Leveraging your workplace for employee benefit
Managing Director, Adam Sargent, recently presented at the South African Rewards Association's 2017 Annual Conference in Johannesburg. The focus of the presentation was on how to leverage your workplace for employee benefit.
Fewer jobs, more applicants. Unfortunately for employers, despite the number of applicants for positions, there is a severe lack of highly-skilled and adequately experienced prospective employees. This global talent shortage has resulted in attraction and retention becoming considerably more competitive amongst companies. Employers are increasingly re-inventing their human resource techniques, as well as re-looking at the effectiveness of the work environment housing this talent. Extensive research is drawing a progressively vivid link between the physical workspace and the users of this space, and demonstrating how companies can leverage the former to unlock substantial benefit.
The global talent shortage creates an employment market advantageous to highly-skilled employees; these human resources are valuable, and aware of it. To attract this talent is only half the challenge for companies – the other half is retaining these resources and ensuring they remain highly engaged and high-performing. Statistics show exactly this challenge; with 85% of employees either actively of passively looking for new employment, and 87% of staff disengaged. Too many companies are eroding value and money through the inability to effectively attract and retain quality employees, and this combined with chronic levels of staff disengagement is yielding low satisfaction and productivity. With engagement and human resource management at the forefront of the collective global executive mind, its critical we understand the problem and its root causes in order to solve for it.
The majority of companies are responding to the employee engagement crisis with a dated approach; compensation and financial benefits. However, recent studies have found that over half of employees would choose to work for a company which cared about employee wellbeing versus one which paid them 10% more. Despite compensation remaining a key factor to employees, pay is found to be a hygiene factor not an engagement factor, and that typically, increasing compensation does not directly increase employee engagement. Therefore, most companies’ efforts to improve employee engagement purely through financial benefits are seeing diminishing returns.
Numerous studies link five common factors to employee engagement; participation in meaningful work, hands-on management, opportunity for growth, trust in leadership, and finally all within an overall positive work environment. The workplace is generally the physical environment in which employees are based throughout a day’s work, and this space greatly impacts their mindset and ways of working. It is not surprising, therefore, that research has identified a strong correlation between satisfaction with the workplace and employee engagement. Smart workplace strategy is proving a key factor in the efficiency of business operations and the performance and wellbeing of employees.
Research proves that happy, healthy and engaged employees produce more and cost less. An organisation’s workplaces, processes and practices comprise an ecosystem with the potential to enhance employee wellbeing and optimise performance. Designing workplaces which take a holistic approach to employee wellbeing requires consideration of a combination of cognitive, physical and emotional factors. A successful workplace requires the development of an environment in which employee needs are fostered, in order to ultimately drive wellbeing and engagement. Companies are often distracted by the apparent easy performance levers, such as financial compensation, however, research demonstrates that these methods are trumped by employee preference for satisfying work environments.
The physical workplace should result in employees moving more throughout the day and facilitate healthy posture and ergonomics, which heightens employee energy and comfort levels. Emotionally, the workplace should cater to human and organisational needs for socialisation and collaboration which enhances inter-personal and company relationships. There are major and well-researched business benefits linked to improved collaboration and communication between employees. The last aspect, cognitive wellbeing, speaks to the ability of employees to focus on tasks, concentrate easily, and think creatively in the workplace, and this too is heavily influenced by physical design.
In developing workplace strategy, companies need to take a holistic approach which is focused specifically on their own, unique organisational and employee characteristics. There is no one-size-fits-all approach to workplaces, even for companies within the same industry or who attract similar human resources – each organisation is differentiated through its vision, culture, processes and ways of working. What works for a highly creative, collaborative and informal company will not provide the benefits to a workforce requiring more formal, quieter space with individual focus areas. To ensure optimal value and return on investment for any organisation, the formulation of the real-estate and workplace strategies should be highly integrated with long-term business and people strategies.
By adopting a considered and people-centric real estate strategy, companies can unlock direct financial benefits through the optimised and efficient use of space, which is fit for purpose and future-proofed. Where the true value in corporate real estate strategies lies is in its ability to drive a multiplier value effect to the company through its positive impact on employees. The vastly improved employee health and wellbeing resulting from a well-designed workplace leads to higher employee engagement levels and job satisfaction. In return, the company becomes an employer of choice, sees the benefits of more productive staff, and reduces their direct investment in attraction and retention. Employers, through benefitting their human resources, have the potential to leverage major value from optimal corporate real estate investment.
This is reflected in recent global trends where some organisations are functionally merging their human resource and real estate services teams. This drive to better link human resource activities with strategic corporate real estate services is due to recognition of the challenges facing both and a desire to improve results. Companies such as Adobe, Facebook and Skansa have all taken such steps. A key example is also AirBnB, whose CHRO recently became their Chief Employee Experience Officer responsible for a single-minded mission to drive ‘workplace as an experience’. Their responsibilities range from typical HR functions such as recruiting, talent management and development, HR operations and total rewards – but all aspects of the workplace experience – facilities, food and a range of resources who bring the AirBnB culture to life through workplace environments, internal communications, as well as employee events, celebration, and recognition.
While we feel that the step of merging the functions is more of a trend than a necessity, we are witnessing fundamental shifts into the future the working environment and new management models. We are firmly in the era of the “workplace as an experience” where all the elements —the physical, the emotional, the cognitive, the virtual, and the aspirational—are carefully orchestrated to inspire employees.
Get in touch with us to learn more.