Employee Engagement - Kronos

WHITE PAPER

Employee EngagementYour Last (and Best) Source of Competitive Differentiation

WHITE PAPER | Employee Engagement: Your Last (and Best) Source of Competitive Differentiation

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INTRODUCTION

The importance of employee engagementThere’s a lot of talk today about employee engagement. It “has become the top issue on the minds of business leaders, directing us to an entirely new model of management,” according to HR research group Bersin by Deloitte. Conferences are swollen by earnest discussions of how to address and manage millennials and Generation Y while also satisfying the needs of older staff.

Why has employee engagement become such a hot topic? In part, it’s because other chal-lenges have been successfully mitigated: It’s easier than ever to raise funds to support new ideas. The web means that companies can market and sell all over the world without necessarily building channels and offices. And technology infrastructure’s inexorable shift to the cloud has meant that upfront IT costs are much lower than ever before, and companies can scale up and right-size without onerous penalties related to hardware purchasing or software licenses. So, the spotlight has moved to hiring and retention.

And then of course there is the ever-present demand for individuals who are smart, think on their feet and out of the box, and who are the stars of their organizations. But the attention paid to employee engagement is also related to the law of supply and demand. We know we want to have people who excel and go beyond the basic requirements of surviving in their jobs; we want employees to act as passionate advocates and exemplars of their employer’s brand. But those people are in short supply. Competition is intense, and employees today are more willing to move to other organizations. Our own survey in August 2017 of over 1,400 workers across various industries showed that nearly half of them had between two and three different jobs in the past 10 years. Therefore, organizations need to fight hard to attract and keep the best talent.

That scarcity is playing out everywhere. For example, logistics companies are struggling to hire and train enough staff. According to the Federal Transit Administration (FTA), in 2016 there was a shortage of nearly 35,000 light goods vehicle (LGV) drivers. Retailers also face a constant battle to meet ever-changing consumer demand amid high rates of employee churn. In knowledge worker sectors, the challenges are accentuated. How do you motivate intelligent, creative people who are able to move to rivals in a global market where rewards are high?

Competing for workers and kindling their passion and creative urges requires building a strong and positive business culture. Not doing so won’t just slow the company down, it will also lead to a loss of brand equity. Social networks and websites like Glassdoor for assessing workplaces and employers mean organizations today have no place to hide. Employees who feel they have not been treated well have no qualms about sharing their experiences with the world.

In a world where innovation, new ideas and outstanding levels of service are prized, finding and keeping top people is enormously important. The tactics companies deploy to attract and motivate employees will often be the difference between success and failure … and a gold-plated or toxic reputation.


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And yet, despite all the talk about its criticality, a Gallup poll says employee engagement is “stagnant.” Indeed, our own aforementioned survey revealed that less than 40 percent of respondents thought they work in an engaging environment, and only 21 percent felt they were valued by their seniors. So, how do you deliver employee engagement and show a return on that investment?

In this report, based in part on Gregg Gordon’s latest book, “Your Last Differentiator: Human Capital,” we will cover:

• The importance of transparency, trust, and respect

• Three ways to unleash the power of employee engagement:

– Innovation and ideation – Utilization – Customer experience

• Making employee engagement a reality through workforce management

THREE PILLARS OF EMPLOYEE ENGAGEMENT

Transparency, Trust, and RespectTransparency, trust, and respect are three inputs an organization needs to drive that desired outcome of a highly engaged workforce. Get these right and you maximize your chances of keeping staff motivated and enthused.

Transparency Expecting employees to perform at their peak without sharing the “big picture” is like asking someone to book a flight without telling them the destination. For people to add maximum value to their organizations, they must understand how their work and their roles add value to the overall business plan and objectives of the organization.

When employees know the direction and vision of the organization, they contribute actions and ideas that advance the company, rather than just meeting their personal goals or addressing a narrow sphere of influence.

Regular communication is key. Managers need to deliver updates to employees about the status of the company and the progress against the plan. This should take place both at group and one-to-one levels to weave in all the feedback.

TrustA general shortage of skilled workers and the race to digitize industries is resulting in a smaller number of top-performing employees taking responsibility for a larger share of the business workload.

More and more of these employees work remotely and take advantage of more and more digital tools for productivity and collaboration. “Presenteeism” and the personal office

Indeed, our own

aforementioned survey

revealed that less than 40 percent of respondents

thought they work in an

engaging environment, and

only 21 percent felt they

were valued by their seniors.


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desk with fixed-line phone are becoming less common. Trust doesn’t simply mean letting go of employee control and accountability but delivering the right working environment, appropriate training, and tools to allow employees to be successful.

The investment required here can be significant, so engagement is critical — but micro-management and demanding minute-by-minute justification is counterproductive.

RespectThe third pillar critical to driving engagement is respect. All employees want to have their efforts recognized by their managers. Quarterly targets and annual performance reviews aren’t enough: Recognition needs to be provided regularly.

This doesn’t just mean celebrating successes; we also need to understand project failure without browbeating individuals who were involved. When employees are asked to work on projects that carry high risks, their efforts should not go unnoticed or unappreciated, even if the results of those projects aren’t positive. If failures aren’t used as lessons, people will learn to take only safe assignments and will only proffer easily accomplished ideas.

Smart employers recognize that a healthy work/life balance is an important element to driving engagement. However, our survey showed that only 35 percent of those ques-tioned have the option for flexible working. Employers, therefore, also need to recognize that employees have other interests besides work. If they enforce tough policies that force an employee to choose between work and family, then their people will become disengaged. By understanding and respecting the whole person and not simply the “work” person, employees will feel better valued and will be more engaged.

INNOVATION AND IDEATION

A world of opportunity Digitization creates new opportunities to transform businesses. “Business as usual” is no longer acceptable as industries face constant change. Look, for example, at disruptive companies that have disintermediated industries. Uber, Spotify, Airbnb, and Netflix are canonical examples, but there are many others and not all of them are startups. Apple was over 30 years old when it introduced the iPhone and iTunes to transform the smart-phone and entertainment markets.

Other businesses are using subtler forms of digitization to drive innovation, such as evolving from using manual processes and Excel spreadsheets to using machine learning for more effective workforce scheduling, or providing self-service to employees via mobile apps.

One of the benefits of an engaged workforce is generating a pipeline of new ideas. Acting on these ideas can transform a business in several ways: Taking links out of processes, saving money, or creating revenue streams from new products and services.

Smart employers recognize

that a healthy work/ life balance is an

important element to

driving engagement.


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A Gallup Management Journal survey revealed that engaged workers are more likely to innovate and react positively to creative ideas offered by fellow team members.

So how, practically, can this take place? First, ideas need to be captured. Empowering employees and creating appropriate communication channels — such as self-service terminals or mobile apps — are essential.

But ideas on their own aren’t enough. Leaders need a model for executing these ideas and turning them into reality — ideas in isolation are a waste of time. Business cases and proof point will be needed to convince budget holders that the idea is worthy of invest-ment. Happily, creating this necessary body of evidence has become easier with the use of data analytics and forecasting.

Leading companies such as 3M, Google, and Amazon all have formal methodologies to encourage, vet, and invest in executing their employees’ ideas. But this approach is not limited to the elite few, and ideas can be as much about addressing issues as creating new opportunities. Innovative employees at a high-performance industrial ceramic manufacturer used workforce management data to produce audit reports that tracked the full production history, providing quality assurance to their customers and saving the company multimillions of dollars. A culture of engagement and management’s openness to new ideas safeguarded the future of the business.

Earlier in this report we referred to the importance of accepting occasional project failure as an accepted part of empowering and trusting individuals. To foster an innovative environment, it’s important to have a company culture where failure is not perceived as negative but used as a learning process. “Fail fast” has become a mantra of the web generation but, as the Harvard Business Review has suggested, it’s even more important to fail cheap.

In order for that to happen, innovative companies should:

Lower the cost of experimentation. Scaling back and running frequent trials and pilots need not be expensive. There are lots of low-cost ways to test critical assumptions, for example, using cloud services or time-limited services.

Experiment in the right order. Many companies spend a lot of money answering the wrong questions and will seek to perfect a technology without understanding whether there’s a market need. Assess strategic risks first, because they are often what will sink an idea.

Avoid innovation for the sake of innovation. This is a common error. Build what customers tell you they want, not what you think they want.

Increase the pace of decision-making. The use of data analytics, where possible, helps support a faster time-to-decision cycle.

Many companies spend a lot

of money answering the wrong questions and will

seek to perfect a technology

without understanding

whether there’s a

market need.


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Be lean. Whether you’re a startup or large enterprise, you should have a lean and agile approach. Don’t try to get the perfect solution from the start but instead start small with a minimum viable product. Test and validate, it then build in small increments. It will be easier and more cost-efficient to change approaches if needed.

UTILIZATION IN THREE DIMENSIONSDisruptive companies often find innovative ways to deploy their resources to maintain a competitive advantage, and high utilization of resources leads to high levels of produc-tivity. We see three different dimensions to this, so we refer to what they do as “utilization.”

First dimension: Time and wage utilizationDisruptive companies identify wasted time throughout the organization and reallocate that time for productive activities: It’s all about using precious labor hours more effectively. But these successful organizations also look to do the same with wages, optimizing salary budget utilization by identifying wasted costs caused by incorrect staff overpayments and eliminating excessive overtime costs.

Effective workforce management can help identify and reduce wasted time and effort. By automating processes such as timekeeping approvals, workforce management can dramatically reduce unnecessary administrative effort. Workforce management also provides visibility into how time is being spent, to help identify and eliminate waste in processes and employee activities.

It can also optimize wage utilization through more accurate timekeeping, capturing hours worked more precisely and ensuring consistent application of pay and overtime rules. Another advantage here is the ability to identify staff working at base pay and those already working overtime hours. This enables better decisions to be made as to who to use on particular tasks without paying for overtime hours.

U.K. firm London Energy addressed time and wage utilization through a workforce management solution. Previously, employees logged their own working hours: A process that was prone to errors and, with workers at remote locations and 75 different pay rules, there was little visibility into how time was being spent. London Energy now has a clear and reliable view of timekeeping records for all employees, and visibility into under- scheduling has also helped the company increase productivity.

Second dimension: Skills utilizationThe best organizations take full advantage of the skills and experience of their people, using the right person for the right job to maximize the knowledge and abilities within the company. Doing so maximizes productivity, minimizes costs, and fosters innovation. Using a highly skilled person to carry out unskilled tasks is a waste of money, and using people with the wrong skills for a particular task can increase project lead times and even, in some industries, cause safety issues.

Disruptive companies

identify wasted time

throughout the organization

and reallocate that time for productive activities.

The best organizations

take full advantage of the

skills and experience of

their people, using the right person for the right job to maximize the

knowledge and abilities

within the company.


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There are two aspects to skills utilization. One is making sure the staff is suitably trained and certified, either by employing people with the right skills or by providing appropriate training to staff. The second is redesigning jobs and tasks to take full advantage of the range of abilities of the workforce. This latter approach is becoming more prevalent in forward-thinking organizations.

An example of this can be seen at Hozelock, a U.K.-based manufacturer of gardening equipment. Hozelock’s business is highly seasonal, and it has extreme and unpredict-able peaks and troughs in demand from retailers that sell its products.

In order to deal with this, the company retains a core of skilled and experienced full-time staff, and then hires temporary labor during peak-demand times. It has identified production operations that require little training and ensures that temporary labor is assigned to those activities. This means much quicker ramp-up when demand spikes and faster fulfillment for retailers. Hozelock also monitors labor usage and work movement in manufacturing, which has generated insights that led to redesigned processes. The result has been an 18 percent improvement in effectiveness of assembly lines over four years.

Another example is the pharmacy retail chain Walgreens. It’s difficult to get an appointment with doctors on short notice due to the skill shortage — but also because many regular office hours often clash with doctors’ office hours. At the same time, surveys show the vast majority of people would prefer to treat themselves with pharmacy-obtained drugs rather than see a doctor. Walgreens increased the training scope of pharmacists and hired Family Nurse Practitioners to offer basic diagnoses and treat minor conditions. The result has been a new business model and differentiation from online medication providers.

Workforce management systems can be a powerful enabler of skills utilization by intelligent scheduling of the right people, with the right competencies and skills, to a particular job, task, or shift. This ensures regulatory compliance as well as optimizing efficiency. Systems can also forecast the skills mix that will be needed in the near future, based on previous trends, again matching tasks with the right competencies.

Finally, workforce management systems analyze the mix of people within a particular location to outline where there may be skills gaps and to help shape training and recruitment strategies.

Third dimension: Crowdsourcing Crowdsourcing is often seen as the domain of the agile, innovative startup but forward-thinking organizations across the board are also using forms of crowdsourcing to help them innovate. Devising new ways of using the inventiveness of many people, often within their own organizations, is providing these enterprising organizations with a differentiator.

A great example here is Walmart. The supermarket giant has been testing a model whereby it pays employees a small premium for delivering packages to customers on


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their way home. All parties benefit: The employee has a higher wage, the customer gets faster delivery, and Walmart saves on paying a delivery company. Multiplying this across hundreds of thousands of employees makes it a powerful internal crowdsourcing solution.

Think also about crowdsourcing labor to fill open working shifts. If a shift becomes available, it can be made widely and instantly visible to all eligible staff through digital media such as texting. Employees can request to fill that shift, if it suits them, and the shift can be allocated on a first-come, first served basis; by seniority; or by some other method. Cohen’s Children’s Medical Center in New York allows nurses to swap shifts with each other by self-scheduling via a mobile-friendly system that ensures the right blend of skills is always available. This approach ensures patient care coverage and rewards staff who can work at times that suit them and are therefore more engaged.

SUPERIOR CUSTOMER EXPERIENCEAfter innovation/ideation and utilization, the third theme for making employee engagement reality is delivering a superior customer experience.

Companies are discovering that competing through one dimension, such as price, is not enough in a highly connected digital world. Walmart learned that simply selling the lowest-cost product won’t win loyal customers. Competitors such as Amazon win customers by providing a compelling overall customer experience, even though it is not always the least expensive. Procter & Gamble found out the hard way that owning the retail channel was not enough to stop smaller, more agile competitors such as Dollar Shave Club from disrupting its market. The taxi industry continues to reel from its dependency on protective regulations and outmoded forms of hailing rides in the face of competition from Uber and others that offer superior convenience and value.

The customer experience can be reimagined in many ways and is a rich field for innovation. Amazon, for example, focuses on a simple, frictionless buying experience that simplifies purchasing. Grocers are building out profitable ready-to-eat meals to save time for their busy customers. Hospitals are creating relaxing environments such as a campsite within MRI rooms, so that children are put at ease and spend less time in the room; this also allows more children to be treated.

Customers want an overall better and consistent experience when interacting with the brand in all its dimensions, not only when consuming its product or service. Once again, engaged employees are the key to delivering exceptional customer experience in both customer-facing and back-office roles. Employees who have the right skills and training and can anticipate customer demands and deliver high service levels will deliver a better and more consistent customer experience and gain greater job satisfaction.

Workforce management

systems can be a

powerful enabler of

skills utilization by intelligent scheduling

of the right people, with

the right competencies and

skills, to a particular job,

task, or shift.

Forward-thinking

organizations across the

board are also using forms of crowdsourcing to

help them innovate.

Customers want an overall better and consistent experience when

interacting with the brand in

all its dimensions, not only

when consuming its product

or service.


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MAKING ENGAGEMENT A REALITYHow can you make employee engagement a practical reality within your organization through workforce management technology? The following table provides some brief guidance by considering a series of employee engagement tactics, how to operationally achieve each one, and how workforce management can help enable them.

Employee Engagement Tactic Operationalization Strategy Workforce Management Supporting Technologies

Flexible Working • Align flexible workforce accurately with customer demand to control costs and maximize performance.

• Automate the tracking of all forms of worked and accrued hours to ensure pay accuracy and mitigate manual input.

• Time and Attendance automates the capture of worked hours, providing accurate payroll and tracking of all forms of accrued hours and holidays

• Absence Management monitors and plans all forms of absence

• Demand Forecasting and Scheduling has advanced algorithms that use historical data to forecast future demand capacity and scheduling tools that deploy the right people, with the right skills, at the right time to maximize revenues and customer service, but control costs

Training Investments • Structure work assignments appropriate to skills and cost of the employees — i.e., lower-skilled tasks are assigned to lower-paid, less skilled workers and vice versa. When work is seasonal, it makes financial and productive sense to assign temporary workers to the quickly adopted, lesser skilled, and lower-cost tasks.

• Time and Attendance provides records and reports on individual skills and certification

• Demand Forecasting and Scheduling aligns accu-rate and appropriate employees with customer/business demand, based on skills and cost

• Activity Tracking and Shop Floor Data Capture delivers visibility into how quickly workers are becoming productive and whether additional training may be necessary

Career Progression • When career advancement results in a change of role and an increase in pay, it becomes imperative to improve productivity and efficiency in order to control costs and align employees appropriate to roles.

• Time and Attendance automates payroll processes, improving accuracy and reducing costs

• Demand Forecasting and Scheduling puts the right people in the right place at the right time and cost

Greater Communication • Use two-way communication and feedback to share business objectives and targets, and gather information on how processes and services could be improvements.

• Mobile devices and hardware terminals provide the ability to disseminate and collect workforce related data

• Workforce Analytics and Reporting provides a holistic and transparent assessment of what has been done and what needs to be done

Recognition of Performance • Frequently monitor and celebrate the performance and output achieved by employees.

• Compensate and reward accordingly.

• Activity Tracking and Shop Floor Data Capture monitors the productivity and performance of individuals and teams, giving managers accurate data to recognize where recognition and reward should be given

• Workforce Analytics delivers insights into performance based on data captured from all modules and from external systems such as ERP


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CONCLUSIONIn a hyper-competitive, increasingly global economy, it’s harder than ever to hire and retain top-performing people. However, a combination of processes, strong management, clear communi-cations, mutual trust and respect, and effective workforce management tools that match employee needs with organizational and customer benefit can provide the means to build strong employee engagement policies that provide win-win-win results.

Technology has created many disruptive opportunities, and low interest rates and crowdsourcing have provided the opportunity for small businesses and startups to grow but, ultimately, people are the differentiating factor. Organizations that embrace this approach will be best positioned to deliver that “last differentiator.”

For more information Visit https://yourlastdifferentiator.com to gain more insight into the importance of human capital and Gregg Gordon’s book findings. Visit https://www.kronos.com/industry- solutions/retail to learn how workforce management solutions are delivering value in your industry.

Employee Engagement Tactic Operationalization Strategy Workforce Management Supporting Technologies

Fair Treatment • Ensure the staff is paid accurately and equitably according to actual hours worked and correct rules and policies.

• Provide equal opportunities for overtime, based on staff preferences and policies, without favoring certain individuals.

• Ensure the staff is assigned to tasks that align with their abilities and experience.

• Time and Attendance automates the accurate capture of worked hours, executing accurate payroll according to defined rules, company policies, and legislation

• Demand Forecasting and Scheduling deploys the right people with the right skills and experience, considering company policies, their overtime and working hour preferences, and accrued overtime of them and their colleagues

Employee Empowerment • Allow individuals and teams input into business improvement discussions.

• Enable and encourage staff to provide suggestions and ideas for innovation and process improvement.

• Provide the ability for staff to specify preferred working hours, select open shifts, and swap shifts with colleagues, giving them the optimum work/ life balance.

• Workforce Analytics delivers insight into performance data, with the ability to drill down into specific metrics for decision support

• Mobile Devices and Hardware Terminals provide the ability to disseminate and collect workforce related data, with the capability to capture input from staff, such as suggestions and ideas

• Scheduling offers employee self-service capabilities to set preferences, bid on shifts, and swap shifts

https://yourlastdifferentiator.com

https://www.kronos.com/industry-solutions/retail

https://www.kronos.com/industry-solutions/retail

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Employee Engagement - Kronos