And it is as simple as that. It is easy to espouse quick solutions to problems but as with sound bytes and bumper stickers there is always much more complexity involved than you are led to believe.
Even so, people continue to look for simple answers because, let’s face it – complicated is hard. Simple is quick – and we all want to get things over with and move on, or just go with something without having to think too much about it. It is unfortunate that many business decisions get made this way yet today.
I recently ran across a restatement of what employees say inspires them most about companies, and also a study of what company CEO’s and others say is missing when it comes to business progress and success. Neither of these reports focused on simple, quick answers. Success in these areas requires continuous attention to details, concentration on longer-term goals and in some instances targeting different approaches to get the outcomes most desired.
Take pay for example
A recent “total rewards” presentation pointed out once again (but with renewed emphasis in a recovering economy) the importance of intrinsic rewards in work. People don’t work just for a paycheck.
Granted there are still too many individuals looking for jobs and just any kind of paycheck, but an increasing number of others are inspired and motivated by:
- The types of products companies produce and what they do
- A company’s reputation as an employer and how socially responsible it is
- Opportunities as an employee to be trained, developed and grow
- Being valued and told so by their bosses
Companies that are serious about retaining and attracting top talent are also serious about what inspires people and motivates excellence. That is about company culture created intentionally, which takes time and conscious effort.
The impact of non-financial assets
WorldatWork last year reported on international research conducted by the American Institute of CPA’s and the Chartered Institute of Management Accountants in which 75 percent of the more than 300 CEO’s responding from 21 countries suggested that more emphasis should be placed on measuring the value of non-financial assets in businesses.
The CEO’s said customers and employees contribute most to the value of a company and that it is intellectual capital and customer relationships that are most key to growing sustainable businesses. Most felt investor and shareholder demands are inconsistent with this and that financial reporting systems focus excessively on short-term rewards. (And these were CEO’s responding.)
Financial analysts are becoming more attuned to this as well and companies are beginning to turn to their financial organizations to figure out how to report on areas that boost the returns on developing intellectual capital and customer relationships. Don’t miss the fact that HR has a significant role to play to help define and implement what it takes to get positive employee contributions in these areas.
Entirely new areas of measurement
While job candidates and current employees continue to place ever-increasing importance on a company’s social responsibility track record, another level of financial analysis is beginning to build looking at companies’ initiatives in the arenas of environmental, social, and governance or ESG.
Though to its proponents ESG is less about social responsibility than profits, if a company has employee centric policies it should have less turnover and lower HR costs. As an example, if a manufacturer is serious about the safety of its employees at work, it can avoid significant costs related to illness, injury and the loss of time and productivity, as well as potentially expensive lawsuits.
More investment portfolio managers are beginning to believe that companies with ESG goals, objectives and published results represent forward thinking, well-managed and productive places where investors should invest. The most active area analyzed is “environmental” because the impact is easy to quantify – i.e. carbon emissions – but employee centric programs and inspiring, intentional leadership are on the radar as well.
Attracting and retaining a talented workforce means building a culture that is itself attractive. There are multiple reasons why people come to work and stay, thrive and contribute. Some of those reasons will be totally unique to your business while others your competitors can also provide. Find out what the differentiators are for you. Ask the people who work for you what is important to them and listen. Remember it is not just about the money.
Developing intellectual capital and strong customer relationships come from your best and brightest staying and developing expertise and long-term connections to customers (internal and external). Sustainability, competitiveness, customer loyalty and repeat business follow – better defined as success.
It also is worth noting that the results of good leadership, productive work cultures and positive employee centric practices and policies make a difference in a company’s financial performance, and investment analysts are paying attention to it in public companies. Private companies should take heed as well.
The long view reveals that all of these elements must work together to ultimately appreciate what is possible. Focusing on only one and expecting broad business success would be extremely short sighted. As I said before and will say again — there are no simple answers and working these types of issues takes time. Understanding what the issues are however, and integrating multiple approaches to achieving positive outcomes are what strategic HR is all about.
If you need the best and brightest HR talent to help support your success in these areas, contact us. We have been connecting organizations and HR talent since 1989 — at all levels and in all HR disciplines. Let’s discover together how we also may be able to support your own HR career goals.