Working on it

High staff turnover can cost companies dearly, both in cash and performance. Although nerve-wracking for management, a staff survey can help to isolate the causes of the problem.

Living in a Dilbert-esque working world, alienated and disaffected in their individual cubicles, fed up with management and unconcerned for the welfare of their company, few employees have much faith in their employers, leaving for pastures new once they have gleaned as much information and experience as they can.

According to Fred Martels, human resources consultant at US-based, an average company’s annual staff turnover is 60 per cent. In a company of 500 employees, with an average turnover cost of $1,700 (&£1,200) per employee, the annual cost of replacing staff adds up to over &£350,000.

All keep financial records, monitoring costs and profits, but not all companies measure customer and employee satisfaction.

“You need to align the three interests of your company – staff, shareholders and customers,” says Julian Treasure, chairman of customer communications agency TPD. “Working on Richard Branson’s tenet that without happy and satisfied staff, you don’t have happy and satisfied customers, I don’t think you can ensure success unless you know the needs of your staff.”

Mind if I ask you some questions?

A good staff survey tries to measure the health of a relationship, believes Judy Morrell, director of business at research company NOP. “You’re looking at the mutual benefit derived from the relationship between employer and employee, and trying to maximise it, which is how employee research bears similarities to customer or respondent research.”

Employee satisfaction is similar to customer satisfaction, in that any research undertaken in the area is a sensitive issue, agrees Emma Partridge, director of the corporate and financial unit at research specialists TRBi: “There can be difficulties when management discovers it is not on the same wavelength as the workforce. Employees are crucial communicators of the brand, so the company needs to show it’s embracing the opinions of its staff. The more dialogue there is, the more chance a company has of tapping into the workforce’s potential. There is also evidence that consumers are affected by how an organisation treats its workforce – people don’t want to do business with a company that treats its staff badly.”

There are some differences between employee and customer satisfaction research, however, according to Tony Page, independent consultant and author of Diary of a Change Agent. The key difference is the basis of the relationship. “An employee talking about what is going on in the company has a sense of washing dirty linen in public – there’s a personal and political side to their reaction. It’s like a parent-child relationship. You don’t get this type of reaction in consumer research.”

According to Roffey Park’s Management Agenda 2001 survey, employee morale is generally low, often as a result of change within their company. The primary concerns appear to be:

– Dissatisfaction at heavy workloads that result in long hours;

– Conflict at work;

– Spill-over into home life;

– Low trust and respect for bosses;

– Reduced sense of loyalty;

– Political behaviour within organisations;

– Strong desire for leadership and clear direction.

Many companies worry that any surveys they undertake with staff will result in a festival of whingeing reminiscent of Kevin the Teenager’s worst days. However, not to survey because of this is short-sighted, says Page. “Twenty or 30 years ago employment was very different. Work was more manufacturing-based and more authoritarian. Today’s management style is more democratic.”

Economic growth has been concentrated in the service and knowledge sectors, says Page. “These sectors are based on people, and brands in this area are more emotional in their delivery. For example, in their advertising most airlines emphasise how their in-flight staff make you feel.”

Code of silence

Getting information from employees has always been a delicate and controversial process. This is not because employees are unwilling to answer questions, but because confidentiality isn’t always maintained.

“We have to work very hard at maintaining employee confidentiality,” admits Morrell. “We usually survey a minimum of 20 employees in any one area, so the chances of losing confidentiality are minimised. This way, although it’s always difficult to judge honesty completely, people do give constructive criticism.”

Another reason for reticence is that employees’ opinions go unheeded, says Graeme Buckingham, senior vice-president of the Gallup Organization. “Often, companies take no action on the results of staff surveys, primarily because they find it hard working out what can be done with such a wealth of information,” he explains. “A few years ago, Gallup found that 60 per cent of companies which used staff surveys weren’t getting any response to them. The reason for the falling response rates was that employees weren’t seeing any results.

“That’s when we created the Q12 system. It consists of 12 basic questions that every employee is asked. It’s short, and the results are sent back to each line manager, who can work with his or her team to improve satisfaction. We found that high scores on the 12 questions correlated with good employee retention, customer satisfaction and higher profitability.”

Another useful tool in understanding employees’ needs is exit interviews. “Each time someone leaves the company of their own volition we conduct an exit interview,” says Treasure. “Clearly, when people are about to walk out, any fear they have had about being honest should be at its lowest point, and we hope to get some very honest feedback. We ask the employee what was good and bad about the company; what he or she enjoyed and disliked. In general we get good information on where we need to work to improve employee satisfaction. In exit interviews there are no rules, we don’t react and we don’t take any action against people – we look at the problem and decide if it needs to be dealt with.”

It can be difficult for companies to react if the results of employee satisfaction surveys and interviews are less than flattering. “Often results can shock the management,” says Morrell. “They don’t always realise how bad things are and so they react defensively. But many employers now react positively to change, figuring that it’s best if the surveys are done regularly, so satisfaction levels can be kept relatively stable.”

Executive responsibility

There are other benefits to negative feedback: a recent project for a private bank by TRBi turned up some very negative results, so the chief executive of the bank attended each presentation of the findings himself. “He answered questions from his staff at each debriefing,” says Partridge. “It was very open and positive. He explained how he was going to address the problems and this showed his staff how seriously he took the research findings.”

“If you have a company that’s prepared to work with a clear strategic framework, and ask the right questions to measure engagement from the team, you have a much higher chance of encouraging better performance,” says Gallup’s Buckingham. “One US retail company, which had trained its managers in employee satisfaction research, was improving many of the scores in its 80 stores, but scores had dropped in a few areas of the company. In the 18 stores where management wasn’t improving, profitability dropped by $250,000 (&£180,000). The stores which were scoring better were increasing profitability by $500,000 (&£360,000).”

There is no legislation in place governing the implementation of employee satisfaction research. However, the statistics show that proper implementation of the research and comprehensive follow-up is worth its weight in gold in terms of a company’s profitability.

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