In an exclusive extract from his new book, Fairness For All, former Waitrose boss and trade minister Mark Price talks about how happy and secure employees are good for business.
Highly engaged employees get results with energy, passion and purpose. They stick around longer, engage with customers with more enthusiasm and execute their daily tasks more reliably. They are your hidden weapon when it comes to growth in tough times because they hold the key to a more positive customer experience and improved productivity.
Employee engagement is not a ‘soft’ option. It is a hard business metric that has a measurable impact on the bottom line.
Engaged employees trust their organization to do its best by them and vice versa. It is a two-way process, as illustrated by the following case study.
In recent years, Waitrose moved its shop operations from a department-based approach to work content.
This meant, for example, that instead of having seven separate departments planning replenishment there would be just one.
This resulted in a significant reduction in management numbers to align with the new strategy.
Partners were given careful explanations of what was happening and why, and the advantages expected to be achieved with the new structure.
This was coupled with a detailed presentation of the growth plan and Partners were invited to comment and contribute.
Because of the measured way it was done, with extensive trials and feedback, the process took nearly three years, but at the end of this time just five out of the five thousand managers who were potentially affected left the business, and it was possible to redistribute this valuable resource elsewhere in the company.
Contrast this outcome with the experience of another major retailer. This publicly traded organisation also decided upon a strategy that would see the removal of an entire tier of store managers. Their approach was very different though.
An announcement was made to the stock market that the jobs of a number of store managers were to be ‘redefined’ and redundancies were anticipated.
Within six months, two thousand out of five thousand managers in this tier had left the business.
The chances are that the most competent workers would have dusted off their CVs and moved on within days of the announcement.
Either way, this organisation lost two fifths of its talented and trained workforce with barely a backwards glance. Between them these employees had thousands of hours of experience and knowledge.
Meanwhile, rebuilding trust and motivation with those left behind cannot have been an easy job.
As the case study demonstrates, to get the best out of people, a business needs to show them as much commitment as they expect them to give in return. Trust and shared responsibility are the keys to success.
There has never been a better time to focus on employee engagement because our workforces face threats from a number of sources.
The structure of the employer/employee relationship has changed dramatically over the past few years. While ‘jobs for life’ were consigned by many to the history books a long time ago, we have seen a further significant shift in the other direction.
“Perhaps we should reflect again on what is so wrong with the notion of a ‘job for life’? Would a commitment by employers to retrain and reskill lead to a more confident and secure workforce and society?”
Zero-hours contracts, subcontracting, temporary contracts, part-time agreements: non standard employment, such as that offered by Uber, is the new standard and this makes two-way communication a challenge.
Firms have become ever more inventive in ways to create flexibility for themselves while weakening the opportunity for workers to be engaged in creating mutual success. Some large companies, as well as numerous start-ups, have fully embraced subcontracting as the perfect way to get labour on demand.
The argument goes that it is great for workers too because they benefit from fantastic job flexibility and can build their job around personal schedules. In some cases this is true.
However, the other way of looking at it is that workers have dramatically less power in these flexible arrangements – it can be extremely stressful and play havoc with family budgets.
How can these arrangements lead to workers feeling engaged and involved in a company’s success? How can your thoughts and ideas on improving something be garnered if you don’t even know when you will be working next?
And consider for a moment the impact on society as more people feel less connected and engaged with their employer and its role in their community. Perhaps we should reflect again on what is so wrong with the notion of a ‘job for life’? Would a commitment by employers to retrain and reskill lead to a more confident and secure workforce and society?
“Individuals don’t receive the training and support they need, so they move on. Everyone is in a weaker position because of it”
There are, of course, further contemporary challenges.
Technology is transforming the way we work. Computer automation of routine tasks means a single worker can now do the work that used to be done by dozens. The work is usually highly skilled and the government anticipates growth in highly skilled, white-collar occupations and further job losses for both skilled and semi-skilled manual roles and administrative, clerical and secretarial jobs.
You are five times more likely to have your job replaced by automation if you earn less than £30,000 than if you earn more than £100,000. Changes to the job market such as this, coupled with increasing turnover of employees, reduce the incentive for firms to invest in their employees. This too will have an effect on productivity.
In the UK, the proportion of workers enrolled in education, or receiving training, fell by 3.8% from 2010 to 2013, which is one of the biggest drops in Europe.
Firms expect relationships with workers to be shorter because well-trained workers will be in demand and quickly move on.
“This doesn’t mean communism, or giving up on the profit model altogether. The John Lewis Partnership is a consistently profitable organisation and has been for many years”
The net result becomes a self-fulfilling prophecy: individuals don’t receive the training and support they need, so they move on. Everyone is in a weaker position because of it.
All of these trends push corporate companies into ever more short-term working practices.
Meanwhile, productivity is under constant threat at a time when high employment and stagnating wages mean rates of output are more important than ever before.
If we wish to enjoy increased economic growth as a country, we need to focus on increasing output per worker. Higher productivity will play a major role in strengthening public finances.
If we don’t achieve this goal, the alternative is further damaging cuts to public spending and investment.
All the signs are that we need to turn the traditional business model on its head.
”Employee engagement is about establishing a mutual respect between employer and employee, which will equally serve all and make the business more profitable in many different ways”
This doesn’t mean communism, or giving up on the profit model altogether. The John Lewis Partnership is a consistently profitable organisation and has been for many years.
The difference is one of focus: on the happiness of employees, which means thinking deeply about their continued employment through retraining and redeployment, and on taking the long-term view, which translates into a stronger business that generates sustainable and sufficient profits.
Employee engagement is about establishing a mutual respect between employer and employee, which will equally serve all and make the business more profitable in many different ways.
“Firms that put their employees first will get a better result, both for themselves and the wider economy”
Even a small shift in focus will make a difference. At present, just 13% of global workers say they are engaged in their jobs, which leaves a lot of room for improvement.
We have an opportunity to better utilise our human potential.
For many, this will entail a shift to a new way of thinking, but firms that put their employees first will get a better result, both for themselves and the wider economy.
It is not only perfectly possible to have huge commercial success if you focus on people first, it is a proven strategy to improve customer satisfaction and loyalty.