, conversation, lectures and shared experiences. But the modern education system is not preparing them for that jump.

If we want 'battery farm' learning, then all we need to do is keep doing as we are - but if the UK wants to create future global leaders then we need a rethink.

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Tech Free Sunday

We've been experimenting at home with the idea of taking a day off from technology for one day a week - how hard can it be?

Very hard.

Some context - I have four children aged fifteen, twelve, ten & four (boy, boy, girl, boy). My eldest and I take it in turns to be 'most addicted to technology' - but recently he started to edge past me on the league table.

So we decided six weeks ago that Sundays were to be internet, computer, tablet, phone and game console free. We still have the radio, and we still have TV - but that's as far as it goes.

Week 1 - definite withdrawal symptoms, increased levels of grumpiness, especially from my eldest and youngest son (and myself to be honest) for at least two hours - which then resulted in them all pitching a tent in the garden and then sleeping in it for most of the following week. iPhone withdrawal hardest for me.

Week 2 - arguments the night before about whether to try it again ended with my Wife and I pointing out that the reason we were banning technology was precisely because of this level of addiction. On the day - much excitement at having a Nerf war which lasted three hours in a nearby park. Still missing my iPhone.

Week 3 - slight improvement, although new tactic from two children insisting that computers were needed for homework. Internet opened up with a warning that next week they better get their work done on Saturday. 

Week 4 - Acceptance that the rules were not about to change - homework done ahead of time. Much walking with dog, and then National Trust visiting for early evening picnic. Well picnic is too grand a word - more like loads of scones with jam and cream :-)

Week 5 - Day spent cycling. All day. With breaks for the pub.

Week 6 - Yesterday spent predominantly with Frisbee and radio, before settling down for the world cup final, and yes, we let the eldest three stay up and watch it because we're bad parents. Expecting lots of yawning at school today.

So we're carrying on with it. We have a better day for the break, together as a family for the most part. Everyone is less selfish about what they do - rather than retreating into their own world, we all find things to do together - and the world does not stop turning because we cannot use email, or look at the BBC news site, or send texts, or play Minecraft......

The corporate part of this blog, the part that ties this to engagement and culture? We keep doing new things. If you take some time away from the tech and let your brain work properly, you may find some more innovation creeping into your workplace. Live in the moment, connect, look up.......

But why not give it a go at home too? It's not easy, but for us it was certainly worth the initial pain.

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