Towers Perrin Study Finds Learning and Career Development Opportunities Are Key to Attract, Retain and Engage Workforce in China
30 Nov 2007
Employees See Leadership and Management Skills Lacking Data also Shows Engagement Drives Financial Performance
Employees in China see learning and career development opportunities as the key elements in choosing an employer, staying with the company and making discretionary effort to improve the individual' s performance, according to a new survey of nearly 90,000 workers in 18 countries, including 5,000 employees in mainland China.
However, employees in China do not believe their organizations or their senior management are doing enough to help them become fully engaged and contribute to their company's success. There is a significant disconnect between what senior leaders SAY and what they are perceived as DOING by employees. Less than half of employees polled feel "senior management is sincerely interested in employee well-being".
The 2007 Towers Perrin Global Workforce Study found that Chinese employees are among those suffering from a gap between the discretionary effort employees actually want to invest, and how effectively their organizations are tapping into and channeling their commitment and energy. Employee engagement--the measure of people's willingness and ability to give discretionary effort at work--includes rational, emotional, and motivational categories.
The study also found that companies with the highest levels of employee engagement achieve better financial results and are more successful in retaining their most valued employees than companies with lower levels of engagement.
"Develop me and deploy me."
Employees in China consider non-cash benefits such as "leaning and development opportunities" and "career advancement opportunities" as the most important factors in determining to join and stay with a company. "Competitive base bay"is seen as the third attraction driver in China. Employees see "career advancement opportunities" as the top engagement driver. However, only 41% actually believe their employers are providing such benefits.
At present only 16% of the employees surveyed in China are fully engaged in their work − meaning they are willing to go the extra mile to help their company succeed. 33% are partly to fully disengaged, meaning they invest as little energy as possible in their job, and they are probably actively looking for another job.
In Hong Kong, only 5% of employees are fully engaged, and nearly 60% are partly or completely disengaged.
The gap dubbed the"engagement gap" by Towers Perrin is leading to a high level of mobility and a low level of efficiency among many companies. 68% of employees surveyed in China and 73% in Hong Kong are either actively looking for another job, would consider another offer or have already made plans to leave current job.
"In the world's fastest growing economy, learning and obtaining new skill sets is the top priority for Chinese employees as a means to help them stay competitive and employable in the"said Mr. Michael Chan, Senior Consultant, Towers Perrin HR Services. "Competitive pay can get talent in the door, but an employer's commitment to providing sufficient learning and career development opportunities is the key to retaining high potential employees and driving them to make significant contributions to the organization"
Chinese employees seek quality leadership and a socially responsible corporation Leadership emerges globally as a key factor in employee engagement. In fact, eight of the top ten drivers for employee engagement in China revolve around organization and leadership, such as "an organization encourages innovative thinking" and "senior management's values are consistent with actions". "An organization's reputation for social responsibility ranks as the top retention driver. Only 45% of employees surveyed responded that "senior management are sincerely interested in employee well-being", and 48% feel "senior management communicates openly and honestly."
"In China's rapidly changing environment, employees want to know where their companies and careers are going. Leaders and managers need to improve their management skills to better engage their people through communication, transparency and innovation. Leaders also need to ensure that the company's mission, vision and values are aligned with the company's business and people strategies," Mr. Chan commented. "Corporate social responsibility refers to business practices characterized by extensive disclosure and transparency, which companies initiate to fulfill ethical responsibilities towards employees, customers, investors, communities, and the environment. Employees want to take pride in the organization they work for and are looking for senior management business ethics, open communication and transparency."
Higher employee engagement translates into better financial performance
The most striking data about the linkage between employee engagement and financial performance originates from a study of 40 global companies. It involved a regression analysis of company financial results against engagement data. The analysis found that firms with the highest percentage of engaged employees collectively increased operating income 19% and earnings per share by 28% year-on-year. The companies with the lowest percentage of engaged employees actually showed a year-on-year decline, of 33% in operating income and 11% in earnings per share.
In a related study over a three-year period, the firms with the highest levels of employee engagement achieved a 3.7% increase in operating margins, while those with the lowest levels of engagement suffered a drop of 2%.
Substantial differences exist between engaged and disengaged employees. The study found that 91% of engaged employees in China believe they can and do contribute to the quality of their company's products and services; 73% believe they can impact revenue growth. Only about 34% and 14% of the fully disengaged share that view. 90% believe they can positively affect customer satisfaction. In contrast, only 32% believe they can impact customer satisfaction.
"Simply put, employee engagement has a significant impact on companies' bottom line across measures such as customer satisfaction, revenue growth, cost containment, profitability and innovation. The Towers Perrin Global Workforce Study establishes a definitive link between levels of engagement and financial performance, for the first time, begins to quantify that link. It demonstrates that, at a time when companies are seeking after any viable source of competitive advantage, the workforce itself represents the largest reservoir of untapped potential." commented Mr. Chan. "Companies need to understand their employees as well as they understand their customers. Employees are as diverse and varied a group as are customers while most companies do extensive research to identify what drives buying behavior among customers, few use the same energy or tools to understand what influences their employee segments and what it takes to get employees to invest their time and energy in their work." , Mr. Chan continued.
Employee engagement also has a direct impact on employee retention. For example, 49% of the fully engaged employees in China had no plans to leave their company, compared with only 7% of the fully disengaged.
"What is encouraging is that companies can positively influence engagement. What is challenging, however, is that it will take a considerable shift in leaders' and managers'approach to employees. They need to demonstrate empathy with employees and build a culture where employees feel valued and have a chance to develop their knowledge, skills and innovation." , Mr. Chan concluded.
While leaders may have mastered the operational basics of their role, they need to do more to connect with, inspire and obtain the best performance from the workforce. All of these factors are critical for growth. The analysis of employees' views showed how companies can more fully engage their workforce. Senior leaders should process three qualities:
Demonstrate clear inspiration, vision and commitment, be more visible and accessible, and communicate with employees in a more open, transparent manner; Maintain high company ethics and values to create an emotional bond with employees; Give a clearer picture of how the company provides a return on employees' devotion and engagement.
