Australia’s Commsoscopy

Australia’sCommsoscopyAre we doing enough? An exploratoryexamination into the effectivenessof communicating the employment‘deal’ to Australians.April 2011 COMMSOSCOPY 1

About the survey ContentsThis is Impact’s second study of the internalcommunication landscape in Australia. This probingresearch was carried out by Australian Research Unitand commissioned by Impact Employee Communications, Under the microscope – Findings 4an Ogilvy PR Worldwide Company.The survey focused on senior leadership’s perceptions Heart to heart: Is the EVP in ICU or recovery? – Executive summary 5of internal communication, the Employee ValueProposition, and the social media and communication Open wide: This will make you better – Culture and values 7capabilities within Australian organisations. Phoneinterviews were conducted with 100 C-level executives We’re here to help: Taking the pain away – Communication support 8– excluding those solely with HR and/or communicationsresponsibility. It included executives from organisations On the improve: But help still needed – Communication skills 11with 100+ full time employees through to largeorganisations with 1000+ employees. 86% of Prognosis positive: Getting better but not fully fit – A strategic approach 14companies interviewed were Australian-owned. Going social: Some stay in the waiting room – Opportunities to explore 15Impact thanks all those who participated in this study. Conclusion 17 About Impact Employee Communications 18 References 192 COMMSOSCOPY WWW.IMPACT.COM.AU COMMSOSCOPY 3

Under the microscope Heart to heart: Executive summaryOur consultation exposed eight key insights. Is the EVP in ICU or recovery? In 2009 we investigated the business value of investing time and resources into communicating effectively 1 The employment ‘deal’ is being communicated but there are some big gaps in the way it is being done – the main attributes still need more continuous to employees. From that research [The Inside Story: How Australian Organisations are Managing Employee communication and reinforcement by leadership Communication During the Downturn – July 2009] we concluded organisations were getting smarter at utilising internal communication to enable achievement of business goals. In essence, the foundations were in place. 2 HR support for leaders to demonstrate and communicate the benefits EVP: What is it? The relationship is changing of the organisation doesn’t yet go far enough. More support for This time we’ve taken our investigation further, to A global trend in the last 18 months has focused on the communicating the ‘what’ and the ‘how’ is needed understand what is happening to the Employee Value relationship between employer and employee – what’s Proposition (EVP) – how well it’s being communicated, the employment deal, what can I expect as an employee how HR enables leaders to demonstrate it, what and what’s important to the company? We are moving 3 Communicating business strategy and performance needs more attention attributes attract employees to a company and what keeps them there. further away from economically rough times and the terrain has changed; both employees and employers are looking for different relationships, different ways of Closely related to the concept of employer branding, working and different results. The employment deal is EVP is used by HR & Talent Management to attract, changing so we question what this means for leaders, 4 Not enough is being done to upskill middle and front-line engage and retain quality employees. HR and communicators. Managers in being effective communicators Watson Wyatt1 states, “Companies that are highly Employee Value Proposition effective communicators have the courage to talk about Research suggests organisations using social The attributes and benefits of an organisation that what employees want to hear, and they redefine the 5 media internally are perceived by employees as create the employment deal. The tangible and employment deal”. Our research therefore looks at the having more effective communication of their intangible things that link what you can expect relationship between the employer, the employee, HR EVP than those that don’t and what’s expected of you as an employee. support, leadership skills and communication. It gives insights into the things that Australian companies are doing to demonstrate THE DEAL. It identifies where the 6 There is still some resistance to social media use externally by organisations There has been much research into employee perspectives of the EVP. Our study complements the discussion by investigating the perceptions of gaps are and opportunities for improvement. We know that for different people and organisations, the EVP means different things and for many it’s not common the EVP amongst the leadership community within language – only 35% of our survey respondents were Australian organisations. 7 familiar with the term. In this research we’ve identified a Organisations that use social media internally are backing their investment number of attributes and benefits that commonly determine an employee’s attraction and commitment to an organisation. Watson Wyatt summarise the EVP as, “including pay and benefit programs, professional 8 Communication disciplines are becoming development opportunities and work environment”. stronger but more needs to be done around aligning messages with vision, values and strategy4 COMMSOSCOPY WWW.IMPACT.COM.AU COMMSOSCOPY 5

Open wide:Trends incongruously they were ranked 7 and 8 out of 10 by leaders when the attributes are listed by importance (SeeOur 2009 survey concluded that robust planning, table 2 on page 7). This raises questions for organisationsprocess and leadership ownership of communication – is effort going in to demonstrating and communicatingwould be critical for employee engagement in the yearsahead. Given the increasing importance of reminding those attributes that really differentiate? Or have the areas This will make you better. of importance shifted, thus indicating the need to alter theemployees what they’re getting back, we take a look emphasis for communication and action? When asked which attributes and benefits were perceived to be most important to employees, there wasat EVP through the eyes of leaders in Australia. a high level of consistency from the leaders in our survey: organisation culture and values, strength of Finally, whilst internal social media use is still growingThe 2009 survey showed communicating vision and leadership and organisational stability ranking the highest as the most important attributes. in popularity in organisations, the research shows somedirection was the number one priority for 2009 and differences in the way companies who use social media2010. Given this and changes in the working view themselves compared to others. They consider Knowing this provides a useful guide to organisations Of the three most important attributes only organisationalenvironment in the last few years, we could assume themselves more effective in communicating and to prioritise actions. stability is considered one of the three top things thatcommunicating strategy and business performance demonstrating all the EVP attributes except organisations do communicate and demonstrate well. In support, the Executive Monitor2 report states(which contribute to organisational stability) will have organisational stability. We are beginning to see some This indicates a wide gap between the priority areas and “A company’s culture and reputation is important to 21%been a focus for businesses; yet table 1 below shows how well they are being communicated and demonstrated. differences in the cultures and communication of executives, and ranked higher than personal benefitsonly 50% of leaders consider they are doing this well. approaches for those companies that embrace social like bonuses, perks and salary.” It appears executives,This highlights the need to align and consistently media internally. like employees, also want to be associated with ancommunicate strategy, direction and performance organisation they can be proud of, rather than just focus “Culture eats strategy for breakfast” Overall the research results show there are some big gaps on the rewards they individually receive from a company.more effectively. appearing. Demonstrating and communicating the Peter Drucker, popularised in 2006 by the FordOrganisational reputation, training and development employment deal is critical for businesses over the next Watson Wyatt’s1 research shows only 58% of global Motor Company.are recognised as the attributes organisations are businesses consider they effectively educate employees few years and over 50% of those with responsibility for about organisational culture and values here in Australia.demonstrating and communicating well. However, communicating it are admitting that it isn’t being done well. Demonstrating and communicating culture and values certainly seems to be an issue with 47% leaderstable 1 considering that they do it well (see table 1 previous page). As it is perceived to be the most important attribute (see table 2), much more needs to be done to develop it, demonstrate it and communicate it. table 2 WHAT IMPACT We see organisations grappling with ways to communicate their business strategy SAYS and some progress is certainly being made with this. Fewer organisations seem to have a planned approach for communicating the employment deal, yet there are some organisations taking a holistic approach to all aspects of the deal and creating the employment story to improve relations between the organisation and the employee. Doing this has a tangible impact on retention and engagement.6 COMMSOSCOPY WWW.IMPACT.COM.AU COMMSOSCOPY 7

We’re here to help: But what about after the honeymoon period? Yet it’s apparent many of the mechanisms for communicating the EVP focus on one-way Three in four organisations (77%) use an employee communication channels i.e. – where the employee is intranet site to communicate aspects of EVP. Most being given information. There is little evidence toTaking the pain away. organisations use a mix of HR tools to communicate elements of the employment deal to their employees. suggest leaders are being supported to demonstrate the various attributes and benefits or to talk about the EVP orLess than 50% of leaders believe they’re communicating the main aspects of the employment deal well. reinforce through regular communication. Whilst managerLooking at this more closely highlights where support is being provided and some gaps that need filling. table 3 communication toolkits are being used by 56% of organisations, only 2% view them as a valuable way that HR can support them to communicate the EVP.In general, leaders are positive about the support Most organisations seem to use a range of HR tools to Given we know effective communication is a conversationHR provides to management to demonstrate and communicate the EVP. Comments from leaders indicate and dialogue driver, Australian organisations are definitelycommunicate the organisations’ attributes and benefits. job adverts and induction are generally seen as important missing a trick.78% consider support as being good overall for all levels ways of getting across the employment deal. This focusof management. However it is notable that support on induction is relatively successful with 68% of leaders Other areas where our respondents think HR can addconcentrates more on executive than middle or front believing their organisation communicates EVP effectively value to senior leaders to get across the employmentline managers/supervisors. Therefore we have an to all new employees. deal is to communicate the EVP more broadly using aopportunity to improve support for managers to range of tools, being involved in face-to-face meetingscommunicate aspects of the EVP so that it reaches with employees and having clear and transparent policiesall levels of the organisation. • 80% believe the CEO/executive receive good or and processes that relate to the EVP.Organisations that utilise social media to engage excellent levels of HR supportemployees have a more positive response to the level • 69% believe middle management receive goodof HR support provided: 83% of them feel that front or excellent levels of HR support HR is definitely getting some of the fundamentals rightline supervisors receive good or excellent levels of • 68% believe front-line managers receive good in supporting leaders to demonstrate and communicateHR support. or excellent levels of HR support the employment deal. Much of the feedback refers to support provided to deliver specific aspects of the EVP This highlights that almost a third of managers/ e.g. communicating the essentials at induction or leaders don’t believe they are receiving enough creating a story for job adverts. Having these foundations support to enable them to communicate effectively in place is valued by leaders. Yet they are also asking HR to provide more support so they can communicate and demonstrate the priority attributes and benefits of the organisation on an ongoing basis. This isn’t getting the attention it needs. “ We are having to redefine what we mean by the Employee Value Proposition and how we communicate it. This means rethinking our ” leaders’ role in demonstrating and communicating it as well as defining how HR can best support it. Angela Robertson: HR Director McCain Foods Australia and New Zealand8 COMMSOSCOPY WWW.IMPACT.COM.AU COMMSOSCOPY 9

WHAT IMPACT SAYS HR and internal communication teams need On the improve: to work together to create a strategy that shows all employees what it means to be But help still needed. part of the organisation. Whilst separate activities are an important part of Our 2009 research showed leadership communication skills development as the second highest priority communicating with employees at specific for the year ahead. This year we’ve looked at what progress has been made, and how this impacts the moments, a more strategic and joined-up connection of the EVP to employees. approach needs to be taken to communicating the employment deal and supporting leaders and Taking the premise that communicating the The results from last year showed that CEO and executive managers to demonstrate it. employment deal is increasingly relevant for teams tended to be better communicators than middle organisational success, we have looked at the link and front-line supervisors. This trend continues. between communication skill levels, HR support and 65% of respondents rated their CEO and executive how effectively the EVP is being communicated across team’s communication as good or excellent. This was the management levels in the organisation. broken down into three areas of strategy, benefits and Other findings With less than 50% of the leaders thinking the different values to compare across the leadership levels. • CEOs and executives are searching for more organisational attributes are communicated well, it targeted advice about specific things that need indicates there are some big gaps – the question is doing and want to use feedback more to steer where are the gaps and what can be done to close them? their actions • Middle managers are after training and support to table 4 be better communicators • Front-line supervisors want training in various aspects of people management, toolkits and communication support10 COMMSOSCOPY WWW.IMPACT.COM.AU COMMSOSCOPY 11

Table 4 (page 11) highlights the communication ability This means that almost 40% of senior managers and Understanding what skills are needed is one step WHAT We observe resistance fromof leaders at each level is lowest when communicating 60% of middle and front-line supervisors might not be towards finding solutions to address the gap. Overall organisations were strongly aligned about the IMPACT organisations to introducingorganisation strategy. This shows a link to the 50% of supported in the way they would like to develop theirrespondents who think they communicate organisational communication skills. This provides a clear signal to importance of different skills. SAYS communication skills forstability well (see table 2 on page 7). HR to mark it as a top priority for 2011. Our respondents consistently stated that all nine skills middle and front-line managers;Further investigation puts the spotlight on non- Towers Watson states that, “While it’s critical that the 3 highlighted in the research are relevant and needed (see this is an unnecessary andmultinational organisations where our research found organisation focuses on building the right culture and table 5 on page 12). For organisations with over 1,000 damaging compromise. Given that equippingonly 21% rated their CEO and executive team’s programmes, it’s equally important not to underestimate employees aligning messages with the organisation’s managers to communicate well is a recurring issuecommunication as excellent. Also, organisations with the role of immediate managers in supporting engagement vision, values and beliefs is more important to them for organisations, and with managers being theover 1,000 employees are less likely than others to and wellbeing”. Managers need the skills to do this. compared to smaller organisations. Yet our findings linchpin for relationships and improving show these same organisations mark down their middle performance for employees, improving theirpositively rate the communication of middle management Given their critical role in engaging and retaining managers and front-line supervisors as communicators.and front-line supervisors as good or excellent when communication skills should be a priority. employees, more needs to be done to improve theircommunicating the strategy or benefits. The European Communication Monitor 2010 4 predicts communication skills. a 30% increase in the importance of personalIn our 2009 survey, 67% of respondents agreed Significantly, more organisations (59%) that use social communication coaching and communication skillsthere was a renewed focus on the importance of media agree their organisations allocate enough training as a discipline for organisations over the nextcommunicating an organisation’s values. It would seem resources to middle management and front-line couple of years. Within Australia, the private sectorthat leaders abilities to communicate these values is consider coaching and mentoring skills to be more supervisors and they consider their middle managementcreating a gap between what organisations want to do important than the public sector. communication performance as good or excellent.and how well equipped they are to do it. This is an interesting finding as it might indicate the Our previous survey stated that over 90 percent ofWhat is worrying about these results is the 20% plus gap communicators support the best practice premise employees who use social media in their organisationsin the perceived communication ability between CEO/ that communicating business direction is vital, that may have more mature expectations of their managers’executives and front-line supervisors (table 4 on page 11) communicating vision and direction was their top communications, tending to seek answers first using theand the variety of indicators that show communication priority and that this was critical to building long term channels available to them. They refer to their managersskills in organisations are falling short. employee commitment. This still holds true yet our later for clarification or further discussion.These results link to the support provided by HR to the leaders’ ability to communicate strategy is still poor. Overall, the research indicates even though there HR is being told by their leaders that they needdifferent leadership levels; 62% believe enough resources is an improvement in the support provided, there is still support to improve skills so they engage employeesare allocated to support CEO/ Exec communication skills a large gap between the level of support leaders are and communicate the business strategy.whereas only 42% believe enough resources are allocated getting and the level needed to improve communicationto training middle and front-line supervisors. skills of managers.table 5 “ Compromising on safety communication skills for front-line managers is not an option. As the central point of contact for employees on projects, project managers and supervisors must be able to get across important safety messages. ” Investing a day to improve their skills is a no brainer when we consider the potential downside. Robert Duvel: Manager Operational Services Construction Division Leighton Contractors Pty Limited12 COMMSOSCOPY WWW.IMPACT.COM.AU COMMSOSCOPY 13

Prognosis positive: Going Social:Getting better but not fully fit. Some stay in the waiting room.Many of the attributes of the employment deal aren’t being communicated well and HR is being asked to Twitter, Facebook, Yammer, geo-location social networks like foursquare, blogs, podcasts and online communitiesprovide more communication support, as well as skills training for leaders. Looking more closely at the are the norms for communication. Whilst there is much noise, hype and postulating about social media, our lasteffectiveness of employee communication, there is some good news. survey showed there were a number of barriers preventing organisations transporting themselves quickly into the Web 2.0 world. These included limited access to technology for many employees, the fear of not being able toIn 2009, we stated having robust communication In our experience organisations are putting in place the control the message, and internal technology platforms preventing the use of social networks.planning processes would be critical. Positive steps are foundations for communication to happen, they nowbeing taken by organisations to put plans in place with need to develop and implement a strategic, holistic Since then, the speed of take up for social media remains However previously foreseen barriers are changing.59% of respondents having a plan for their business. approach to communicating all aspects of the EVP. closer to that of a tortoise than a hare, with only 29% of Losing control of the message was seen as an issue,This figure is higher at 79% for those using social media. organisations surveyed using social media as part of their whereas now 61% disagree that they will lose control This needs to look at requirements to attract, engageSomewhat surprisingly, only 38% of organisations with employee communication. of the message if they use social media. and retain employees while taking into account the500-999 employees have a plan compared to 80% of different aspects of the employment deal at different There does, however, seem to have been some shift in Furthermore, 65% agree social media is a good tool fororganisations with 300-499 employees. stages of an employee’s involvement with the company. thinking; interestingly the public sector is more likely to employee communication if the risks are managed. AndAnother success factor organisations have been Further thought and attention also needs to be given to see social media as a worthwhile investment than the the myth about social media and Generation Y isdeveloping is the processes they use to communicate. the way the business strategy, vision and performance are private sector (58% compared to 45%) and organisations changing, with 68% disagreeing that social media is only73% believe they have the right methods to communicate communicated. One aspect of communicating the business with more than 300 employees see it as more worthwhile appropriate for engaging Generation Y.with employees in different locations and 66% have the strategy relates to the skills of leaders; it is seen as an than those with 100-299 employees.right methods in place to communicate with non-office Interestingly, public sector leaders believe there is more essential skill and one that needs improving.based staff. Barriers to using social media still exist with 46% value in using social media than their private sectorMeasurement is also being used, with 70% CEO/ believing it poses too many legal and other risks and counterparts, if the risks are managed – 75% versus 58%.executives being formally measured on how well they 49% believing it is too difficult to measure the return on They also see it as more worthwhile in investing in socialcommunicate with employees. At the same time, 62% investment of using social media. media than private sector – 58% versus 45%. The privatebelieve their organisation measures employee sector appears to have more resistance to social media:engagement. Matching this measurement to skills training WHAT Organisations of all sizes the barriers are leaders’ skills, risks, losing control of theand advice would address some of the skill gap as well as IMPACT are investing in employee message and it only being suitable for Generation Y.finding ways to engage employees through the EVP. SAYS communication with muchThe perennial challenge! effort going into the table 6 development of communication55% of leaders consider lack of time as a barrierto communicating with employees. This is where channels and processes. To really gain value fromplanning, support and the right tools can help. the investment of time and money, more focus now needs to be on the development of strategies for significant issues in the business. Without doubt more attention on the way the employment deal is communicated will elevate the value of employee communication.14 COMMSOSCOPY WWW.IMPACT.COM.AU COMMSOSCOPY 15

ConclusionWe are also beginning to gather evidence from those WHAT We think organisations Eorganisations using social media about its benefits and IMPACT should consider the needuses; they are more positive about the benefits and less SAYS for social media basedconcerned about the risks. And of those already using on what they want theirsocial media, 90% believe it’s worth investing in. Looking at the way the employment deal is employee communication to demonstrated, communicated and used in organisations achieve and how best to deliver it. There is no brings to our attention a range of issues organisations are • Only 14% of those who use it agree that social universal answer, and different elements of currently facing. social media should be considered as part of V P media poses too many legal issues and risks. This compares to 59% who don’t use it. your communication strategies – for instance Having an EVP that is clear, known and used to introducing a Facebook group to receive differentiate is one of the main ways that employees • Only 14% of those who use it agree feedback on an issue may be your first step. are attracted, engaged and retained by organisations. organisations lose control of their messages Therefore putting the organisations energy into those A TO Z when they use social media. This compares elements that build a strong EVP that is known and to 30% which don’t use it. enjoyed by employees provides market advantage. What we are seeing is HR supporting leaders in a variety E NHA “ of ways to communicate the employment deal. At certainMany organisations still seem to be sitting on the Social media is being used by points this support is proving useful, particularly to attractfence when it comes to social media, whereas thoseusing it appear to be converts and see improvements in thousands of organisations as a employees and induct them in to the organisation. Beyond this HR support seems to fall short of the levels needed. NCE Y Othe way they engage employees, communicate with way to not only engage and U R EMP L The biggest opportunity is in the development ofemployees and are able to provide HR support. connect with employees, but communication skills for leaders and managers andThe Watson Wyatt1 survey shows that 55% of Australia’s to tap into knowledge, uncover focusing communication efforts on those aspects of the OY E R B R Ahighly effective communicators have increased their use talents, identify ambassadors, EVP and the business strategy that engage employees ”of social media for employees. This matches the NDR E P U T Aresponses we had from organisations using social media build solidarity and bring and improve business performance. Consideration should also be given to some of the advantages socialwho considered their communication of the EVP to be cultural values to life. media users are demonstrating in the way they are T I O N W I T Hmore effective than those who don’t, and who viewed communicating the employment deal. Ignoring this gap Brian Giesen: Regional Director I M P A C T S Etheir leadership capability as communicators to be higher. between what is needed to demonstrate and Ogilvy 360° Digital InfluenceSocial media is here to stay, but it still may take some communicate the employee value proposition and what X P E R T I S Etime to convert a large number of organisations to see is currently happening will lead to further break points inthe value in investing in it. New McKinsey research5 the connection between employer and employee.indicates that a payday could be arriving for thosecompanies that use collaborative web 2.0 technologies “intensively, in that they gain greater market share andhigher margins. One of the things you find in companies is that once a culture isLessons can be learnt from the early adopters on how formed it takes nuclear weaponry to change it... which is one ofsocial media can be used effectively to communicate the primary reasons many organisations have turned from the ”business strategy and support the employment deal. short term engagement focus of internal branding initiatives to more long term focus of employer brand management. Jeff Bezos: Founder Amazon616 COMMSOSCOPY WWW.IMPACT.COM.AU COMMSOSCOPY 17

About ImpactEmployee CommunicationsNow in our sixteenth year, Impact Employee Communications is Australia and Asia Pacific’s leading employeecommunication consultancy—the most awarded, the most specialised, and, with over 600 client results underour belt, the most experienced.We offer end-to-end communication solutions to What makes us different?business challenges for some of Australia and Asia Put simply, Impact’s focus is narrow, but its experiencePacific’s largest organisations. This ranges from strategic is deep and specialised, and to complete the picture,communication planning and leadership engagement, to is a values-driven business. Its team includes formerthe creative and logistical delivery of tactics to a range heads of communication for major blue-chips and otherof audiences. communication, change and engagement specialists.Whether it’s major change, such as restructuring, Our collaborative approach is key to our success.downsizing or an IT overhaul, specific business critical Always ensuring true ownership of employeeinitiatives such as energy saving, trade union negotiation communication from leadership teams is what makesor safety, or HR specific initiatives such as EVP our work impactful, driving business results.development, career pathway engagement or rewardand recognition programs, Impact has been, and Contact:continues to be a first choice for Australian private and Tam Sandemanpublic sector organisations facing some of their toughest Impact Employee Communicationspeople challenges. Level 2, 72 Christie StreetIn addition to offering core strategic employee St Leonards NSW 2065communication counsel, Impact also has five specialist Australiapractice areas reflecting the big ticket issues of today. T +61 (0)2 8281 3222 impact.com.au ReferencesSpecialist areas:• Change Management Communication• Leadership, CEO and Vision & Values Communication UNDERSTANDING THE PERCEPTION, BEHAVIOUR & INTENTION OF EXECUTIVES IN AUSTRALIA• HR People & Culture Communication 1. Watson Wyatt Capitalizing on Effective Communication – 2009/ 2010 Communication ROI Study Report• Industrial Relations and Safety Communication 2. Executive Monitor 2010 – Understanding the perception and intention of executives in Australia• Sustainability and CSR Programs (OgilvyEarth) 3. Towers Watson Perspective Jan 2010 – Employee Wellbeing: Taking engagement and performance to the next levelThese areas are supported further by our specialistservice offering – internal communications research 4. European Communication Monitor 2010 – Status quo and challenges for Public relations in Europecapability, coaching, training, social media, creative 5. McKinsey Quarterly Dec 2010, The rise of the networked enterprise: Web 2.0 finds its paydaystudio and employee events. 6. (Mosely, RC 2007) ‘Customer experience, organisational culture and the employer brand’ Journal of Brand Management, Vol 15, October pp 123-12418 COMMSOSCOPY WWW.IMPACT.COM.AU COMMSOSCOPY 19

Impact Employee CommunicationsLevel 2, 72 Christie StreetSt Leonards NSW 2065AustraliaT: (61 2 ) 8281 3222impact.com.au

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Australia’s Commsoscopy

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