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Survey Findings




The Future of Engagement
How can you leverage your employee study
to drive business performance?




                      Aon Hewitt Future of Engagement Survey   i
Contents                                                                                          The Future of Engagement

                                                                                                  Introduction
The Future of Engagement 	                                                                   1
                                                                                                  This report provides an overview of Employee Engagement
                                                                                        ____      practices in 150 companies across Europe. Our research
The Research Findings 	                                                                      4    shows that while many organisations are taking a similar
             _________________________________________                                            approach to gathering employee feedback only a few
                                                                                                  stand out in terms of their ability to increase Employee
What is Different at Leading Organisations? 	                                              10
                                                                                                  Engagement in challenging times. The report outlines
             _________________________________________                                            common practices and the practices of these exceptional
Becoming a Leading Organisation 	                                                          18     few.
             _________________________________________                                            More Than Ever, Employee Engagement Matters
The Future of Engagement Starts Here 	                                                     20
                                                                                                  We live in complex times. New paradigms of working
                                                                                                                                                              Aon Hewitts’ research over the
             _________________________________________                                            are emerging and organisations are seeking to
                                                                                                                                                              past 10 years shows that
                                                                                                  understand and act on these. Changing regulatory
                                                                                                                                                              Employee Engagement
                                                                                                  environments, organisational restructuring, challenges
                                                                                                                                                              – the emotional and intellectu-
                                                                                                  of diversity and inclusion, the demand for corporate
                                                                                                                                                              al involvement that motivates
                                                                                                  social responsibility and the ability to manage a
                                                                                                                                                              employees to contribute to
                                                                                                  cross-generational workforce, are all part of the fabric
                                                                                                                                                              organisational success –
                                                                                                  of today’s working world. At the same time,
                                                                                                                                                              is a critical component of
                                                                                                  organisations report that talent shortages and the
                                                                                                                                                              organisational performance.
                                                                                                  aging workforce are creating additional pressure on
                                                                                                  their ability to find and retain the best talent. More      A highly engaged workforce is
                                                                                                  than ever, Employee Engagement matters. While in            up to 78 percent more produc-
                                                                                                  past times organisations may have debated the               tive and 40 percent more
                                                                                                  importance of Employee Engagement, today the                profitable than a disengaged
                                                                                                  power of an engaged workforce is well understood            workforce.
                                                                                                  and a sought after asset.


Acknowledgements                                                                                  However, while organisations acknowledge the power of engagement, many struggle to
                                                                                                  make progress in this area. Aon Hewitt’s latest research shows that employee loyalty and
This research is the result of the efforts of a significant number of our associates across the   engagement is waning. At a time when organisations are looking to employees to help them
world led by Jennifer Pangas, Ted Marusarz, Jenny Merry and Rita Veres. Thank you to              reduce costs, identify areas for growth, streamline processes and innovate faster than their
Giorgio Boraso, Didier Burgaud, Michael Hermann, Martina Huitfeld, Pramita Joardar, Divyaj        competitors, employees in many organisations are showing fatigue in response to the lengthy
Kamboj, Rosie Moreau, Catherine Mudford, Wolfgang Nemetz, Sophie Oberkampf, Magnus                period of stress, uncertainty and confusion of the economic downturn.
Persson, Elisabeth Preihs, Iqbal Razi, Adam Rubicsek, Annick Ruedi, Nicole Schadewald, Conny
Schättle, Christophe Swaenepoel, Noemi Szijjarto and Celia Tripp.




                                                                                                                                                       Aon Hewitt Future of Engagement Survey    1
Aon Hewitt has analysed Employee Engagement levels across more than 900 organisations                      So What Is Different At These Organisations?
    around the world that conducted a repeat engagement study in each of the last eight
                                                                                                               There is a significant gap between common practice and best practice. In many organisations
    quarters since July 2008. Historically, about half of those organisations improve their
                                                                                                               the collection of Employee Engagement data is managed as an administrative process,
    engagement levels in a one- or two-year period, while 15 percent experience a decline.
                                                                                                               investments are focused on data collection, reporting and communication. Organisations are
    However, the past two years have been more challenging: the percentage of organisations
                                                                                                               adept at collecting the data; they set clear accountabilities and effectively communicate
    with declining engagement has been steadily increasing. This trend was particularly notable
                                                                                                               expectations to senior leaders, managers and employees in that process. Then, when it
    in 2010. Aon Hewitt’s research shows that 46 percent of organisations experienced a decline
                                                                                                               comes to taking action, these accountabilities get dispersed and governance models are
    in engagement levels in the quarter ending June 2010, while just 30 percent saw an
                                                                                                               unclear.
    improvement.

                                                                                                               At organisations with increasing Employee Engagement,
                                                                                                                                                                            In many organisations,
                                                                                                               leaders have a clear purpose for gathering employee
    Figure 1: Percentage of Organisations with Increasing and Decreasing Engagement Levels                                                                                  employee survey outcomes
                                                                                                               opinions – Employee Engagement data is part of a set
                                                                                                                                                                            stop at the stage of generating
                                                                                                               of critical integrated metrics that leaders use to make
             50%                                                                                                                                                            a set of interesting facts.
                                                                                                               resourcing, workflow, cost reduction and investment
     50
    50%                       47%
                                                      46%                                                      decisions. Within these organisations leaders and their      The link between the results
                                                                                                                                                                            and the day-to-day decisions
                                                                      42%                                      teams have clear accountability for exploring results
                                                                                      40%                                                                                   required to improve is missing.
                                                                                                               and deciding on priority actions. The strategy, structure
     40
                                     43%
    40%               42%
                                                                                                       37%
                                                               35%             34%
                                                                                                               and systems support leaders in understanding and
                                               37%                                                             improving Employee Engagement and driving
                                                                                              29%
                                                                                                               performance.
     30
    30%
                                      31%     31%
                                                      30%     31%
                                                                               30%
                                                                                      32%
                              29%
                                                                                                         25%   Savvy HR practitioners implement methodologies and technology platforms that enable
                       25%                                            25%                     26%              leaders to:
     20
    20%
                                                                                                               n Understand how their own behaviour impacts Employee Engagement;

             15%                                                                                               n Segment employee data in order to gain better insight into the needs of critical talent
     10 Historical
    10%                                                                                                          segments;
                     Jul-Dec Jan-Jun Jul-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec
           Trend        08     09       09      10     10      10      10       11     11      11      11      n Access best practice suggestions and advice on demand; and

                          Decrease (<=-4%)                  Increase (>=+4%)                                   n Link Employee Engagement data with other people and business metrics to demonstrate
                                                                                                                 the impact.

    Succeeding In Uncertainty
    Despite the challenges faced by organisations today, some are able to drive improvements in
    Employee Engagement and sustain high levels of loyalty.
    As a result these organisations are better able to:
    n Attract the best employees;
    n Keep the talented employees they already have;
    n Motivate their employees to give their best;
    n Monitor levels of employee well-being; and
    n Outperform the market and their competitors financially.




2   Aon Hewitt Future of Engagement Survey                                                                                                                           Aon Hewitt Future of Engagement Survey   3
The Research Findings                                                                                     Who Is Collecting Employee Opinion Data?
                                                                                                              In an economic climate where organisations having been looking to cut or reduce
                                                                                                              expenditure that is deemed non-essential, the good news is that most organisations are
                                                                                                              continuing to collect employee feedback and conduct employee research. 93 percent of
    Study Overview
                                                                                                              participating organisations conduct employee surveys; 85 percent have conducted a study
    In May 2010 Aon Hewitt conducted a European-wide study into organisational Employee                       within the past 2 years.
    Engagement practices – The Future of Engagement. The findings from this research reveal
    current Employee Engagement practices and highlight the practices of those organisations                  Figure 4: When did you conduct your latest employee survey?
    that, over the past two years, have experienced a significant positive increase in their
    Employee Engagement, despite the challenging economic environment.                                                         More than 3 years ago: 7%

                                                                                                                            2 to 3 years ago: 8%                              Within the past 3 months: 21%
    Survey Participants
    Aon Hewitt surveyed organisations across Europe to understand what is making the
    difference in their engagement improvement programmes. There were 150 participants in
    the study. These organisations were a mix of small (<250 employees) and large organisations
    (>30,000 employees) and global, regional and local organisations. Participating organisations
    represent a broad range of industry sectors.                                                                    1 to 2 years ago: 21%

    Figure 2: Respondent Profile by Number of Employees                                                                                                                                3 to 6 months ago: 16%

                           More than 30,000: 13%
                                                                            Below 250: 23%



                      10,001 to 30,000: 13%                                                                                6 months to 1 year ago: 27%
                                                                                                                                                                    Source: Future of Engagement Study, May 2010




                                                                                  250 to 500: 11%
                       5,001 to 10,000: 10%
                                                                                                              What Type Of Employee Feedback Is Being Gathered?
                                                                                                              In the study we asked organisations what other employee feedback they gather in addition to
                                                                                                              their employee opinion surveys. We found that in addition to employee opinion surveys, the
                                                                          501 to 1,000: 9%                    predominant form of employee data collected was from exit interviews. 73 percent of
                                   1,001 to 5,000: 21%                                                        companies collect information from employees leaving the organisation. 34 percent of
    Figure 3:                                                                                                 organisations gather employee feedback as part of their on-boarding process and 12 percent
                                                                                                              of organisations gather feedback from candidates who have declined job offers with their
    Respondent Profile Structure
                                                                                                              organisation. The results show that there is a much greater focus on collecting employee
                                    Local: 28%
                                                                                                              feedback at the end of the employee life cycle rather than the beginning. For many
                                                                                                              organisations it would appear that the message is “while you’re here we’re happy just to have
                                                                                                              you do your job but once you decide to leave then we want to know why”.
                                                                                  Global: 49%




                                     Regional: 23%

                                                               Source: Future of Engagement Study, May 2010




4   Aon Hewitt Future of Engagement Survey                                                                                                                         Aon Hewitt Future of Engagement Survey          5
Type of Employee Feedback Channels                                                             Is Employee Feedback Being Integrated With Other Data?
                                                                                                   We also asked organisations if they were integrating their employee opinion data with other
    Employee Life Cycle     Survey Objective                                                       people measures, such as performance ratings, potential ratings, productivity ratios or
                                                                                                   compensation data. A surprisingly high number of organisations, 87 percent, reported that
    Market Survey           Measures the attractiveness of the organisation as an employer,        their people data is well integrated or partially integrated across the organisation. However,
    (Pre-Employment)        perceptions of the external customer and employee brand.               this integrated data is predominantly used to identify historic trends rather than to focus on
                            Measures the candidate experience, reasons for rejection and           future scenarios. 73 percent of organisations say that this information is used to identify
    Candidate Rejection
                            willingness to apply for other positions within the organisation.      trends in the employee situation over time while only 24 percent say this information is used
                            Measures the candidate experience, reasons for acceptance and          to predict future employee issues.
    Candidate Acceptance
                            expectations for the role.
                            30 days: Measures the onboarding experience, degree of clarity         Figure 5: Integrated information is used to look back, not for predictive analyses
                            on performance goals and cultural integration.
                                                                                                                                            0%     10%     20%   30%     40%   50%    60%     70%    80%
                            90 days: Measures role fit, likelihood of disengagement or exit
    On-boarding,                                                                                   Information is used to track the
                            and the extent to which the new employee has been supported                                                                                           59%
    (30 days, 90 days                                                                              current employee situation
                            to perform.
    and 180 days)
                                                                                                   Information is used to identify trends
                            180 days: Measures role fit, likelihood of disengagement or exit                                                                                                73%
                                                                                                   in the employee situation over time
                            and the extent to which the new employee has been supported to
                                                                                                   Information is used to predict the
                            perform.                                                                                                                      24%
                                                                                                   future employee situation
                            Measures the extent to which people are engaged to deliver their
                                                                                                                                                                               Source: Future of Engagement Study, May 2010
    Engagement Survey       best work and what factors are influencing this level of
                            Engagement.
                            Measures employee perceptions of the behaviours in the                 HR business partners, rather than people managers, are still the primary users of people data.
                            organisation, how they match to their own values and if the            In 78 percent of organisations HR business partners access and use this data. In three out of
    Values Survey
                            organisation is living the desired values and behaviours it says it    every ten organisations line managers do not access or use this people data.
                            stands for.
                            Addresses a specific engagement issue, such as career
                            opportunities. This is important for employees at critical stages in   Figure 6: Line managers’ role in using employee data is not emphasized
    Engagement Pulse        the employee life cycle, key talent and employees performing in                                  0%       10%    20%         30%     40%     50%      60%       70%      80%
    or Targeted Survey      critical roles. One example of this is surveying employees after 2-3
                            years in the organisation who are most likely at a critical career     Executive board                                                                           76%
                            stage.
                            Measures role fit, likelihood of disengagement or exit and the         Line managers                                                                   65%
    Transition Survey       extent to which the employeee has been supported to perform in
                            their new role.                                                        HR business partners                                                                        78%
                            Measures reasons for leaving and the possibilty of
    Exit Survey
                            re-engagement. Can be focused on regretted losses.                     HR centres of expertise                   25%
                            Tests attractiveness of the organisation as an employer,                                                                                           Source: Future of Engagement Study, May 2010
                            the likelihood of re-joining the organisation or refering the
    Alumni Survey
                            organisation to colleagues. Can also measure perceptions of the
                            external customer and employee brand.




6   Aon Hewitt Future of Engagement Survey                                                                                                                             Aon Hewitt Future of Engagement Survey                 7
How Is The Employee Feedback Being Communicated?                                                                               Figure 8: Where have you focused your action plans in response to your employee feedback?
                                                                                                                                                                           0%      10%         20%         30%        40%        50%        60%
                                                        99 percent of participating organisations share their
      Organisations are not yet
                                                        results and use multiple channels for communication.                        Career management programmes
      adopting new technologies for                                                                                                                                                                        34%
                                                        Face-to-face forums, such as focus groups, workshops
      communication, with only
                                                        and team meetings are the most popular forms of                             Learning and development initiatives                                                             57%
      6 percent of organisations
                                                        communication.
      using electronic forums, such                                                                                                 Senior leadership development                              25%
      as blogs, chat rooms and
                                                                                                                                    Manager development                                                                        52%
      webinars.
                                                                                                                                    Communication programmes                                                                        57%

                                                                                                                                    Compensation and benefits                                    27%
     Figure 7: How do you communicate the results of your employee opinion survey to employees?
                                                                                                                                    Recognition programmes                                               32%
                                                  0%     10%    20%     30%    40%       50%   60%    70%   80%

     Paper-based communication, such as                           28%                                                               Performance management                                                   36%
     newsletters or internal newspaper                                             46%
                                                                                                                                    Employer branding initiatives                                    28%
                                                                              44%
     E-mail or intranet postings                                                                                                    Recruitment processes
                                                                                           59%                                                                                     13%
     Information events, such as large                                             48%                                              Corporate and social responsibility
                                                                                                                                    programmes
                                                                                                                                                                                          20%
     conferences or presentations                                                   50%
                                                                                                                                    Diversity initiatives                                19%
     Face-to-face forums, such as focus                                                    60%
     groups, team meetings or workshops                                                           70%                               Work/life balance initiatives                                              38%
     Two-way electronic forums, such as            7%
                                                                                                                                    Innovation programmes                                18%
     chat rooms, blogs or webinars                 6%
                                                                                                                                                                                                     Source: Future of Engagement Study, May 2010
            Companies with significantly positive increases in employee feedback          Other companies
                                                                                     Source: Future of Engagement Study, May 2010
                                                                                                                                    Action planning is still mainly initiated and defined by HR. In 50 percent of organisations HR
                                                                                                                                    is held accountable for initiating and defining action plans and in 46 percent of organisations
    Where Are Organisations Focusing Their Action Plans?                                                                            it is HR that is held accountable for following the action planning process.
    While 99 percent of organisations take action based on their employee feedback, this does
    not guarantee results. Hewitt research shows that most organisations focus on the following                                     Are Organisations Segmenting Their Data To Understand The Unique Needs Of
    areas: learning and development initiatives, communication programmes, manager                                                  Specific Employee Groups?
    development.                                                                                                                    Close to a quarter of organisations do not segment their employee data to understand the
                                                                                                                                    experiences of different employee segments and are unable to determine whether their critical
                                                                                                                                    talent segments are more or less engaged than other employee groups. Where organisations
                                                                                                                                    do undertake segmentation analysis the primary focus is on distinctions between different
                                                                                                                                    levels of management.


                                                                                                                                    What is the Perceived Value of The Employee Data Collected?
                                                                                                                                    Organisations still struggle with getting buy-in from executives on the value of engagement
                                                                                                                                    surveys. While 72 percent of participating organisations agree that overall their organisation
                                                                                                                                    acknowledges the value that the employee survey brings, only 54 percent of participating
                                                                                                                                    organisations agree that their executive boards see their employee survey process as being
                                                                                                                                    critical to organisational success. Those companies that are able to link employee survey
                                                                                                                                    outcomes with performance measures see increased commitment from senior leaders to act
                                                                                                                                    on the results.




8   Aon Hewitt Future of Engagement Survey                                                                                                                                                Aon Hewitt Future of Engagement Survey                    9
What is Different at Leading Organisations?                                                                                     Hold Leaders Accountable For Taking Action:
                                                                                                                                     There are more practices in place to build accountability amongst leaders and it is less likely
                                                                                                                                     that HR will be responsible for taking action.
                                                                                                                                     Leaders at organisations making significant improvements in Engagement take more
     Of those organisations responding to the study, a quarter have seen little or no change in
                                                                                                                                     ownership for taking action on the information. They are held accountable through the
     Employee Engagement levels over the last two years, while another quarter have seen
                                                                                                                                     performance management process for developing plans and taking action to address
     engagement levels decline. 36 percent have seen a slight increase in engagement levels and
                                                                                                                                     Employee Engagement.
     16 percent of participating organisations have seen a significant increase in engagement
     levels. We refer to these organisations that have experienced significant increases in Employee
     Engagement as ‘Leading Organisations.’                                                                                          Figure 10: What practices do you use to build accountability for responding to the employee
                                                                                                                                     feedback?
     When we analysed the differences between those leading organisations and the others, we
                                                                                                                                                                                0%      10%     20%      30%      40%     50%     60%     70%
     see a number of differences. Those organisations that are able to ‘move the needle’ on
     improving Employee Engagement are more likely to do the following things:
                                                                                                                                     Leaders are held accountable for                                                      56%
                                                                                                                                     achieving pre-defined targets                                                  49%
     Start With A Very Specific Objective For Their Survey:
     They go beyond measuring employee attitudes and benchmarking to address the impact of
                                                                                                                                     Leaders are held accountable for                                                            63%
     Employee Engagement on business and HR strategies.
                                                                                                                                     following the action planning process                                               54%
     Organisations that made significant improvements to employees’ perceptions went beyond
     wanting to simply measure employee attitudes, they were purposeful in using the survey to                                       HR is held accountable for achieving
     collect data for input into the strategic business plan or to assess the impact of HR                                           pre-defined targets                                      21%
     programmes and practices.
                                                                                                                                     HR is held accountable for following                                   38%
     Figure 9: Primary reasons for conducting an employee survey                                                                     the action planning process                                                   47%
                                                         0%          10%        20%         30%         40%        50%        60%
                                                                                                                                     HR collects informal feedback                              25%
                                                                        16%                                                          to measure progress                                                   38%
     Benchmark ourselves against competitors
                                                                  11%
                                                                                                                                     HR facilitates follow-up meetings                                              50%
     Benchmark ourselves against                                           21%
                                                                                                                                     to share progress and success stories                                           51%
     high-performing organisations                                      17%
                                                                                                                                           Companies with significantly positive increases in employee feedback         Other companies
     Measure current employee attitude                                                                     47%
     and morale                                                                                                       57%                                                                                          Source: Future of Engagement Study, May 2010


     Address specific employee issue                                       21%
     (i.e. turnover)                                                    17%
                                                                                                                                        How Do You Build Leadership Accountability?
     Collect data for input into HR/people                              16%
     programmes                                                           18%                                                           n Take the measure of Engagement seriously. Discuss it at management meetings,
                                                                                                                                          incorporate it into corporate scorecards and individual performance plans.
     Collect data for input into business                                      21%
                                                                                                                                        n Reinforce the link between high engagement and performance, again and again.
     strategic plan                                             10%
                                                                                                                                        n Ensure the data collected directs managers to what they can change. This might be
     Assess the impact of our HR/people                                 16%
                                                                                                                                          specific behaviours or actions around learning and development, career
     programmes                                                 9%
                                                                                                                                          management or recognition practices.
     Drive change in the organisation                                                           37%
                                                                                                                                        n Be clear that being a leader is about motivating people to achieve a set of common
     and improve performance                                                                             45%
                                                                                                                                          goals. Build this into leadership development programmes and value it as highly as
        Companies with significantly positive increases in employee feedback                                                              technical expertise.
        Other companies                                                               Source: Future of Engagement Study, May 2010




10    Aon Hewitt Future of Engagement Survey                                                                                                                                                             Aon Hewitt Future of Engagement Survey                   11
Focus Actions On The Areas That Matter Most To Engagement:                                                                  Aon Hewitt’s global employee research shows that during normal times certain drivers are
      Leading organisations focus on the fundamentals first, making sure that their managers                                      critical to Engagement. These include: Leadership, Career Opportunities, Performance
      spend time on the areas that really do impact Engagement, not just satisfaction.                                            Management, Reward and Recognition. Our research shows that in the current economic
                                                                                                                                  climate the drivers of Engagement have changed. Career Opportunities, People/HR Practices
      While 99 percent of organisations take action based on their employee feedback, this does                                   and Recognition are now the most critical for engaging employees.
      not guarantee results. Leading organisations are:
                                                                                                                                  However, organisations are struggling to make progress in those areas which have a strong
      n More focused on the areas that matter to employees, such as: career opportunities,                                        impact on engagement. Leading organisations do not always have the most innovative
        employer branding, learning and development, recognition and performance                                                  actions, they focus on those programmes that they know will have the greatest impact on
        management; and                                                                                                           employees’ sense that they are recognised for their contribution, supported to do great work
      n Taking action in areas where employees see immediate impact.                                                              and see a future for themselves with the organisation.

                                                                                                                                            Key Drivers of Engagement
     Figure 11: Where have you focused your action plans in response to your employee feedback?
                                                                                                                                            Global                                                Europe
                                                           0%       10%        20%      30%      40%      50%      60%      70%             Career Opportunities                                  Career Opportunities
                                                                                                 45%                                        Recognition                                           People/HR Practices
      Career management programmes
                                                                                       32%
                                                                                                                                            People/HR Practices                                   Recognition
                                                                                                                      65%                   Brand Alignment                                       Pay
      Learning and development initiatives
                                                                                                                59%
                                                                                                                                            Pay                                                   Managing Performance
                                                                          20%
      Senior leadership development
                                                                                 27%                                                                                                      Source: Aon Hewitt‘s Global Employee Engagement database, June 2010

                                                                                                          55%                     Involve Employees In Identifying Actions:
      Manager development
                                                                                                         53%
                                                                                                                                  At organisations that make significant improvements in Engagement, employees and
                                                                                                           55%                    managers work together to identify and agree those actions that will be most effective in
      Communication programmes
                                                                                                                 61%              addressing the issues raised.

      Compensation and benefits
                                                                               25%                                                At other organisations the most prevalent approach is for top management to define the
                                                                               25%                                                actions. Where employees are involved in action planning they have greater ownership of the
                                                                                              40%                                 plans and take greater responsibility for their own engagement.
      Recognition programmes
                                                                                       32%
                                                                                                                                  Figure 12: Approaches to Action Planning
                                                                                              40%                                                                                    0%         10%        20%       30%        40%         50%       60%
      Performance management
                                                                                            37%

                                                                                                 45%                                                                                                                                         55%
      Employer branding initiatives                                                                                               HR defines the actions
                                                                                 26%                                                                                                                                                   50%
                                                                                25%
      Recruitment processes
                                                                 11%                                                                                                                                                                   50%
                                                                                                                                  Top management defines actions
                                                                                      30%                                                                                                                                                53%
      Corporate and social responsibility
      programmes                                                          20%

                                                                     15%                                                                                                                                                          45%
      Diversity initiatives                                                                                                       Managers define actions for their teams
                                                                        20%                                                                                                                                                         47%

                                                                                               40%
      Work/life balance initiatives
                                                                                              39%                                 Managers and employees jointly                                                                                  60%
                                                                                                                                  define actions                                                                                      49%
                                                                                      30%
      Innovation programmes
                                                                        17%
                                                                                                                                    Companies with significantly positive increases in employee feedback
               Companies with significantly positive increases in employee feedback                    Other companies              Other companies                                                          Source: Future of Engagement Study, May 2010

                                                                          Source: Future of Engagement Study, May 2010




12     Aon Hewitt Future of Engagement Survey                                                                                                                                                          Aon Hewitt Future of Engagement Survey                   13
Understand What Engages Their Top Talent:                                                                                     Focus On Collecting Data Earlier In The Employment Relationship:
     Leading organisations use their data to understand what impacts Engagement for critical                                       Leading organisations focus on understanding employee needs sooner, rather than later.
     employee groups, such as high-potential employees.
                                                                                                                                   These organisations canvas the perspectives of potential employees and new hires. They
     Employee Engagement matters. It matters more for some employee groups than others.                                            seek to understand the employee experience and to take action to address aspects of the
     Leading organisations are more focused on collecting feedback from their top talents. These                                   experience that are not aligned with the employer promise. Leading organisations are more
     organisations are 50 percent more likely to analyse data from high-potential and high-                                        likely than other organisations to gather employee data at the beginning of the employment
     performing talents to better understand the views of these key talent segments. Sophisticated                                 relationship, for example, 17 percent gather feedback from people declining job offers from
     market research techniques, originally used to understand customers are now being used to                                     the organisation. Only 14 percent of leading organisations conduct exit interviews. Their
     understand and adapt the employee experience. Using data techniques such as segmentation                                      focus is on gathering employee data much earlier in the employment relationship, at a point
     analysis enables HR practices to be adapted and focused to address individual employee                                        in time when action can be taken to address specific concerns and suggestions.
     needs. With the growing diversity within the workplace, leading organisations are
                                                                                                                                   Investments in monitoring the employee experience earlier in the employment life cycle are
     customising their employment experience to address the needs of an increasingly complex
                                                                                                                                   more effective than once the employee has left the organisation. It ensures new employees
     and segmented workforce.
                                                                                                                                   have the support they need to perform and the right expectations are being set and
                                                                                                                                   delivered upon.
     Fgure 13: Do you analyse your employee survey data, to understand the views of these specific
               groups?
                                                0%           10%          20%          30%          40%          50%         60%


                                                                                                                          60%         Gathering employee feedback earlier in the employment life cycle
     Specific management levels
                                                                                                                        58%
                                                                                                                                      The primary focus of early employment surveys is to ensure new employees are
     High-performing or high-potential                                                         40%                                    supported to perform in their new role. Frequent data collection and feedback directly
     employees                                                                26%                                                     to the manager is important.

                                                                     20%                                                              n Conduct short but frequent on-boarding pulse checks, ideally within 30, 90 and
     Critical talent                                                                                                                    180 days of an employee joining the organisation.
                                                                       23%


                                                                                        35%
                                                                                                                                      n Give the results of the on-boarding questionnaire directly to managers, within days
     Gender groups                                                                                                                      of completion.
                                                                                      33%

                                                                                                                                      n The survey should collect feedback on the extent to which new employees:
                                                               15%
     Specific ethnic or cultural groups                                                                                                 - Have clear performance goals;
                                                        10%
                                                                                                                                        - Have been given support and feedback on their performance; and
                                                                                                                                        - Understand the expected behaviours and cultural norms in the organisation.
                                                                                        35%
     Specific age groups
                                                                                      33%
                                                                                                                                      n Information can also be collected at this stage on new employees’ motivations and
                                                                                                                                       working style preferences which can help build the manager/employee relationship.
     No, we do not really target                                          25%
     any groups                                                         22%


             Companies with significantly positive increases in employee feedback                     Other companies

                                                                                    Source: Future of Engagement Study, May 2010




14    Aon Hewitt Future of Engagement Survey                                                                                                                                         Aon Hewitt Future of Engagement Survey      15
Link employee feedback and business outcomes:                                                                                  Figure 15: Perceived benefits of linking employee survey outcomes with performance measures
     Demonstrate the link between Engagement, leadership behaviours and business performance
                                                                                                                                                                        0%      10%      20%     30%     40%      50%    60%     70%     80%     90%    100%
     to increase commitment for action.
     Most organisations have not linked their employee survey outcomes to other key                                                 Increased the perceived value                                      43%
     performance indicators, particularly financial outcomes. Organisations making significant                                      of our employee survey                                             44%
     improvements to employee perceptions are making links to financial outcomes, such as
     revenue and profitability and leadership behaviours. As a result they have greater                                             Increased the importance                                                            64%
     commitment from senior leaders.                                                                                                of our employee survey as an
                                                                                                                                    instrument to drive change                                                    54%

                                                                                                                                    Increased commitment from senior                                                                           93%
     Figure 14: Have you measured the relationship between employee feedback and the following                                      leaders to act on the
                                                                                                                                    survey results                                                                      63%
                business outcomes?
                                                0%              10%             20%             30%            40%            50%
                                                                                                                                    Increased HR’s relevance as                            29%
                                                                                    25%                                             a business partner                                       32%
     Productivity
                                                                                          29%
                                                                                                                                                                           0%
                                                                                                                  45%               Limited or no impact
     Employee turnover                                                                                                                                                     7%
                                                                                                                  45%

                                                                   15%                                                                     Companies with significantly positive increases in employee feedback                   Other companies
     Absenteeism
                                                                                    24%
                                                                                                                                                                                                                   Source: Future of Engagement Study, May 2010
                                                                   15%
     Retention of key talent
                                                                                          29%

                                                                                                   35%                              By linking Engagement outcomes to the leadership
     180°/360° manager feedback                                                                                                                                                                                    Too often leaders focus on a
                                                                        18%                                                         behaviours that impact engagement, leading
                                                                                                                                                                                                                   set of actions around processes
                                                                                                                                    organisations are better able to help leaders identify
                                                                   15%                                                                                                                                             and systems to fix engagement
     Financial indicators
                                                                                                                                    what they might personally focus on to impact
                                                           9%                                                                                                                                                      and ignore how their own
                                                                                                                                    Engagement. They are also able to better focus their
                                                                                                                                                                                                                   behaviours might be impacting
                                                                                                                                    leadership development programmes on those
                                                                                           30%                                                                                                                     their team.
     Customer satisfaction or loyalty                                                                                               competencies that truly make the difference.
                                                                                          29%
                                                                                                                                                                                                                   Leading organisations provide
     We have not established any                                                    25%                                                                                                                            support and guidance for
     of these links                                                                        30%                                                                                                                     managers on how they can
                                                                                                                                                                                                                   improve the effectiveness of
                                                                                                                                                                                                                   their behaviours to improve
             Companies with significantly positive increases in employee feedback                      Other companies
                                                                                                                                                                                                                   engagement.
                                                                                     Source: Future of Engagement Study, May 2010




16    Aon Hewitt Future of Engagement Survey                                                                                                                                                           Aon Hewitt Future of Engagement Survey                     17
Becoming a Leading Organisation                                                                 As we review the findings from the Future of Engagement Study, emerging practices at
                                                                                                     leading organisations and key trends from our global best employer studies we see the
                                                                                                     following practices as being key differentiators in an organisation’s ability to truly engage its
                                                                                                     workforce and drive organisational outcomes:
     Imagine This. You Are A Team Manager…
                                                                                                     Managers Have Access To Critical People Data At The Click Of A Button
     n You regularly review a performance report identifying the status of engagement in your        Organisations that break through the current ‘engagement ceiling’ are more targeted in their
       team. The report:                                                                             reporting to managers, giving managers the people information they need to drive
       - Has real time data, integrated from a number of sources;                                    performance and to manage their own impact. They provide specific feedback, tracking a
       - Draws your attention to issues for critical talent segments; and                            leader’s performance through a broader set of people measures. In addition to Engagement
       - Shows the likely impact on retention and productivity.                                      data, managers access metrics that include employee turnover data, retention risks and
                                                                                                     performance feedback. They have the technology platforms to provide real-time performance
                                                                                                     data and to undertake their own analyses. Leaders are able to focus on priority action areas
     n You have easy access to ‘best practice’ on how to retain and motivate your team;
                                                                                                     and also receive feedback on the impact of the actions they take.


     n You are able to access an online Engagement coach through instant messaging or a              HR Are Experts At Using Employee Data To Predict Opportunities and Risks
       hotline;
                                                                                                     HR teams in these organisations are skilled in presenting employee insights (not reporting
                                                                                                     back data) and at understanding the unique needs of critical talent segments. They connect
     n You can collect additional information to address specific or ad-hoc questions, such as
                                                                                                     engagement data with other HR and business metrics. They identify practical actions that the
       “which employees are most productive?” or “which employees are most likely to resign in
                                                                                                     business can take to improve Employee Engagement and to address talent management
       the next six months?”;
                                                                                                     issues.
     n You receive feedback on the specific behaviours that will make you a more effective leader;
       and
                                                                                                     HR Teams Leverage Employee Insights For Better Individual and Organisational
     n You feel equipped to build and retain the trust and respect of your team.                     Performance
                                                                                                     In organisations that are truly able to drive employee engagement, HR professionals use
     While more leaders are beginning to run their businesses this way, and are reaping the          critical people data to drive business performance. The HR team has the analytical capability
     benefits of a highly engaged team, focused on those areas which create the most value for       to understand how high performance (in specific areas, such as sales, cost reduction, product
     the business, the majority are a long way from this.                                            development) can be achieved. They mine people data to explore what is causing variations
                                                                                                     in performance between teams. This workforce analysis allows them to identify the people
                                                                                                     factors that drive performance in high-performing teams and enables them to use this data
     We know that the future of Engagement is not about employee opinion surveys and data.           to drive organisational change and support improvements in underperforming teams.
     It is about:
                                                                                                     HR Segments The Employee Workforce To Understand Unique Perspectives
     n Ensuring managers have the people information they need to run their business;
                                                                                                     Segmentation analysis helps to better understand the specific challenges of different
     n Skilling HR practitioners to be experts at using employee data to predict organisation        workforce segments. As a result, actions can be directed more specifically towards target
       opportunities and risks and identify actions that leaders can take to move the needle of      employee segments, this is particularly important for diversified businesses and for
       employee engagement and performance; and                                                      organisations managing an increasingly diverse – by virtue of background, role, location,
                                                                                                     culture – workforce. Organisations are able to make changes to HR programmes and policies
     n Creating insights and understanding of how to drive performance.                              in order to meet the needs of specific employee groups. Segmentation analysis can also be
                                                                                                     used by managers to ensure they are using the most effective approach to engage individuals
                                                                                                     within their teams.




18    Aon Hewitt Future of Engagement Survey                                                                                                              Aon Hewitt Future of Engagement Survey         19
The Future of Engagement Starts Here                                                               Contacts
     The future of Engagement is about giving leaders the information, tools and skills they need       If you would like more information, please contact:
     to lead their teams effectively to drive business performance. As you consider how you move        Austria & Switzerland
     your Engagement approach into the future there are three actions we recommend to help              Wolfgang Nemetz	      wolfgang.nemetzl@aonhewitt.com	           Tel.: +43 1 712 99 81 40
     you get started:
                                                                                                        Belgium
     Get Senior Leaders To Buy-In To The Vision Of The Future.                                          An van der Weken	        an.van.der.weken@aonhewitt.com	        Tel.: +32 2 743 86 11
     Ask leaders to imagine a future where they receive regular insights on the blockers and enablers
     of the business strategy; where they receive feedback on the impact of their behaviour on          Czech Republic & Slovakia
     Employee Engagement; where they have access to predictive analysis to support business             Karel Palata	        karel.palata@aonhewitt.com       		        Tel.: +420 271 001 370
     decisions. Ask them to describe how that will help them run the business more effectively and
     what commitments they are willing to make to achieve this. Compare this to their experience        Denmark/Finland/Norway/Sweden
     today.                                                                                             Magnus Persson	    magnus.persson@aonhewitt.com 	               Tel.: +46 8 505 559 38

                                                                                                        France
     Take Stock Of The Data Sources You Have, Amount Of Value You Receive And What You Need.
                                                                                                        Christelle Poumes	       christelle.poumes@aonhewitt.com	       Tel.: +33 1 47 83 13 83
     Review your current data sources.
     Which of these do you use?                                                                         Germany
     Which data sources could you integrate in order to gain a deeper perspective on employee issues?   Nicole Schadewald	       nicole.schadewald@aonhewitt.com 	      Tel.: +49 611 92883 114
     Are you using data that is more pre-emptive of issues or is it evaluating the past?
     What other data could you begin to collect and analyse in order to highlight talent management     Greece
     challenges and successes and identify areas for action?                                            Alexandra Eleftheriou	   alexandra.eleftheriou@aonhewitt.com	   Tel.: +30 210 747 2760

                                                                                                        Hungary
     Investigate How You Can Exploit Technology To Deliver Insights And Drive Accountability.           Rita Veres	              rita.veres@aonhewitt.com 		            Tel.: +36 1 801-8011
     Review the platforms you currently use to gather employee feedback, to discuss and agree
                                                                                                        Italy
     actions and to report back on progress.
                                                                                                        Giorgio Boraso 	         giorgio.boraso@aonhewitt.com		         Tel.: +39 2 89077797
     What platforms could you use to deliver insights and share best practices?
     Can you use your intranet to send a daily or weekly tip on effective Engagement strategies?
                                                                                                        Middle East
     Can you invite employees to a webinar on career development activities?
                                                                                                        Samir Mardini	           samir.mardini@aonhewitt.com		          Tel.: ++ 971 4433 0960
     Can you provide managers with regular online feedback on how they are tracking against
     critical people management indicators?                                                             Poland & Russia
                                                                                                        Magdalena Warzybok	      magdalena.warzybok@aonhewitt.com	      Tel.: +48 22 696 52 23
     Harnessing the power of your employees is not easy. In current times many organisations are
     struggling to re-energise and re-focus a workforce that is showing fatigue in response to the      South Africa
     ongoing uncertainty and increasing complexity of the world of work. Yet now more than ever         Jaco Kok	                aco.kok@aonhewitt.com		                Tel.; +27 11 944 7441
     Engagement matters. Leading organisations don’t just collect employee data. Leading
     organisations use employee insights to improve current performance and prepare for the             Spain
     future.                                                                                            Jorge Jimenez Urizar 	   jorge.jimenez.urizar@aonhewitt.com	    Tel.: ++34 91 340 54 89

                                                                                                        The Netherlands
                                                                                                        Brenda Broad	            brenda.broad@aonhewitt.com		           Tel.: ++31 88 1006539

                                                                                                        United Kingtom
                                                                                                        Jenny Merry	             jenny.merry@aonhewitt.com		            Tel.: ++44 1 727 888395




20    Aon Hewitt Future of Engagement Survey
About Aon Hewitt
     Aon Hewitt is the global leader in human resource consulting and outsourcing solutions.
     The company partners with organisations to solve their most complex benefits, talent
     and related financial challenges, and improve business performance. Aon Hewitt designs,
     implements, communicates and administers a wide range of human capital, retirement,
     investment management, health care, compensation and talent management strategies.
     With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better
     place to work for clients and their employees.
     For more information on Aon Hewitt, please visit www.aonhewitt.com.




© Aon Hewitt 2010

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The Future of Employee Engagement - Aon Hewitt

  • 1. Survey Findings The Future of Engagement How can you leverage your employee study to drive business performance? Aon Hewitt Future of Engagement Survey i
  • 2. Contents The Future of Engagement Introduction The Future of Engagement 1 This report provides an overview of Employee Engagement ____ practices in 150 companies across Europe. Our research The Research Findings 4 shows that while many organisations are taking a similar _________________________________________ approach to gathering employee feedback only a few stand out in terms of their ability to increase Employee What is Different at Leading Organisations? 10 Engagement in challenging times. The report outlines _________________________________________ common practices and the practices of these exceptional Becoming a Leading Organisation 18 few. _________________________________________ More Than Ever, Employee Engagement Matters The Future of Engagement Starts Here 20 We live in complex times. New paradigms of working Aon Hewitts’ research over the _________________________________________ are emerging and organisations are seeking to past 10 years shows that understand and act on these. Changing regulatory Employee Engagement environments, organisational restructuring, challenges – the emotional and intellectu- of diversity and inclusion, the demand for corporate al involvement that motivates social responsibility and the ability to manage a employees to contribute to cross-generational workforce, are all part of the fabric organisational success – of today’s working world. At the same time, is a critical component of organisations report that talent shortages and the organisational performance. aging workforce are creating additional pressure on their ability to find and retain the best talent. More A highly engaged workforce is than ever, Employee Engagement matters. While in up to 78 percent more produc- past times organisations may have debated the tive and 40 percent more importance of Employee Engagement, today the profitable than a disengaged power of an engaged workforce is well understood workforce. and a sought after asset. Acknowledgements However, while organisations acknowledge the power of engagement, many struggle to make progress in this area. Aon Hewitt’s latest research shows that employee loyalty and This research is the result of the efforts of a significant number of our associates across the engagement is waning. At a time when organisations are looking to employees to help them world led by Jennifer Pangas, Ted Marusarz, Jenny Merry and Rita Veres. Thank you to reduce costs, identify areas for growth, streamline processes and innovate faster than their Giorgio Boraso, Didier Burgaud, Michael Hermann, Martina Huitfeld, Pramita Joardar, Divyaj competitors, employees in many organisations are showing fatigue in response to the lengthy Kamboj, Rosie Moreau, Catherine Mudford, Wolfgang Nemetz, Sophie Oberkampf, Magnus period of stress, uncertainty and confusion of the economic downturn. Persson, Elisabeth Preihs, Iqbal Razi, Adam Rubicsek, Annick Ruedi, Nicole Schadewald, Conny Schättle, Christophe Swaenepoel, Noemi Szijjarto and Celia Tripp. Aon Hewitt Future of Engagement Survey 1
  • 3. Aon Hewitt has analysed Employee Engagement levels across more than 900 organisations So What Is Different At These Organisations? around the world that conducted a repeat engagement study in each of the last eight There is a significant gap between common practice and best practice. In many organisations quarters since July 2008. Historically, about half of those organisations improve their the collection of Employee Engagement data is managed as an administrative process, engagement levels in a one- or two-year period, while 15 percent experience a decline. investments are focused on data collection, reporting and communication. Organisations are However, the past two years have been more challenging: the percentage of organisations adept at collecting the data; they set clear accountabilities and effectively communicate with declining engagement has been steadily increasing. This trend was particularly notable expectations to senior leaders, managers and employees in that process. Then, when it in 2010. Aon Hewitt’s research shows that 46 percent of organisations experienced a decline comes to taking action, these accountabilities get dispersed and governance models are in engagement levels in the quarter ending June 2010, while just 30 percent saw an unclear. improvement. At organisations with increasing Employee Engagement, In many organisations, leaders have a clear purpose for gathering employee Figure 1: Percentage of Organisations with Increasing and Decreasing Engagement Levels employee survey outcomes opinions – Employee Engagement data is part of a set stop at the stage of generating of critical integrated metrics that leaders use to make 50% a set of interesting facts. resourcing, workflow, cost reduction and investment 50 50% 47% 46% decisions. Within these organisations leaders and their The link between the results and the day-to-day decisions 42% teams have clear accountability for exploring results 40% required to improve is missing. and deciding on priority actions. The strategy, structure 40 43% 40% 42% 37% 35% 34% and systems support leaders in understanding and 37% improving Employee Engagement and driving 29% performance. 30 30% 31% 31% 30% 31% 30% 32% 29% 25% Savvy HR practitioners implement methodologies and technology platforms that enable 25% 25% 26% leaders to: 20 20% n Understand how their own behaviour impacts Employee Engagement; 15% n Segment employee data in order to gain better insight into the needs of critical talent 10 Historical 10% segments; Jul-Dec Jan-Jun Jul-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec Trend 08 09 09 10 10 10 10 11 11 11 11 n Access best practice suggestions and advice on demand; and Decrease (<=-4%) Increase (>=+4%) n Link Employee Engagement data with other people and business metrics to demonstrate the impact. Succeeding In Uncertainty Despite the challenges faced by organisations today, some are able to drive improvements in Employee Engagement and sustain high levels of loyalty. As a result these organisations are better able to: n Attract the best employees; n Keep the talented employees they already have; n Motivate their employees to give their best; n Monitor levels of employee well-being; and n Outperform the market and their competitors financially. 2 Aon Hewitt Future of Engagement Survey Aon Hewitt Future of Engagement Survey 3
  • 4. The Research Findings Who Is Collecting Employee Opinion Data? In an economic climate where organisations having been looking to cut or reduce expenditure that is deemed non-essential, the good news is that most organisations are continuing to collect employee feedback and conduct employee research. 93 percent of Study Overview participating organisations conduct employee surveys; 85 percent have conducted a study In May 2010 Aon Hewitt conducted a European-wide study into organisational Employee within the past 2 years. Engagement practices – The Future of Engagement. The findings from this research reveal current Employee Engagement practices and highlight the practices of those organisations Figure 4: When did you conduct your latest employee survey? that, over the past two years, have experienced a significant positive increase in their Employee Engagement, despite the challenging economic environment. More than 3 years ago: 7% 2 to 3 years ago: 8% Within the past 3 months: 21% Survey Participants Aon Hewitt surveyed organisations across Europe to understand what is making the difference in their engagement improvement programmes. There were 150 participants in the study. These organisations were a mix of small (<250 employees) and large organisations (>30,000 employees) and global, regional and local organisations. Participating organisations represent a broad range of industry sectors. 1 to 2 years ago: 21% Figure 2: Respondent Profile by Number of Employees 3 to 6 months ago: 16% More than 30,000: 13% Below 250: 23% 10,001 to 30,000: 13% 6 months to 1 year ago: 27% Source: Future of Engagement Study, May 2010 250 to 500: 11% 5,001 to 10,000: 10% What Type Of Employee Feedback Is Being Gathered? In the study we asked organisations what other employee feedback they gather in addition to their employee opinion surveys. We found that in addition to employee opinion surveys, the 501 to 1,000: 9% predominant form of employee data collected was from exit interviews. 73 percent of 1,001 to 5,000: 21% companies collect information from employees leaving the organisation. 34 percent of Figure 3: organisations gather employee feedback as part of their on-boarding process and 12 percent of organisations gather feedback from candidates who have declined job offers with their Respondent Profile Structure organisation. The results show that there is a much greater focus on collecting employee Local: 28% feedback at the end of the employee life cycle rather than the beginning. For many organisations it would appear that the message is “while you’re here we’re happy just to have you do your job but once you decide to leave then we want to know why”. Global: 49% Regional: 23% Source: Future of Engagement Study, May 2010 4 Aon Hewitt Future of Engagement Survey Aon Hewitt Future of Engagement Survey 5
  • 5. Type of Employee Feedback Channels Is Employee Feedback Being Integrated With Other Data? We also asked organisations if they were integrating their employee opinion data with other Employee Life Cycle Survey Objective people measures, such as performance ratings, potential ratings, productivity ratios or compensation data. A surprisingly high number of organisations, 87 percent, reported that Market Survey Measures the attractiveness of the organisation as an employer, their people data is well integrated or partially integrated across the organisation. However, (Pre-Employment) perceptions of the external customer and employee brand. this integrated data is predominantly used to identify historic trends rather than to focus on Measures the candidate experience, reasons for rejection and future scenarios. 73 percent of organisations say that this information is used to identify Candidate Rejection willingness to apply for other positions within the organisation. trends in the employee situation over time while only 24 percent say this information is used Measures the candidate experience, reasons for acceptance and to predict future employee issues. Candidate Acceptance expectations for the role. 30 days: Measures the onboarding experience, degree of clarity Figure 5: Integrated information is used to look back, not for predictive analyses on performance goals and cultural integration. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90 days: Measures role fit, likelihood of disengagement or exit On-boarding, Information is used to track the and the extent to which the new employee has been supported 59% (30 days, 90 days current employee situation to perform. and 180 days) Information is used to identify trends 180 days: Measures role fit, likelihood of disengagement or exit 73% in the employee situation over time and the extent to which the new employee has been supported to Information is used to predict the perform. 24% future employee situation Measures the extent to which people are engaged to deliver their Source: Future of Engagement Study, May 2010 Engagement Survey best work and what factors are influencing this level of Engagement. Measures employee perceptions of the behaviours in the HR business partners, rather than people managers, are still the primary users of people data. organisation, how they match to their own values and if the In 78 percent of organisations HR business partners access and use this data. In three out of Values Survey organisation is living the desired values and behaviours it says it every ten organisations line managers do not access or use this people data. stands for. Addresses a specific engagement issue, such as career opportunities. This is important for employees at critical stages in Figure 6: Line managers’ role in using employee data is not emphasized Engagement Pulse the employee life cycle, key talent and employees performing in 0% 10% 20% 30% 40% 50% 60% 70% 80% or Targeted Survey critical roles. One example of this is surveying employees after 2-3 years in the organisation who are most likely at a critical career Executive board 76% stage. Measures role fit, likelihood of disengagement or exit and the Line managers 65% Transition Survey extent to which the employeee has been supported to perform in their new role. HR business partners 78% Measures reasons for leaving and the possibilty of Exit Survey re-engagement. Can be focused on regretted losses. HR centres of expertise 25% Tests attractiveness of the organisation as an employer, Source: Future of Engagement Study, May 2010 the likelihood of re-joining the organisation or refering the Alumni Survey organisation to colleagues. Can also measure perceptions of the external customer and employee brand. 6 Aon Hewitt Future of Engagement Survey Aon Hewitt Future of Engagement Survey 7
  • 6. How Is The Employee Feedback Being Communicated? Figure 8: Where have you focused your action plans in response to your employee feedback? 0% 10% 20% 30% 40% 50% 60% 99 percent of participating organisations share their Organisations are not yet results and use multiple channels for communication. Career management programmes adopting new technologies for 34% Face-to-face forums, such as focus groups, workshops communication, with only and team meetings are the most popular forms of Learning and development initiatives 57% 6 percent of organisations communication. using electronic forums, such Senior leadership development 25% as blogs, chat rooms and Manager development 52% webinars. Communication programmes 57% Compensation and benefits 27% Figure 7: How do you communicate the results of your employee opinion survey to employees? Recognition programmes 32% 0% 10% 20% 30% 40% 50% 60% 70% 80% Paper-based communication, such as 28% Performance management 36% newsletters or internal newspaper 46% Employer branding initiatives 28% 44% E-mail or intranet postings Recruitment processes 59% 13% Information events, such as large 48% Corporate and social responsibility programmes 20% conferences or presentations 50% Diversity initiatives 19% Face-to-face forums, such as focus 60% groups, team meetings or workshops 70% Work/life balance initiatives 38% Two-way electronic forums, such as 7% Innovation programmes 18% chat rooms, blogs or webinars 6% Source: Future of Engagement Study, May 2010 Companies with significantly positive increases in employee feedback Other companies Source: Future of Engagement Study, May 2010 Action planning is still mainly initiated and defined by HR. In 50 percent of organisations HR is held accountable for initiating and defining action plans and in 46 percent of organisations Where Are Organisations Focusing Their Action Plans? it is HR that is held accountable for following the action planning process. While 99 percent of organisations take action based on their employee feedback, this does not guarantee results. Hewitt research shows that most organisations focus on the following Are Organisations Segmenting Their Data To Understand The Unique Needs Of areas: learning and development initiatives, communication programmes, manager Specific Employee Groups? development. Close to a quarter of organisations do not segment their employee data to understand the experiences of different employee segments and are unable to determine whether their critical talent segments are more or less engaged than other employee groups. Where organisations do undertake segmentation analysis the primary focus is on distinctions between different levels of management. What is the Perceived Value of The Employee Data Collected? Organisations still struggle with getting buy-in from executives on the value of engagement surveys. While 72 percent of participating organisations agree that overall their organisation acknowledges the value that the employee survey brings, only 54 percent of participating organisations agree that their executive boards see their employee survey process as being critical to organisational success. Those companies that are able to link employee survey outcomes with performance measures see increased commitment from senior leaders to act on the results. 8 Aon Hewitt Future of Engagement Survey Aon Hewitt Future of Engagement Survey 9
  • 7. What is Different at Leading Organisations? Hold Leaders Accountable For Taking Action: There are more practices in place to build accountability amongst leaders and it is less likely that HR will be responsible for taking action. Leaders at organisations making significant improvements in Engagement take more Of those organisations responding to the study, a quarter have seen little or no change in ownership for taking action on the information. They are held accountable through the Employee Engagement levels over the last two years, while another quarter have seen performance management process for developing plans and taking action to address engagement levels decline. 36 percent have seen a slight increase in engagement levels and Employee Engagement. 16 percent of participating organisations have seen a significant increase in engagement levels. We refer to these organisations that have experienced significant increases in Employee Engagement as ‘Leading Organisations.’ Figure 10: What practices do you use to build accountability for responding to the employee feedback? When we analysed the differences between those leading organisations and the others, we 0% 10% 20% 30% 40% 50% 60% 70% see a number of differences. Those organisations that are able to ‘move the needle’ on improving Employee Engagement are more likely to do the following things: Leaders are held accountable for 56% achieving pre-defined targets 49% Start With A Very Specific Objective For Their Survey: They go beyond measuring employee attitudes and benchmarking to address the impact of Leaders are held accountable for 63% Employee Engagement on business and HR strategies. following the action planning process 54% Organisations that made significant improvements to employees’ perceptions went beyond wanting to simply measure employee attitudes, they were purposeful in using the survey to HR is held accountable for achieving collect data for input into the strategic business plan or to assess the impact of HR pre-defined targets 21% programmes and practices. HR is held accountable for following 38% Figure 9: Primary reasons for conducting an employee survey the action planning process 47% 0% 10% 20% 30% 40% 50% 60% HR collects informal feedback 25% 16% to measure progress 38% Benchmark ourselves against competitors 11% HR facilitates follow-up meetings 50% Benchmark ourselves against 21% to share progress and success stories 51% high-performing organisations 17% Companies with significantly positive increases in employee feedback Other companies Measure current employee attitude 47% and morale 57% Source: Future of Engagement Study, May 2010 Address specific employee issue 21% (i.e. turnover) 17% How Do You Build Leadership Accountability? Collect data for input into HR/people 16% programmes 18% n Take the measure of Engagement seriously. Discuss it at management meetings, incorporate it into corporate scorecards and individual performance plans. Collect data for input into business 21% n Reinforce the link between high engagement and performance, again and again. strategic plan 10% n Ensure the data collected directs managers to what they can change. This might be Assess the impact of our HR/people 16% specific behaviours or actions around learning and development, career programmes 9% management or recognition practices. Drive change in the organisation 37% n Be clear that being a leader is about motivating people to achieve a set of common and improve performance 45% goals. Build this into leadership development programmes and value it as highly as Companies with significantly positive increases in employee feedback technical expertise. Other companies Source: Future of Engagement Study, May 2010 10 Aon Hewitt Future of Engagement Survey Aon Hewitt Future of Engagement Survey 11
  • 8. Focus Actions On The Areas That Matter Most To Engagement: Aon Hewitt’s global employee research shows that during normal times certain drivers are Leading organisations focus on the fundamentals first, making sure that their managers critical to Engagement. These include: Leadership, Career Opportunities, Performance spend time on the areas that really do impact Engagement, not just satisfaction. Management, Reward and Recognition. Our research shows that in the current economic climate the drivers of Engagement have changed. Career Opportunities, People/HR Practices While 99 percent of organisations take action based on their employee feedback, this does and Recognition are now the most critical for engaging employees. not guarantee results. Leading organisations are: However, organisations are struggling to make progress in those areas which have a strong n More focused on the areas that matter to employees, such as: career opportunities, impact on engagement. Leading organisations do not always have the most innovative employer branding, learning and development, recognition and performance actions, they focus on those programmes that they know will have the greatest impact on management; and employees’ sense that they are recognised for their contribution, supported to do great work n Taking action in areas where employees see immediate impact. and see a future for themselves with the organisation. Key Drivers of Engagement Figure 11: Where have you focused your action plans in response to your employee feedback? Global Europe 0% 10% 20% 30% 40% 50% 60% 70% Career Opportunities Career Opportunities 45% Recognition People/HR Practices Career management programmes 32% People/HR Practices Recognition 65% Brand Alignment Pay Learning and development initiatives 59% Pay Managing Performance 20% Senior leadership development 27% Source: Aon Hewitt‘s Global Employee Engagement database, June 2010 55% Involve Employees In Identifying Actions: Manager development 53% At organisations that make significant improvements in Engagement, employees and 55% managers work together to identify and agree those actions that will be most effective in Communication programmes 61% addressing the issues raised. Compensation and benefits 25% At other organisations the most prevalent approach is for top management to define the 25% actions. Where employees are involved in action planning they have greater ownership of the 40% plans and take greater responsibility for their own engagement. Recognition programmes 32% Figure 12: Approaches to Action Planning 40% 0% 10% 20% 30% 40% 50% 60% Performance management 37% 45% 55% Employer branding initiatives HR defines the actions 26% 50% 25% Recruitment processes 11% 50% Top management defines actions 30% 53% Corporate and social responsibility programmes 20% 15% 45% Diversity initiatives Managers define actions for their teams 20% 47% 40% Work/life balance initiatives 39% Managers and employees jointly 60% define actions 49% 30% Innovation programmes 17% Companies with significantly positive increases in employee feedback Companies with significantly positive increases in employee feedback Other companies Other companies Source: Future of Engagement Study, May 2010 Source: Future of Engagement Study, May 2010 12 Aon Hewitt Future of Engagement Survey Aon Hewitt Future of Engagement Survey 13
  • 9. Understand What Engages Their Top Talent: Focus On Collecting Data Earlier In The Employment Relationship: Leading organisations use their data to understand what impacts Engagement for critical Leading organisations focus on understanding employee needs sooner, rather than later. employee groups, such as high-potential employees. These organisations canvas the perspectives of potential employees and new hires. They Employee Engagement matters. It matters more for some employee groups than others. seek to understand the employee experience and to take action to address aspects of the Leading organisations are more focused on collecting feedback from their top talents. These experience that are not aligned with the employer promise. Leading organisations are more organisations are 50 percent more likely to analyse data from high-potential and high- likely than other organisations to gather employee data at the beginning of the employment performing talents to better understand the views of these key talent segments. Sophisticated relationship, for example, 17 percent gather feedback from people declining job offers from market research techniques, originally used to understand customers are now being used to the organisation. Only 14 percent of leading organisations conduct exit interviews. Their understand and adapt the employee experience. Using data techniques such as segmentation focus is on gathering employee data much earlier in the employment relationship, at a point analysis enables HR practices to be adapted and focused to address individual employee in time when action can be taken to address specific concerns and suggestions. needs. With the growing diversity within the workplace, leading organisations are Investments in monitoring the employee experience earlier in the employment life cycle are customising their employment experience to address the needs of an increasingly complex more effective than once the employee has left the organisation. It ensures new employees and segmented workforce. have the support they need to perform and the right expectations are being set and delivered upon. Fgure 13: Do you analyse your employee survey data, to understand the views of these specific groups? 0% 10% 20% 30% 40% 50% 60% 60% Gathering employee feedback earlier in the employment life cycle Specific management levels 58% The primary focus of early employment surveys is to ensure new employees are High-performing or high-potential 40% supported to perform in their new role. Frequent data collection and feedback directly employees 26% to the manager is important. 20% n Conduct short but frequent on-boarding pulse checks, ideally within 30, 90 and Critical talent 180 days of an employee joining the organisation. 23% 35% n Give the results of the on-boarding questionnaire directly to managers, within days Gender groups of completion. 33% n The survey should collect feedback on the extent to which new employees: 15% Specific ethnic or cultural groups - Have clear performance goals; 10% - Have been given support and feedback on their performance; and - Understand the expected behaviours and cultural norms in the organisation. 35% Specific age groups 33% n Information can also be collected at this stage on new employees’ motivations and working style preferences which can help build the manager/employee relationship. No, we do not really target 25% any groups 22% Companies with significantly positive increases in employee feedback Other companies Source: Future of Engagement Study, May 2010 14 Aon Hewitt Future of Engagement Survey Aon Hewitt Future of Engagement Survey 15
  • 10. Link employee feedback and business outcomes: Figure 15: Perceived benefits of linking employee survey outcomes with performance measures Demonstrate the link between Engagement, leadership behaviours and business performance 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% to increase commitment for action. Most organisations have not linked their employee survey outcomes to other key Increased the perceived value 43% performance indicators, particularly financial outcomes. Organisations making significant of our employee survey 44% improvements to employee perceptions are making links to financial outcomes, such as revenue and profitability and leadership behaviours. As a result they have greater Increased the importance 64% commitment from senior leaders. of our employee survey as an instrument to drive change 54% Increased commitment from senior 93% Figure 14: Have you measured the relationship between employee feedback and the following leaders to act on the survey results 63% business outcomes? 0% 10% 20% 30% 40% 50% Increased HR’s relevance as 29% 25% a business partner 32% Productivity 29% 0% 45% Limited or no impact Employee turnover 7% 45% 15% Companies with significantly positive increases in employee feedback Other companies Absenteeism 24% Source: Future of Engagement Study, May 2010 15% Retention of key talent 29% 35% By linking Engagement outcomes to the leadership 180°/360° manager feedback Too often leaders focus on a 18% behaviours that impact engagement, leading set of actions around processes organisations are better able to help leaders identify 15% and systems to fix engagement Financial indicators what they might personally focus on to impact 9% and ignore how their own Engagement. They are also able to better focus their behaviours might be impacting leadership development programmes on those 30% their team. Customer satisfaction or loyalty competencies that truly make the difference. 29% Leading organisations provide We have not established any 25% support and guidance for of these links 30% managers on how they can improve the effectiveness of their behaviours to improve Companies with significantly positive increases in employee feedback Other companies engagement. Source: Future of Engagement Study, May 2010 16 Aon Hewitt Future of Engagement Survey Aon Hewitt Future of Engagement Survey 17
  • 11. Becoming a Leading Organisation As we review the findings from the Future of Engagement Study, emerging practices at leading organisations and key trends from our global best employer studies we see the following practices as being key differentiators in an organisation’s ability to truly engage its workforce and drive organisational outcomes: Imagine This. You Are A Team Manager… Managers Have Access To Critical People Data At The Click Of A Button n You regularly review a performance report identifying the status of engagement in your Organisations that break through the current ‘engagement ceiling’ are more targeted in their team. The report: reporting to managers, giving managers the people information they need to drive - Has real time data, integrated from a number of sources; performance and to manage their own impact. They provide specific feedback, tracking a - Draws your attention to issues for critical talent segments; and leader’s performance through a broader set of people measures. In addition to Engagement - Shows the likely impact on retention and productivity. data, managers access metrics that include employee turnover data, retention risks and performance feedback. They have the technology platforms to provide real-time performance data and to undertake their own analyses. Leaders are able to focus on priority action areas n You have easy access to ‘best practice’ on how to retain and motivate your team; and also receive feedback on the impact of the actions they take. n You are able to access an online Engagement coach through instant messaging or a HR Are Experts At Using Employee Data To Predict Opportunities and Risks hotline; HR teams in these organisations are skilled in presenting employee insights (not reporting back data) and at understanding the unique needs of critical talent segments. They connect n You can collect additional information to address specific or ad-hoc questions, such as engagement data with other HR and business metrics. They identify practical actions that the “which employees are most productive?” or “which employees are most likely to resign in business can take to improve Employee Engagement and to address talent management the next six months?”; issues. n You receive feedback on the specific behaviours that will make you a more effective leader; and HR Teams Leverage Employee Insights For Better Individual and Organisational n You feel equipped to build and retain the trust and respect of your team. Performance In organisations that are truly able to drive employee engagement, HR professionals use While more leaders are beginning to run their businesses this way, and are reaping the critical people data to drive business performance. The HR team has the analytical capability benefits of a highly engaged team, focused on those areas which create the most value for to understand how high performance (in specific areas, such as sales, cost reduction, product the business, the majority are a long way from this. development) can be achieved. They mine people data to explore what is causing variations in performance between teams. This workforce analysis allows them to identify the people factors that drive performance in high-performing teams and enables them to use this data We know that the future of Engagement is not about employee opinion surveys and data. to drive organisational change and support improvements in underperforming teams. It is about: HR Segments The Employee Workforce To Understand Unique Perspectives n Ensuring managers have the people information they need to run their business; Segmentation analysis helps to better understand the specific challenges of different n Skilling HR practitioners to be experts at using employee data to predict organisation workforce segments. As a result, actions can be directed more specifically towards target opportunities and risks and identify actions that leaders can take to move the needle of employee segments, this is particularly important for diversified businesses and for employee engagement and performance; and organisations managing an increasingly diverse – by virtue of background, role, location, culture – workforce. Organisations are able to make changes to HR programmes and policies n Creating insights and understanding of how to drive performance. in order to meet the needs of specific employee groups. Segmentation analysis can also be used by managers to ensure they are using the most effective approach to engage individuals within their teams. 18 Aon Hewitt Future of Engagement Survey Aon Hewitt Future of Engagement Survey 19
  • 12. The Future of Engagement Starts Here Contacts The future of Engagement is about giving leaders the information, tools and skills they need If you would like more information, please contact: to lead their teams effectively to drive business performance. As you consider how you move Austria & Switzerland your Engagement approach into the future there are three actions we recommend to help Wolfgang Nemetz wolfgang.nemetzl@aonhewitt.com Tel.: +43 1 712 99 81 40 you get started: Belgium Get Senior Leaders To Buy-In To The Vision Of The Future. An van der Weken an.van.der.weken@aonhewitt.com Tel.: +32 2 743 86 11 Ask leaders to imagine a future where they receive regular insights on the blockers and enablers of the business strategy; where they receive feedback on the impact of their behaviour on Czech Republic & Slovakia Employee Engagement; where they have access to predictive analysis to support business Karel Palata karel.palata@aonhewitt.com Tel.: +420 271 001 370 decisions. Ask them to describe how that will help them run the business more effectively and what commitments they are willing to make to achieve this. Compare this to their experience Denmark/Finland/Norway/Sweden today. Magnus Persson magnus.persson@aonhewitt.com Tel.: +46 8 505 559 38 France Take Stock Of The Data Sources You Have, Amount Of Value You Receive And What You Need. Christelle Poumes christelle.poumes@aonhewitt.com Tel.: +33 1 47 83 13 83 Review your current data sources. Which of these do you use? Germany Which data sources could you integrate in order to gain a deeper perspective on employee issues? Nicole Schadewald nicole.schadewald@aonhewitt.com Tel.: +49 611 92883 114 Are you using data that is more pre-emptive of issues or is it evaluating the past? What other data could you begin to collect and analyse in order to highlight talent management Greece challenges and successes and identify areas for action? Alexandra Eleftheriou alexandra.eleftheriou@aonhewitt.com Tel.: +30 210 747 2760 Hungary Investigate How You Can Exploit Technology To Deliver Insights And Drive Accountability. Rita Veres rita.veres@aonhewitt.com Tel.: +36 1 801-8011 Review the platforms you currently use to gather employee feedback, to discuss and agree Italy actions and to report back on progress. Giorgio Boraso giorgio.boraso@aonhewitt.com Tel.: +39 2 89077797 What platforms could you use to deliver insights and share best practices? Can you use your intranet to send a daily or weekly tip on effective Engagement strategies? Middle East Can you invite employees to a webinar on career development activities? Samir Mardini samir.mardini@aonhewitt.com Tel.: ++ 971 4433 0960 Can you provide managers with regular online feedback on how they are tracking against critical people management indicators? Poland & Russia Magdalena Warzybok magdalena.warzybok@aonhewitt.com Tel.: +48 22 696 52 23 Harnessing the power of your employees is not easy. In current times many organisations are struggling to re-energise and re-focus a workforce that is showing fatigue in response to the South Africa ongoing uncertainty and increasing complexity of the world of work. Yet now more than ever Jaco Kok aco.kok@aonhewitt.com Tel.; +27 11 944 7441 Engagement matters. Leading organisations don’t just collect employee data. Leading organisations use employee insights to improve current performance and prepare for the Spain future. Jorge Jimenez Urizar jorge.jimenez.urizar@aonhewitt.com Tel.: ++34 91 340 54 89 The Netherlands Brenda Broad brenda.broad@aonhewitt.com Tel.: ++31 88 1006539 United Kingtom Jenny Merry jenny.merry@aonhewitt.com Tel.: ++44 1 727 888395 20 Aon Hewitt Future of Engagement Survey
  • 13. About Aon Hewitt Aon Hewitt is the global leader in human resource consulting and outsourcing solutions. The company partners with organisations to solve their most complex benefits, talent and related financial challenges, and improve business performance. Aon Hewitt designs, implements, communicates and administers a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies. With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees. For more information on Aon Hewitt, please visit www.aonhewitt.com. © Aon Hewitt 2010