By Barry Anderson.
In a fiercely competitive worldwide employment market, where do Australian HR departments sit? We know which HR policies contribute to attracting and retaining the best and brightest in their respective markets, so we must acknowledge that some HR policies deliver more than others.
This article summarises the latest piece of research completed in a program that has run for over 20 years across Europe and in South Africa as part of the Top Employers program. It covers organisations in the United Kingdom, Poland, Belgium, Switzerland, Germany, the Netherlands, Italy, France and Spain, and was done in 2011 when the current economic uncertainty was firmly entrenched.
Australian and New Zealand HR departments face some challenges that are certain to become more difficult. First, more existing employees are approaching retirement. The replacement of people, skills, and the knowledge embedded in their psyches will rigorously exercise the minds of HR staff over the next 10 years. Next, those joining the workforce for the first time have a very different view on what loyalty means. Often younger employees will quit a job simply because they fancy a change.
Furthermore, the internet means that everyone is connected. The exchange of ideas and information, from the incidental to the fundamental, rewrites the recruitment rulebook. Everyone, in principle, knows everything – including what is on offer elsewhere. Finally, competition is worldwide. With markets and economic powerhouses changing almost every month, employees now consider overseas employment more readily than ever. If the future jobs are in China, Eastern Europe or Africa, that is where talent will go. This means that recruiters will need to work harder in order to keep the talent in the country.
Companies that apply the right policies that promote employee performance and deliver real flexibility, and which HR departments can clearly communicate, attract and retain employees more readily and for a much longer period of time. So, which HR policies work, and how do these correlate with employee retention?
Engagement Means Communication
The most successful companies in Europe communicate the fact that they talk to their employees, and back that claim up with actions that they deliver and measure. The results, including the ones that missed their mark, are communicated to employees. This process involves commitment, action, management and corporate accountability, and the communication is what binds this process. In some cases, management bonuses are equally based on results, evaluation and communication.
Reducing Staff Turnover
Clear and concise communication that runs in both directions can have a significant impact on reducing staff turnover. Allow your employees to speak freely and express their feelings towards different ideas and situations. Facts quickly translate into intelligence that can be acted on.
In Europe, the top five reasons for resigning are: unfulfilled career aspirations, a lack of rewards and salary rises, location, the balance between work and home life, and recognition. These reasons are not unusual, however, many organisations do not seem to understand or acknowledge them.
Corporate Social Responsibility
Corporate social responsibility (CSR) is mandated in some European countries (such as the UK) in a way that is not replicated in Australia and New Zealand.
Companies that make CSR more than lip service will often find that they have staff who are devoted to the task of managing CSR, developing a CSR vision, and making these plans a reality. At the heart of the most successful CSR programs are those in which employees play an active role. This model can be transferred to any corporate or HR policy.
Having a CSR strategy has less resonance and relevance in Australia and New Zealand but that will soon change. Observing the European experience gives local companies an idea of the positive consequences of a well-managed and well-executed CSR strategy.
To raise internal succession rates (thereby retaining top performers and steady performers) top employers should define and communicate clear career paths for their employees and continue to measure their efforts and results. Continual measurement will mean that good intentions can then turn into effective actions.
Diversity means different things in Europe, Australia and New Zealand. In Europe, 71 per cent of companies regard diversity as a priority and have created HR policies accordingly.
If your organisation wants to be truly diverse, it has to have a real diversity policy built on clear goals, responsibilities that are assigned to individuals, and a range of initiatives that are implemented and measured.
Surprisingly, at the time that the research was undertaken, European companies had a greater level of confidence about the economic conditions in which they operated compared to 2010. A larger number of European counterparts expected that their individual organisations would grow by five per cent or more during the next three years.
This strikes a confident note that cuts across a lot of market and media reports on the state of the European economy. At the heart of this confidence appears to be a sense of certainty about human resource management, especially the retention of employees.
To avoid employee shortages in the short-term, employers should create formal statements about what the organisation offers to its staff, match these to as many employee segments as possible, understand the fit between an individual’s needs and those of the organisation, and develop a plan to manage employee needs and rewards over a three-year period.
Organisations with these policies have fewer employee shortages because they are proactively managing their resources and resource fluctuations.
If you want to offer a competitive suite of secondary benefits, you should let the employees choose them. Employers can then offer the maximum range of benefits without having to offer everything to everyone. Working from home is becoming increasingly more common across Europe and Australia and it is offered by as many as 96 per cent of the British companies and 98 per cent of the Dutch companies researched. This option works best as part of a fully flexible working solution.
European Top Employers deploy sophisticated prevention and support policies to manage absenteeism, with policies covering stress management, executive burn-out recovery and in-house medical support. This provides evidence that organisations that actively manage what causes absenteeism are rewarded with declining rates of absenteeism.
Training And Development
HR policies that transform employees’ insights into development opportunities, and then integrate these developments into the broader organisational needs, deliver an advantage.
You should always measure the success of development programs at both an individual and organisational level. Too many organisations cultivate the single-minded furrow of a development policy that fits only the organisation.
Participation in development and training goes up markedly in many European companies because the managers’ bonuses are linked to employee participation. Development also works best when it is continuous rather than discrete. When management supports the HR policy by discussing staff development with each employee individually, the results improve even further.
Understanding which HR policies work best for your organisation is the first step in making them systematic, sustainable and scalable. Comparing HR policies objectively with policies from around the world equips HR teams with the information they need to attract and retain the talent they want on their own terms.
This combination of a patchy recruitment market, economic uncertainty, the internet, exciting new opportunities in far-flung parts of the world, and changing generational attitudes create a heady brew for HR directors to ingest.
Barry Anderson is General Manager of Top Employers Australia, an initiative of the CRF Institute. You can contact Barry via www.topemployersaustralia.com.