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Ultimate Software presentation
1.
Research Bulletin |
2014 BERSIN BY DELOITTE 180 GRAND AVENUE SUITE 320 OAKLAND, CA 94612 (510) 251-4400 INFO@BERSIN.COM WWW.BERSIN.COM September 23, 2014 The Latest in Enterprise Learning & Talent Management About the Author Katherine Jones, Ph.D. Vice President HCM Technology Research Bersin by Deloitte Deloitte Consulting LLP Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. Imagine if people could choose their employers as they choose a book or a sweater online. Would your current employees “buy” your company? Would they recommend that others choose you as an employer? Would their comments reflect your employer brand, or would they suggest that working for your organization isn’t quite the same as what is pictured on the “package”? With highly skilled talent in short supply, the idea of employees as consumers has become a reality. Some organizations are differentiating themselves as an “employer of choice” by becoming more employee- centric, treating their employees much the same the way they treat their customers. These organizations are using strategies similar to those used to attract and retain customers—personalization, technology that is in alignment with their people-focused efforts, and effective branding—to build employee loyalty and passion. This research bulletin describes how organizations such as Texas Roadhouse, Camden Property Trust, and Ultimate Software are using their employee-centric strategies to grow their businesses. This research bulletin describes: • The employee-centric strategies three organizations are using to improve engagement and reach their business goals • The implications for HR in creating an employee-centric culture, including policies, processes, and technology • Leading practices and recommendations for becoming an employee-centric organization Wooing the Workforce: Creating an Employee- Centric Organization
2.
Research Bulletin |
2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 2 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. Understanding Employee-Centricity Marcy started at her company three years ago, right after leaving college. She was excited about joining the company at first, but now Marcy leaves frustrated at the end of the day. Her boss and coworkers are nice enough, but things always seem to be harder than they need to be and no one seems to really like being there. She often spends her lunch scanning job boards, but she isn’t convinced that things would be any different at another company. Marcy’s experience is not uncommon. According to Gallup’s 2013 State of the American Workforce report, 70 percent of workers in the United States are either not engaged or actively disengaged at work. In addition to the costs of turnover, this lack of engagement leads to lost productivity totaling between $450 and $550 billion dollars per year.1 Of course, many organizations attempt to increase employee engagement through a variety of methods. But according to a Bersin by Deloitte study, even though 71 percent of organizations include an engagement metric on their scorecards, only 35 percent believe that their engagement efforts led to positive business outcomes.2 This may be in part because of a tendency to mistake perks and benefits for true engagement initiatives.3 Instead of focusing on these efforts, organizations that have been able to move the dial on employee engagement tend to be “employee-centric.” These companies place the employee experience at the heart of their business strategy and treat their employees as if they were customers of both the management and the processes of the organization. 1 Source: State of the American Workforce: Employee Engagement Insights for U.S. Business Leaders, Gallup, 2013, www.gallup.com/strategicconsulting/163007/state-american-workplace. aspx. Note: Studies suggest that turnover cost can range from 30 to 50 percent of an entry-level worker’s salary to upward of 400 percent of a senior-level position’s salary once retraining and lost productivity are taken into account. 2 For more information, Implementing Employee Engagement to Drive Business Results: How Hellmann Worldwide Logistics Used Engagement as a Powerful Tool to Foster High- Level Employee Performance, Bersin by Deloitte / David Mallon and Brenda Kowske, Ph.D., February 2014. Available to research members at www.bersin.com/library. 3 Source: “Don’t Pamper Employees—Engage Them,” Gallup Business Journal / Susan Sorenson, July 2, 2013, http://businessjournal.gallup.com/content/163316/don-pamper-employees- engage.aspx. Employee-centric organizations treat their employees as if they were customers of the management and processes of the company. KEY POINT
3.
Research Bulletin |
2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 3 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. This type of strategy is based on a model in which companies systematically invest in the employee experience to ensure that the leading talent is hired, retained, and empowered. This can result in exceptional customer service and, in turn, shareholder value. These companies then reinvest in the employee experience to continue the cycle (see Figure 1). In essence, an employee-centric model formalizes the common mantra of “Our people are our best asset.” Employee-centricity leads to “employee passion” (see Figure 2), which drives employees to devote their time and energy to work, proactively going above and beyond expectations to help their organization achieve its business goals.4 4 For more information, 2014 Predictions: Talent, Learning and Human Resources – The Year of the Employee, Bersin by Deloitte / Josh Bersin, February 2014. Available to research members at www.bersin.com/library. Source: Bersin by Deloitte, 2014. Figure 1: Employee-Centricity Leads to Value for Customers and Shareholders, Reinvestment in the Employee Experience Employee Value Customer Value Shareholder Value
4.
Research Bulletin |
2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 4 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. Employee passion occurs when employees feel that they are valued as individuals and can contribute to the success of the organization both now and in the future; that they have a flexible and inclusive work environment; and that they can trust their leadership.5 So how would Marcy’s story unfold differently if the company she works for focused on building employee passion? This research bulletin explores the strategies that employee-centric organizations use and the key role of the HR function. Characteristics of an Employee-Centric Organization In the “age of the customer,”6 organizations are looking to understand their customers’ needs and values and to collaborate with the customer to develop products and services. This involves “meeting customers 5 For more information, 2014 Predictions: Talent, Learning and Human Resources – The Year of the Employee, Bersin by Deloitte / Josh Bersin, February 2014. 6 Source: Smarter Process in the age of the customer: Reinventing business operations for top line growth, IBM Software / Brian Safron and Vijay Pandiarajan, April 2013, ftp://public. dhe.ibm.com/software/uk/pdf/Smarter_Process_in_the_age_of_the_customer_April_2013.pdf. Source: Bersin by Deloitte, 2014.5 Figure 2: More than Perks—Drivers of “Employee Passion” Great Work That Matters Flexible, Supportive Working Environment Inclusive Culture Superior Management Recognition & Rewards Autonomy & Control Career & Learning Opportunities Trust, Meaning & Purpose A Passionate, Highly Engaged Workplace Trust in Leadership Career and Personal Opportunity Ability to Contribute Flexible Work Environment
5.
Research Bulletin |
2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 5 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. where they are,” in the ways that they prefer to interact, and at the moment of need. Employee-centric organizations do the same when it comes to their human capital. They strive to understand what makes their employees successful and use that information to invest in the tools, technologies, and resources to support them. As the following Case in Point describing the Texas Roadhouse restaurant chain shows, employee-centricity is more than a collection of engagement initiatives and perks; it is an organizational philosophy that influences key business decisions. Case in Point: Texas Roadhouse—Serving Up Employee Engagement Texas Roadhouse, a full-service casual dining chain, exemplifies the concept of employee-centricity. Founded in 1993 by Kent Taylor, Texas Roadhouse has built its business strategy around the concept that if its 48,000 employees—or “Roadies”—are happy and love their jobs, then customers will have a great experience and return again. This employee-centric philosophy is more than just a collection of initiatives aimed at improving employee engagement. This central tenant underscores the company’s key business strategies, from its core values to its corporate structure. Developed in partnership with field management, the core values of Texas Roadhouse are “Passion, Partnership, Integrity and Fun: All with Purpose.” These core values reflect an understanding of the challenges of working in the restaurant industry, which has a high proportion of part-time workers and, typically, high turnover. The core value of “fun,” for example, is exemplified by the line dancing employees perform at the restaurant sites. This helps create positive energy in the restaurant, entertains the guests (customers), and creates a fun and interactive environment that allows “Roadies” to go beyond typical business interactions. Every store (business unit) has a “fun budget” that pays for internal contests and activities to make sure that employees are aligned with the core value of fun, that they love coming to work, and that local management has the ability to spend money as they choose.
6.
Case in Point:
Texas Roadhouse—Serving Up Employee Engagement (cont’d) Research Bulletin | 2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 6 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. Similarly, the term “partner” is built into job titles to reinforce the “partnership” value. For example, general managers of Texas Roadhouse restaurants are called managing partners. Managing partners are considered to be the key customers of the company’s support departments, which are housed at the company’s “Support Center.” The idea that the organization supports its employees, rather than dictating to them, can be seen in their “inverted pyramid” model of leadership (see Figure 3). The CEO is at the bottom of the pyramid, and his role is to ensure that everyone in the organization is leveraging resources to support employee needs, especially those of the managing partners. The philosophy behind the inverted pyramid is instilled at each restaurant so that the managing partners and their assistant managers are all individually responsible for supporting the employment experience of the cooks and servers at a given location, ensuring they are dedicated to fulfilling the mission of providing “Legendary Food, Legendary Service.” Source: Bersin by Deloitte and Texas Roadhouse, 2014. Figure 3: Texas Roadhouse’s “Inverted Pyramid” Leadership Structure Managing Partners Market Partners Regional Partners “Support Center” Leadership Founder / CEO
7.
Case in Point:
Texas Roadhouse—Serving Up Employee Engagement (cont’d) Research Bulletin | 2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 7 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. As noted in Figure 3, the company sees the managing partner role as critical to the company’s growth. Texas Roadhouse supports the local autonomy of each restaurant and allows considerable latitude on hiring decisions, marketing / promotions, and performance management. Because of this, Texas Roadhouse makes significant investments in ensuring the long-term success of the managing partners. Prior to opening up a restaurant, new managing partners spend a year preparing. They receive 17 weeks of on-the-job training designed to help them understand the Texas Roadhouse operating philosophy, processes, and policies. They spend the remaining eight months learning best practices and attending the openings of new restaurants. This hands-on experience helps them plan and customize their own opening by exposing them to multiple strategies for different markets. While Texas Roadhouse supports the individuality of each restaurant, it uses technology as a “culture catalyst” to sustain company values across its 400+ locations. For example, Texas Roadhouse uses its UltiPro HR employee portal to share pictures of activities at each restaurant and communications that support the culture. The site is available online to the company’s large, geographically dispersed workforce so employees can access the portal from work or home and share photos and planned activities with their families. Similarly, the company’s integrated HR and compensation solution (UltiPro) was specifically tailored to the needs of the contingent, part-time employees that characterize the local restaurant workforce. Dashboard reporting to the managing partners helps them manage their respective businesses and provides a range of tools to reduce day-to-day administrative burdens. Many of these tools are launched through mobile applications, both to create convenience and to reinforce a contemporary employer brand. Investment in these kinds of technologies frees up the managing partners to focus on developing their people and building the Texas Roadhouse culture. The balance of corporate support and local autonomy, complemented by a compensation system that mixes the stability
8.
Case in Point:
Texas Roadhouse—Serving Up Employee Engagement (cont’d) Research Bulletin | 2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 8 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. of a base salary with the incentive of profit sharing, results in low turnover of the managing partner role and higher-than-average unit sales. The integration of Texas Roadhouses’ employee-centric philosophy into its structure and technology has helped it build and maintain a flexible culture designed to fulfill its mission of “Legendary Food, Legendary Service.” The effectiveness of this strategy is evidenced by the fact that the restaurant is one of the few food service companies on the GlassDoor “Top 50 Great Places to Work” list and Forbes’ list of “America’s 100 Most Trustworthy Companies.” Further, Texas Roadhouse has experienced year-over-year growth at a time when most other restaurant chains have frequently struggled.7 e Fostering the employee experience is particularly important in today’s talent marketplace, in which competition for skilled talent is increasing and the changing demographics of the workforce are creating new workplace dynamics.8 Further, innovations in consumer technology have set high expectations for how work gets done. As consumers, employees experience technology that is simple, available anywhere at any time, and personalized / contextualized—and they bring those same expectations to work (see Figure 4). Often, however, these same technologies don’t exist on the job. For example, a recent survey of service industries found that employees spend over 50 percent of their time managing the complexities of work rather than working with customers.9 Employees are easily frustrated by what they perceive to be overly complicated tools and processes, especially because they know that it doesn’t have to be that way. 7 Source: Texas Roadhouse Annual Report 2013, April 11, 2014, http://files. shareholder.com/downloads/TXRH/3230433677x0x743042/CB6225AE-9495-454F-A625- 798D371C83F7/2013_Annual_Report_and_2014_Proxy_Statement.pdf. 8 For more information, 2014 Predictions: Talent, Learning and Human Resources – The Year of the Employee, Bersin by Deloitte / Josh Bersin, February 2014. 9 Source: Smarter Process in the age of the customer: Reinventing business operations for top line growth, IBM Software / Brain Safron and Vijay Pandiarajan, April 2013, ftp://public. dhe.ibm.com/software/uk/pdf/Smarter_Process_in_the_age_of_the_customer_April_2013.pdf.
9.
Research Bulletin |
2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 9 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. Employee-centric organizations are willing to invest in not only the tools employees need to do their jobs, but in creating the kind of environment that helps employees love their jobs. Recently, Gallup found that only 22 percent of respondents who voluntarily quit mentioned pay and benefits as a factor; instead, most responded that features of the work environment— including manager quality, career development, and role fit—were key contributors in the decision to leave.10 As the Cases in Point in this research brief demonstrate, senior leaders in employee-centric companies are deeply committed to helping employees feel passionate about their work, and they are willing to design their organizational structures to support that vision. Further, they are willing to continually make investments in the employee experience to move beyond traditional satisfaction and engagement (see Figure 5). While these efforts take time, organizations that maintain a highly skilled, highly engaged workforce have been shown to have higher revenue, innovation, and customer satisfaction than those that don’t.11 10 Source: “Turning Around Employee Turnover,”Gallup Business Journal / Jennifer Robison, May 8, 2008, http://businessjournal.gallup.com/content/106912/turning-around-your-turnover- problem.aspx. 11 Source: State of the American Workforce: Employee Engagement Insights for U.S. Business Leaders, Gallup, 2013, www.gallup.com/strategicconsulting/163007/state-american-workplace. aspx. Source: Bersin by Deloitte, 2014. Customer Expectations “Employee as Customer” Expectations Mobile • I can compare and shop for products and services wherever I am and with whatever device I am using. • I can be productive in my role wherever I am and with whatever device I am using. Personal / Contextual • Products and services are offered to me based on an understanding of my history and preferences. • The company cares about me as an individual. • I have the information and tools I need, and they are specific to my role and experience. • My company cares about me as an individual. Social • The opinions and experiences of friends and others like me inform my preferences. • The knowledge and experience of my coworkers and experts inform my business decisions. Accessible • I can find the information I need when I need it. • I can access my own information and act on it. • I can find the information I need when I need it. • I can access my own information and act on it. Figure 4: The Effect of Today’s Technologies on Customer and Employee Expectations
10.
Research Bulletin |
2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 10 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. The Implications for HR in Creating an Employee- Centric Culture As the “people” arm of an organization’s business strategy, HR’s role in an employee-centric organization goes beyond managing traditional people processes. It requires rethinking key processes from the perspective of the employee experience and then adapting the organization to those needs. This may call for new skills and technologies, or even, as the Texas Roadhouse Case in Point shows, a significant restructuring of the HR role itself. HR is not historically known for speed or transformational change, so HR organizations that are committed to developing an employee-centric organization need to develop agility. HR departments need the data analysis skills to both understand their current employee base and the workforce they are developing. HR should also partner with areas such as finance, strategic planning, and IT to identify ways to integrate changes into the fiber of the organization through compensation, Source: Bersin by Deloitte, 2014. Figure 5: Evolution of an Employee-Centric Organization Employee Satisfaction Company Actions: Perks and benefits Employee Philosophy: “Happy employees provide better customer service.” Employee Goals: Contentment Measures: Formal or informal measures of morale Employee Engagement Company Actions: Discrete engagement initiatives Employee Philosophy: “People are our greatest asset.” Employee Goals: Discretionary effort Measures: Formal tracking of company engagement levels Employee-Centricity Company Actions: Integration of systems and structures Employee Philosophy: “Our people are customers of our management.” Employee Goals: Passion and loyalty Measures: Business results
11.
Research Bulletin |
2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 11 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. organizational structure, and technology.12 For example, as described in the Case in Point below, Camden Property Trust supports its employee-centric strategy by providing a more generous benefits package than its competitors so employees feel they are taken care of. The benefits package is selected through the company’s UltiPro solution so that employees, many of whom do not have dedicated computers, can quickly and easily find and enroll in the benefits that are right for their families. Importantly, HR leaders should foster conversations with senior leadership about the organization’s people strategy to identify a vision leaders will be willing to stand behind. What differentiates an employee-centric company is the employee perception that the company’s leadership cares about them as individuals and strives to create a work environment that talented people will feel excited to be part of. Creating an employee-centric organization involves developing a culture that promotes the individual strengths of employees in a way that supports the company’s goals. Case in Point: Camden Property Trust—Welcoming Employees Home Camden Property Trust, one of the largest publicly traded companies of its kind in the United States, is engaged in the ownership, development, acquisition, management, and disposition of multifamily residential apartment communities. Camden’s workforce totals nearly 1,800 employees, and the company is headquartered in Houston, Texas. As of July 31, 2014, Camden owned interests in and operated 169 properties containing 59,641 apartment homes across the United States. An S&P 400 company that is traded on the New York Stock Exchange, Camden has received numerous awards for workplace excellence. The company was recently named as one of the “100 Best Companies to Work For” in America by FORTUNE magazine for the seventh consecutive year (placing 11th on the list). 12 For more information, The High-Impact HR Organization: Top 10 Best Practices on the Road to Excellence, Bersin and Associates / Stacey Harris, January 2011. Available to research members at www.bersin.com/library.
12.
Case in Point:
Camden Property Trust—Welcoming Employees Home (cont’d) Research Bulletin | 2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 12 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. When Ric Campo and Keith Oden founded what would become Camden Property Trust in 1982, they wanted to create a company where people would enjoy coming to work. They recognized that employees spend a significant amount of time at work and wanted to make sure that the company was a place that people wanted to come to each day. Campo and Oden believe that if their employees enjoy their work, it will be evident to the residents and potential residents of their apartment communities, thus driving customer loyalty and growth, as well as shareholder value. Both at the corporate offices and at the company’s property locations across the United States, Camden employees are encouraged to bring their unique talents to work, whether they are work-related or not. This allows employees to show their skills to their peers and creates an environment of both fun and mutual respect. Where some organizations fear that too much fun will undermine productivity, Camden includes “Have Fun” as one of its core values, and considers fun to be one of the defining characteristics of its employer brand. Camden balances its fun environment by putting a premium on other values, such as “Always Do the Right Thing” and “Act with Integrity,” so that employees are focused on business results (see Figure 6). Further, Camden doesn’t equate having fun with expensive perks or elaborate events; it encourages employees to take accountability for creating a good work environment for each other every day through small acts toward each other or within their communities. On a larger scale, the annual Achieving Camden Excellence (ACE) awards allow employees to recognize their peers for living the company values. Further, Camden culture is continually assessed through both the “Great Places to Work” application process, which provides external feedback on various dimensions of cultural health, and through its own internal survey processes.
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Case in Point:
Camden Property Trust—Welcoming Employees Home (cont’d) Research Bulletin | 2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 13 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. At Camden, supporting an employee-centric culture begins during the recruitment process. Potential employees meet multiple members of the team and see the culture they would be joining firsthand. This is important for the assessment of fit for both the hiring manager and the candidate. Once employees are hired, they are sent an email welcoming them to the company that includes a link to the traditional new-hire paperwork, which can then be completed before an individual starts work. This allows new employees to spend their first day focused on socialization into Camden’s culture. At Camden, new employees are celebrated. Depending on the region, a Camden employee may be greeted by a “Welcome Wagon” or a personalized basket of treats and Camden “swag.” New employees take online training developed to help share the Camden culture through videos that highlight the stories of other employees. This online onboarding provides a standardized introduction to the culture, which is then personalized through one-on-one work with a mentor during the first 30 days of employment. This multifaceted approach Source: Camden Property Trust, 2014. Figure 6: Camden Property Trust’s Company Values Balance Employee Needs with Business Results
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Case in Point:
Camden Property Trust—Welcoming Employees Home (cont’d) Research Bulletin | 2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 14 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. helps new employees feel they are valued and important, and allows them to see that the culture they observed during their interview is an ongoing aspect of working at Camden. The goal of the Camden culture is to create a work environment in which its employees understand that the company cares about them and their families. In addition to the impact on customer service, this type of culture helps build trust and loyalty to the company. Camden feels that its employees are open to changes in processes and strategy because the company treats them with candor and respect. For example, during the recent recession, the CEO‘s transparency about upcoming strategy changes was perceived as a catalyst for higher employee satisfaction because the organization was encouraged to pull together as a team. The impact of the company’s employee-centric strategies can also be seen in its employee retention numbers. In an industry characterized by young, early career employees, Camden’s 21 percent employee turnover in frontline roles is considered low compared to the industry average of 31 percent.13 Camden is committed to further reducing its employee turnover by using tools such as the UltiPro Retention Predictor, which helps managers take proactive actions when top talent may be at risk of leaving. By personalizing the work environment and encouraging employees to create and maintain a fun workplace, Camden has won a place on the “Great Places to Work” list for seven consecutive years. It has also generated almost 6 percent revenue growth from 2010 to 2013 (one of the highest in the industry) and provided shareholder value that outpaced companies in the S&P 500 (see Figure 7).14 e 13 Source: “Turnover Rates Are Inching Up - Good News for Job Seekers,” apartmentcareers. com, October 8, 2012, http://blog.apartmentcareers.com/apartment-jobs-and-careers-blog/ bid/55869/Turnover-Rates-are-Inching-Up-Good-News-for-Job-Seekers. 14 Source: Camden Property Trust 2013 Annual Report, Camden Property Trust, 2013, http:// www.snl.com/Cache/1001185310.PDF?Y=&O=PDF&D=&FID=1001185310&T=&IID=103094.
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2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 15 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. Aligned Employee-Centric HR Systems While developing an employee-centric organization requires a deep commitment from senior leadership, HR departments can also take steps to evaluate their own processes and structure. One starting point is evaluating the tools and resources that HR provides to employees. HR systems—including recruiting, onboarding, performance management, benefits, and compensation—are typically resources that all employees use, which makes them a fruitful starting point. The goal of employee-centric HR technology and processes should be three-fold: • To reinforce the values of the organization through alignment and integration • To provide access to information that allows managers and employees to make strategic decisions • To make tactical HR decisions easy and intuitive in order to free up employee time and capacity A key to achieving an employee-centric HR technology strategy is shifting the focus from the HR analyst role as the primary user of HR technology to viewing employees and managers as the primary customers. The Case in Point below highlights how Ultimate Software has shifted the focus of its HR technology in this manner to effectively foster an employee-centric culture in a dispersed work environment through better connection and collaboration. Source: Camden Property Trust, 2014. Figure 7: Camden Annualized Total Returns Outpaced the S&P 500 between 1997 and 2013 11.80% 11.81% 6.04% S&P 500 FORTUNE's 100 Best Companies to Work For Camden Property Trust 0% 4% 8% 12% 16%
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2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 16 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. Case in Point: Ultimate Software—Instilling an Employee- Centric Culture in a Dispersed Workforce Ultimate Software, a Florida-based cloud provider of human capital management (HCM) solutions, expresses its employee-centric philosophy through its core value of “People First.” However, with a dispersed workforce of over 2,000 employees and rapid growth, maintaining a “people first” culture can be challenging. Ultimate fosters a collaborative, family-like culture beginning with the recruiting process and then continually throughout the employee life cycle. As the first step in employee engagement, Ultimate uses its own UltiPro recruiting solution, which is designed around the applicant experience, and focuses on helping candidates find the jobs that best fit their specific potential. This helps the company better assess talent and fit, as well as to personalize the experience for applicants (see Figure 8). For new employees, the onboarding process includes multiple touch points that immediately help make them feel connected and productive. For example, new employees are welcomed by a note from their hiring managers reinforcing why they were hired. Current employees are also encouraged to use the internal social networking site to reach out to new hires, welcoming them to the team. Even before the first day on the job, new employees have the option of using their LinkedIn accounts to help identify people from their networks who work at the company, and they can also sign up to get a mentor.
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2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 17 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. Source: Ultimate Software, 2014. Figure 8: The Ultimate Software “Welcome Aboard” Portal for New Employees
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Case in Point:
Ultimate Software—Instilling an Employee-Centric Culture (cont’d) Research Bulletin | 2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 18 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. Ultimate also recognizes that the employee’s family is critical to the successful integration of new hires into the culture. Benefits packages are generous and inclusive (e.g., all employees get an equity stake in the company) so that all employees and their families feel that the company cares about their well-being and the things that are important to them. The sense that the company cares about them and their families helps build employee loyalty, which is particularly important in hiring and maintaining top engineering talent. However, top talent is not the only focus. Founder and CEO Scott Scherr believes that all employees are important to company success, frequently saying, “The true measure of a company is how it treats its lowest-paid employee.” By using its own UltiPro solution to support its “People First” culture, Ultimate encourages person-centric design when developing its solutions. Employees can provide better customer service because they intrinsically understand not only what the product does but also why it is important. While Ultimate benefits from having its own technology available to connect employees, the culture of engagement is primarily viewed as the direct result of a senior leadership team that is passionately committed to the employees as part of a “virtuous cycle”—one that encourages employees to provide exceptional customer service, which then translates to shareholder returns that can be reinvested in the employees. This “virtuous cycle” has resulted in the company being ranked among FORTUNE’s “100 Best Places to Work” every year since 2012, as well as being listed in Forbes’s “Top 10 Most Innovative Growth Companies” in 2014, with an 18.4 percent average sales growth rate from 2008 to 201315 and year-over-year revenue growth since 2002 (see Figure 9).16 e 15 Source: “Most Innovative Growth Companies,” Forbes.com, June 2014, www.forbes.com/ growth-companies/list/. 16 Source: “Ultimate Software Financial Highlights,” Ultimate Software, 2014, www.ultimatesoftware.com/Investor-Relations-Annual-Report-Financial-Highlights.
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2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 19 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. Getting Started: Lessons from Employee- Centric Companies As the three Cases in Point in this bulletin highlight, having a leadership team that will passionately champion an employee-centric culture is critical to creating and maintaining such an organization. Texas Roadhouse, Camden Property Trust, and Ultimate Software were all founded by leaders who built an intense employee focus into the fabric of their companies. However, for many other organizations, the challenge will be to develop a leadership culture that supports moving from employee engagement initiatives to an integrated employee-centric strategy. HR can facilitate this transition by conducting internal market research on employees focusing on: • Identifying employee needs, motivations, and preferences. This should be based on key factors such as age, job function, and time with the company. What are the key “de-motivators” for your employees? Is your work environment fun? Source: Ultimate Software, 2013. Figure 9: Employee-Centric Strategies Drive Year-over-Year Growth at Ultimate Software $55.1 $60.4 $72.0 $88.6 $114.5 $150.1 $178.0 $196.3 $227.8 $269.2 $332.3 $410.4 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 Total Revenue (in Millions)
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2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 20 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. • The strength of your employer brand. Resources like GlassDoor and exit interviews can provide insight into how your actual employment brand compares to what you want it to be. • Quantifying the cost of turnover. Make employee retention rates and reasons for leaving a standard factor in workforce analyses. • Calculating the cost of the complexities of work. Identify opportunities in which investment in integrated systems and tools could streamline effort and increase productivity. • Identifying internal structures that restrict or block the flow of information. How do structural and political factors, compensation, and technology support or undermine an employee-centric culture? By developing insights into the nature of the work environment at an organization, HR leaders are in a unique position to foster conversations and drive the changes needed to develop a more employee-centric organization. Conclusion Let’s return once more to the story of our fictional employee, Marcy. If Marcy worked for an employee-centric company, she still might have days when she left frustrated. On most days, however, Marcy would feel that she was valued as an individual and that the company cared about her success. Marcy’s pride in her company would delight her customers, and she would recommend the company to her friends as not only a fun place to work, but as a place where she finds encouragement and is respected as an individual. Employee-centric organizations are different from other companies in their approaches to employee engagement. Using the same strategies that build customer loyalty and satisfaction (e.g., personalization, self-service, and a strong employer brand), these companies use their technologies and business processes to build employee passion, which translates into higher retention rates, higher growth, and increased shareholder value.
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2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 21 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. • Employee-centric organizations strive to build employee passion in order to reduce turnover and increase the quality of customer service. • These organizations integrate fun into the company culture; activities are generally designed at the local level. • Building an employee-centric organization takes time, concerted effort, active leadership support, and supportive technology. • HR can foster the integration of employee-centric values into the employee life cycle. • HR technology can support employee-centric efforts by streamlining tasks, personalizing the experience for employees, communicating the employer brand, and fostering employee interaction and collaboration. KEY TAKEAWAYS
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2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 22 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. The Bersin WhatWorks® Membership Program This document is part of the Bersin Research Library. Our research is provided exclusively to organizational members of the Bersin Research Program. Member organizations have access to an extensive library of learning and talent management related research. In addition, members also receive a variety of products and services to enable talent-related transformation within their organizations, including: • Research—Access to an extensive selection of research reports, such as methodologies, process models and frameworks, and comprehensive industry studies and case studies. • Benchmarking—These services cover a wide spectrum of HR and L&D metrics, customized by industry and company size. • Tools—Comprehensive tools for HR and L&D professionals, including tools for benchmarking, vendor and system selection, program design, program implementation, change management, and measurement. • Analyst Support—Via telephone or email, our advisory services are supported by expert industry analysts who conduct our research. • Strategic Advisory Services—Expert support for custom-tailored projects. • Member Roundtables—A place where you can connect with other peers and industry leaders to discuss and learn about the latest industry trends and leading practices. • IMPACT Conference: The Business of Talent—Attendance at special sessions of our annual IMPACT conference. • Workshops—Bersin analysts and advisors conduct onsite workshops on a wide range of topics to educate, inform, and inspire HR and L&D professionals and leaders. For more information about our membership program, please visit us at www.bersin.com/membership.
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2014 Wooing the Workforce: Creating an Employee-Centric Organization Katherine Jones, Ph.D. | Page 23 Copyright © 2014 Deloitte Development LLC. All rights reserved. This material is licensed to Ultimate Software for distribution only. About Us Bersin by Deloitte delivers research-based people strategies designed to help leaders and their organizations in their efforts to deliver exceptional business performance. Our WhatWorks® membership gives FORTUNE 1000 and Global 2000 HR professionals the information and tools they need to design and implement leading practice solutions, benchmark against others, develop their staff, and select and implement systems. A piece of Bersin by Deloitte research is downloaded on average approximately every minute during the business day. More than 5,000 organizations worldwide use our research and consulting to guide their HR, talent, and learning strategies. As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication. Copyright © 2014 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited.
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