Tuesday, March 10, 2009

Critical to keep good employees during an economic downturn

By the Star
It is critical to keep employee engagement level high at all times, particularly during an economic downturn, so that an organisation can navigate a crisis and return to stability and profitability, say human resources consultants.

Hewitt Associates consultant Yap Yoke Wah said organisations that had highly engaged employees had better financial results and were more capable in building a sustainable business model.

“Our research shows that the best employers have a revenue growth of about 22% year-on-year and are still able to yield such results despite the downturn,” she told StarBiz.

Yap explained that employee engagement measured the extent to which an organisation had captured the “hearts and minds” of its people to build and sustain strong business performance.
“It goes beyond satisfaction (how much I like things here) and commitment (how much I want to be here) to engagement (how much I want to and actually do improve our business results),” she said, adding that one of the top factors driving engagement was opportunities for growth.

Meanwhile, ongoing WorkAttitudes studies by Watson Wyatt Worldwide showed a strong link between employee engagement and key business metrics such as productivity and turnover.

The studies found that highly-engaged employees are 70% more likely than low-engagement employees to exceed performance expectations. They miss 27% fewer days of work due to illness and they represent very low turnover risk.

Talent2 International Ltd director for South Asia Leigh Howard concurred that high levels of employee engagement correlate to improved performance in areas such as retention, turnover, productivity, customer service and loyalty.

Howard said employee engagement ranked well in Malaysia but predicted that its level would be tested as people begin to feel less secure about their jobs.

“As employees begin to feel there are less developmental opportunities at their workplace and are unsure about their long-term future, their sense of commitment and engagement will tend to fade,” he said.

Hence, he said it was not an option to ignore employee engagement during an economic slowdown.

“Don’t hide bad news from employees but instead be open and honest to eliminate gossip and speculation.

“Utilise your line managers in this instance to work more closely with their teams and create a sense of common purpose in their daily work lives,” he added.
Meanwhile, Yap agreed that the level of engagement among the best employers in Malaysia was still fairly high and had not gone through any drastic changes, despite the current economic environment.

“However, globally we are seeing a dip in engagement,” she said.

Watson Wyatt’s studies reiterated that economic uncertainties could potentially weaken engagement and it was crucial for employers to engage their employees even when business had slowed down.

“Companies in Malaysia must create a culture of continuous engagement built on strong strategic direction and leadership, intense customer focus as well as transparent and equitable compensation packages,” it said in a report on its findings.

It added that companies that excel in these areas were likely to make it through the current crisis and deliver superior results in the years ahead.