Since the financial crisis several years ago, sharper contrast has been cast on performance and productivity in the financial services sector. The industry is trending towards leaner workforces, longer hours and higher performance objectives.
I think “engaging” with employees, finding out what they want out of work, actually helps improve productivity and helps retain the best people. But don’t just take my word for it. Aon Hewitt’s insightful study, 2013 Trends in Global Employee Engagement, explains:
“Companies require steadfast motivation and productivity in this constrained environment. At the same time, dynamic employee trends are changing the nature of what employees demand in exchange for their discretionary effort. Striving to maintain a higher level of employee engagement not only contributes toward short-term survival during economic volatility, but also is a key factor for longer-term business performance and better positioning when market conditions become favourable.”
Thousands of articles and studies have examined the relationship between employee engagement and positive business outcomes, but one of my favourites is the meta analysis conducted by James Hunter and Frank Schmidt in 2002. They examined performance in nearly 8,000 business units across 36 large US companies and found a demonstrable correlation between genuine employee engagement and just about every measure of performance output – most significantly, profit.
In the authors’ words: “We conclude from this study that employee satisfaction and engagement are related to meaningful business outcomes at a magnitude that is important to many organisations and that these correlations generalise across companies”.
It’s a fascinating study, worth reading if you’re an aspiring or current manager, because it provides evidence of the specific traits in managers that produce the best results. Many of these traits can be taught or learnt.
We all know that happy employees produce better results: they want to contribute more, they encourage others around them, and they’re more focused on their jobs. Apart from the fact this is intuitive, studies have explored this subject since the mid-1970s and almost all reached the same conclusion as Hunter and Schmidt.
The puzzle to me is why the financial services firms struggle to seize the opportunity of increased flexibility, increased dynamism and respect for individuality within their workforces.
The opportunity exists in the financial services sector to create a more diverse employment base to suit the variety of skills and behaviours this sector craves. The productivity conversation must transcend the traditional monochrome slave-and-master discussion we’ve had for the last three centuries. Imagine a business where managers empower their employees to discuss their needs and where the measures of performance and success are different for everyone.
Why don’t we consider some of the following ideas which might invert the discussion from “how can I keep my employees engaged?” to “what do my employees need to be engaged?”:
1) Formalised coaching and mentoring relationships.
2) A range of flexible work arrangements with genuine interest in job-sharing, working from home, time off in lieu, and a genuine understanding of effort.
3) Improved flexibility in training availability and allowances to keep people developing – whether it’s work related or learning how to cross-stitch.
4) A day off every birthday, over and above annual leave entitlements.
5) Personal technology allowances.
6) Financial and operational support around childcare.
These ideas sound utopian I know, but that’s not a bad place to start. They also require effort and integrity from both employers and employees, but if we can get it right, there are a multitude of benefits available to us. Perhaps it’s time for some idealism to return to the financial services sector.
Toby Aikins is a director, analytic talent, at the Melbourne-based consultancy, Connected Analytics.