The Most Important Employee Benefit

I started writing this blog back in the fall of 2010 -- about 7 years ago. How? Why?

One day, I was feeling really unhappy and I thought that writing would be a good way to take my mind off of my unhappiness. It turned out that it was. And, while I've been at it, nearly 500 posts and 200,000 hits later, I think I can say that there have been at least a few times that I have imparted some wisdom and some knowledge to at least a few people.

Along the way, there have been some side benefits as well. I've made a few LinkedIn contacts, gotten some Twitter followers, and even developed some business from my blogging. But, the biggest benefit of all has come every day.

What's that? Since the day that I made my first post, not a single day has gone by without at least one person asking me what is the single most important benefit to provide to employees.

That's pretty cool, isn't it? Actually, it would be if it were true. But, the fact is that I don't think that anyone has ever asked me that question. However, because I write this blog, I get to address that question now.

As I said, back in the fall of 2010, I was pretty unhappy at work. Before then, I had worked for a firm that I thought was great. We were creative. We were thinkers. We were innovators. We worked together. And, then we were sold. But, in the new firm, a lot of that remained -- not all of it, but a lot of it to the extent that we could figure out how to fit that culture in. And, then we were sold again.

And, it all went away. Every last drop of it went away, at least for me it did and based on conversations and behaviors, I feel pretty certain that many of my long-time colleagues felt the same way.

We'd lost our best benefit. And, that benefit could have been provided to us at no cost. That's sad, isn't it?

In fact, not only could that benefit have been provided to us at no cost, it would have produced large amounts of additional revenue for our employer or for any employer that chose to provide it to us.

If my cryptic ways have confused you here, you could be wondering. What benefit has no cost, but provides revenue to the employer providing it? It's not your health plan. It's not a 401(k) or a pension. It's not even vacation time or flex hours. But, as the way we work has moved from a 1980s environment when I entered this profession to a 2017 environment, this benefit has become even more important.

It causes people who receive it to work harder, to work smarter, and to work longer hours. It causes them to collaborate more. It causes them to give that extra little bit. It causes them to embrace the company brand even if they can't identify exactly what that brand is. And, it's far more important in 2017 than it was in 1985.

I think back to my work world in 1985. I arrived early. I could get breakfast in the office. I ate lunch with my colleagues. My employer provided that lunch. After lunch, we would all walk around the campus. Yes, it was a ritual and we all looked forward to those 5 or 10 minutes. And, then we would all go back to work and work hard.

Today, in 2017, those opportunities are largely gone. Many people don't work in the company office. They often work from home. Nobody provides them breakfast or lunch. They don't eat with their colleagues and they certainly don't walk with their colleagues. In many cases, other than via email, maybe telephone, and perhaps instant messaging and social media, they don't even know their colleagues.

That all makes one benefit harder to provide, but more important than ever.

Okay, for all those of you (maybe there are two or three who have gotten this far, but haven't figured out where I am going), that most important employee benefit is engagement. Yes, it's free to provide and, in fact, it's quite costly to not provide. But especially in 2017, it's not so easy.

How do we engage our employees in 2017? We have to make sure that they have interesting work. We have to make sure that they have a future. We have to take an interest in them. We have to show them a path forward. In short, we have to talk to them. And, far more important, we have to listen to them.

Listening to them doesn't mean that we do everything that they ask, but it does mean that we should think about what they say. The best idea may come from the recent college graduate who (paraphrasing the late Robert F. Kennedy) may choose not to ask why, but to ask why not. The solution may come from the analyst who is not burdened by rules that she hasn't learned yet, but finds an answer that we discover fits within those rules.

So, why am I writing about this now? This morning, I had two reasons. One is that I am very pleased to be employed by a firm called October Three that does seem to do a good job of engaging its employees. I find that I am working harder and I am working pretty intelligently. And, our employees from bottom to top are finding solutions for our clients that are creative and unique.

The second one is that next week, I will have the honor of becoming President of the Conference of Consulting Actuaries. The pay will be low (zero) and the hours will be longer than you might imagine, but if we get it right, the rewards will be significant. As the head of a membership organization that is voluntary for likely every one of its members, I want to engage that membership. In a perfect world, I'd like for every one of those members to feel like this is their organization. I want them to be part of the organization and to seek more and more ways to be part of it because I want them to be fully engaged.

Hopefully, I'll remember to practice what I preach.

Change. Change, Change. Change From Fools

A friend of mine changed jobs recently. You probably have a friend who has changed jobs recently as well, whether it be by choice, or by job elimination. In my case, I asked him about it. I wanted to understand the motivation. I learned that, at least in his situation, there were lots of motivating factors. Some are uncontrollable. For example, if your company is in an industry that is harder hit by the bad economy, well stuff happens. Others are controllable. In this post, I want to focus on them.

Can you imagine working for a firm where in your entire career there, you never receive a communication that is truly about your career development? Contrast that with a firm where after you accept an offer, but before you start, you are already getting career development e-mails. What is the marginal cost of doing this? I am going to guess that on a multi-billion dollar balance sheet, the cost doesn't even affect the rounding. What is the benefit of doing this? The improved morale that comes from this sort of corporate behavior will increase productivity to the point where the income statement is materially improved.

Can you imagine working for a firm where press releases are primarily about the organizations that you sponsor? Contrast that with a firm where press releases are about your clients' or customers' successes from the work that your firm does for them or the products that your firm produces for them. As an employee, which would make you feel more proud of the company you work for? Which would make you feel more proud of the work that you do?

Can you imagine working for a firm where during your entire career there, to your product line leader, you are nothing more than a name or a number, and they are not sure exactly who you are or what you do? Contrast that with a firm where your product line leader takes a personal interest in you during your first couple of weeks. And, at this firm, it's not because you are being treated differently, that's just the way she chooses to operate. Which firm will get more out of you?

So, at this point, I've discussed three issues. Between the three, I don't think there is enough there in hard costs to change the rounding in the balance sheet or the income statement. But, the benefits fo doing so, on the other hand, appear to be enormous.

The working world has changed. Management used to have far more intuition to it and perhaps fewer metrics. Before the computer age that we are in now, we just didn't have so many metrics at our fingertips. It was harder to measure the micro effect of each action that we took, to we didn't. We looked instead at macro effects of a pattern of behavior.

I remember, at my first real job (actually this happened in some of my consulting jobs, but my observation is that this behavior had stopped at lager firms by the mid-90s), each employee, on their first day on the job, got introduced around. It was part of a pattern of creating a team-oriented work environment. Sure, it took a little bit of productivity on that day away from both me and the person showing me around, but I think it was more than made up for. But, in today's world of micro metrics, there is a cost to an experienced person introducing a junior person around, so it just doesn't happen.

We used to celebrate successes together. But, the celebration, measured on a micro basis has a cost with no benefit. Now, at some firms, unless you are an executive, you don't even find out about the successes.

Perhaps I am the one who is wrong. I don't think so.

Change. Change, Change. Change From Fools

A friend of mine changed jobs recently. You probably have a friend who has changed jobs recently as well, whether it be by choice, or by job elimination. In my case, I asked him about it. I wanted to understand the motivation. I learned that, at least in his situation, there were lots of motivating factors. Some are uncontrollable. For example, if your company is in an industry that is harder hit by the bad economy, well stuff happens. Others are controllable. In this post, I want to focus on them.

Can you imagine working for a firm where in your entire career there, you never receive a communication that is truly about your career development? Contrast that with a firm where after you accept an offer, but before you start, you are already getting career development e-mails. What is the marginal cost of doing this? I am going to guess that on a multi-billion dollar balance sheet, the cost doesn't even affect the rounding. What is the benefit of doing this? The improved morale that comes from this sort of corporate behavior will increase productivity to the point where the income statement is materially improved.

Can you imagine working for a firm where press releases are primarily about the organizations that you sponsor? Contrast that with a firm where press releases are about your clients' or customers' successes from the work that your firm does for them or the products that your firm produces for them. As an employee, which would make you feel more proud of the company you work for? Which would make you feel more proud of the work that you do?

Can you imagine working for a firm where during your entire career there, to your product line leader, you are nothing more than a name or a number, and they are not sure exactly who you are or what you do? Contrast that with a firm where your product line leader takes a personal interest in you during your first couple of weeks. And, at this firm, it's not because you are being treated differently, that's just the way she chooses to operate. Which firm will get more out of you?

So, at this point, I've discussed three issues. Between the three, I don't think there is enough there in hard costs to change the rounding in the balance sheet or the income statement. But, the benefits fo doing so, on the other hand, appear to be enormous.

The working world has changed. Management used to have far more intuition to it and perhaps fewer metrics. Before the computer age that we are in now, we just didn't have so many metrics at our fingertips. It was harder to measure the micro effect of each action that we took, to we didn't. We looked instead at macro effects of a pattern of behavior.

I remember, at my first real job (actually this happened in some of my consulting jobs, but my observation is that this behavior had stopped at lager firms by the mid-90s), each employee, on their first day on the job, got introduced around. It was part of a pattern of creating a team-oriented work environment. Sure, it took a little bit of productivity on that day away from both me and the person showing me around, but I think it was more than made up for. But, in today's world of micro metrics, there is a cost to an experienced person introducing a junior person around, so it just doesn't happen.

We used to celebrate successes together. But, the celebration, measured on a micro basis has a cost with no benefit. Now, at some firms, unless you are an executive, you don't even find out about the successes.

Perhaps I am the one who is wrong. I don't think so.

What do Employees Really Want?

In a newly published research report by WorldAtWork, Dow Scott (Loyola University Chicago) and Tom McMullen and Mark Royal (both Hay Group), the authors pointed out that the five top concerns in reward fairness are these:

• Career development opportunities
• Merit increases
• Base pay amounts
• Non-financial recognition
• Employee development/training

I don't mean to denigrate the authors, because frankly, this report is well thought out and well done, but duh! 

People don't want to be rewarded for what their managers think is their potential. And, they certainly don't want to be locked into, say, a Tier 5 job (assume larger number is better) because they are too valuable in that role when they are capable of handling a Tier 8 role.

My anecdotal evidence suggests that far too many managers don't get this. Further, my anecdotal evidence suggests that most of those managers do not care if they get it or not. People don't become managers, for the most part, in today's world because they have any managerial aptitude. They become managers because les levres se recontrent le derriere. If you can't work that out, levres are lips and recontrez is a verb meaning to meet. I'll leave the rest to you.

Let's consider those items one at a time and see where they have gone recently.

• Career development opportunities. Many companies have hit promotional gridlock. As the massive generation of baby boomers has reached levels that are all too cluttered, there is currently frighteningly little room for anyone to move up. So, the way to promotion is through finding a new employer.
• Merit increases. Is this an obsolete term? So many companies have had near zero merit budgets for so long that I fear that this term may disappear from the lexicon.
• Base pay amounts. They are not what they used to be. Again, companies have learned that if they put a bigger percentage of compensation into incentive pay and less into base pay that employees do not get the positive effects of compounding for having multiple good years in a row. In many cases (some that I have observed first-hand), it means that new hires (whether entry-level or mid-career) are paid for more in base pay than their peer group who has been around for a while.
• Non-financial recognition. Say what? Today's managers don't seem to understand the value of an attaboy or even a thank you. Saying that a job was well done takes far too much time, apparently. 
• Employee development/training. Twenty-five years ago, companies spent large amounts of money developing their employees. They had budgets that included travel. They believed in the value of face-to-face interaction. I understand that e-learning and interactive learning save immediate dollars, but how do you replace the increase in value that comes from the best training and development opportunities? Answer: you don't!

You know what, I stand corrected. I shouldn't have even suggested denigration of the authors. They make some great points. And, it seems that what to me was 'duh' would actually be an awakening for a whole bunch of employers.

Employee Engagement Low -- No Surprise To Most

I read the results of another study today that said that levels of employee engagement are low. Do the authors expect their readers to be surprised? While there are notable exceptions out there, most companies do not appear to value individual employees. And, from my vantage point, the productivity of those disengaged employees is not particularly high.

Once upon a time in a faraway land called the United States of the 1960s, things looked more like this:

• You worked for a company. If you had an hourly-paid job, you worked 40 hours per week and sometimes a little more. If you had a salary-paid job, you probably worked 45-50 hours per week.
• If you were over the age of 30, this was likely the same company you had worked for when you were 25.
• You may have had a manager who was asked to manage people. His manager title was not there to be a smokescreen.
• You didn't get a wide variety of employee benefits. In fact, what you often did get was some vacation time, some sick time, some employer-paid health care, and a pension or profit-sharing plan.
• If you did a good job, you got an annual pay raise that exceeded the increase in the cost of living.
• Some day, you would retire from that same company and live a happy retirement.
• You didn't spend your entire working lifetime worrying about when you would get laid off and how you would ever be able to retire.

Things sure have changed. In many respects, they are better. But, in some key respects, they are not. When employee engagement gets too low, the quality of goods and services declines. You know what, the successful companies understand this.

I spoke a couple of weeks ago to someone in an account management/sales role at a large consulting firm. They lamented to me that they hated their job because they were only going to be compensated well if they mis-served their clients. I was curious about this and pressed for an explanation. What I heard was a bit bothersome. Their firm had about 20 new services. The person I was talking to said that nobody had explained any of these new services to them. But, their incentive payout was not going to be at target (or higher) unless they could sell at least 5 of these new services to each of their clients. It didn't matter if the clients needed them or even if they were good for the clients. It didn't matter that they might be expanding the depth of those client relationships in other ways. It didn't matter if trying to sell those services aggravated this person's good clients.

So, what did this person tell me. They are looking for a new job. Until they have one, they are just going through the motions. Their clients now really dislike this consulting firm that they have worked with for many years.

Look what can happen when you have employees with all-time low levels of engagement. Think about it.

Employee Recognition

I found this page using Stumbleupon. Here is a link: http://www.stumbleupon.com/su/2Kw18y/www.washington.edu/admin/hr/roles/mgr/ee-recognition/award-ideas

It gives a laundry list of ideas for employee recognition. Why is this important? In these days of decreased benefits, lower pay, no bonuses and higher unemployment, employee morale is low. Search the internet. You can find survey upon survey that will confirm that employee morale is as low as it has been in years.

Perhaps your company doesn't have the money to spend to increase morale. The tips in this article are low cost or no cost. I don't agree with all of them, but plenty look good to me.

Check it out.