Businesses are said to achieve a competitive advantage when they simultaneously have resources that are valuable, unique and difficult to imitate (Somaya & Williamson 2008).  Value in this context pertains to reducing consumer uncertainty by delivering what you promise them.  Porter (1998 p.3) suggests that a business’ competitive advantage can be enhanced through increases in value created for customers.  Uniqueness refers to a point of distinction or difference that your business can claim and own, aside from your competitors.  Due to the dynamics of people, your employees are a business resource that is very difficult to copy or replicate.  An engaged sales force for example is a product of your culture and work environment.

As engagement is critical to achieving this competitive advantage, let’s clarify the term ‘engagement’.    When you engage, you actively choose to involve yourself in or to something.  Volunteers for the Red Cross, for example make a choice to involve themselves to the cause of providing for the homeless and poor.  In the employee engagement context, this refers to the choice to be involved through employment (also a form of engagement) towards the vision of a business be it delivering a good or service i.e. Airlines delivering airline travel experiences.  It is this cognitive agreement, alignment and motivation to work towards the vision that is at the heart of employee engagement (Luthans & Peterson 2002).

Employees are a critical interface that interacts with buyers and consumers.  This interface serves also as the point of value exchange between your business and consumer.  Logically if you are an airline promising superior customer service (i.e. Singapore Airlines), consumer uncertainty is reduced when at both check-in counters, boarding and in-flight they are met with employees embodying sincere, efficient, intuitive and quality customer service.  Through each of these consumer touch-points, engaged employees deliver value to consumers, fulfilling their service expectations.  Such consistency in customer service can only be delivered by Singapore Airlines aligning and engaging their employees with their company values.

It is your employees that will set you apart from your competitors, and airlines such as Singapore Airlines and Virgin Australia are a great case example of using employee engagement to enhance competitive advantage.  Virgin Blue distinguishes itself apart from its competitors through its cheeky jargons and more importantly its corporate value set being value for money, quality, fun, competitive challenge and innovation. Virgin Blue employees embody these five values and convey a message to consumers that distinguishes them from employees of Qantas or Tiger Airways.

Employees are not imitated easily because not only are they of value to your business, but they are resilient to change and depositories for ideas, attitudes and behaviours (Somaya & Williamson 2008).  No other asset within a business has this capacity. This human capital, when harnessed through employee engagement cannot be cloned, purchased or easily acquired by your competition.  Furthermore, if your business can engage and ‘tap’ into this human capital, there is a very real opportunity to maximise employee efficiency and productivity. Businesses often fall into the trap of placing consumers first, and employees second.  As a business, don’t neglect to nurture the very interface (the employee) that interacts with your ultimate source of business revenue (the consumer).  It makes sense to become an employee-first organisation.  Your most valuable asset: human capital, when engaged and aligned with your company values is a real source for competitive advantage (Somaya & Williamson 2008).  Attract, recruit, retain and engage your employees with your company values to distinguish yourself from your competitors, deliver value to your consumers.

There is abundant anecdotal evidence that the FIFO lifestyle compromises the well- being of the employees and their families in terms of stress, relationship break-down, alcohol and drug use, depression and suicidality. Lowered job satisfaction and increased stress appear to be associated with extended periods of absence from partners, friends and family members – particularly children. In addition, stress placed upon partners and children is likely to spill over onto the FIFO worker him or herself. University of Western Australia research (Clifford, 2009) shows that although there is limited evidence to support long term psychological detriments associated with FIFO work, it does appear to be associated with short term stress increments, along with decreased job satisfaction. 

According to Beach & Cliff (2003), long term FIFO workers begin to suffer from “FIFO Fatigue”, which is defined as an emotional and physical tiredness resulting from constant absences from home and the stresses associated with repeatedly entering and exiting their family environment. It seems likely that these impacts may translate to increased turnover of FIFO employees.

A study conducted by the University of Queensland investigated employee turnover across nine FIFO mine sites. Mine Managers who were interviewed for the study considered that high turnover among FIFO employees was largely normal and outside management control, and therefore were not investing in attempts to manage the turnover. The findings of the study indicated that there was substantial variance in turnover across FIFO sites, suggesting that contextual factors play a significant role in determining the extent of turnover.

Some of the variables thought to mitigate FIFO turnover include roster structure, management commitment to training and development, management efficacy, and a positive work place culture. The sum of this research points to there being scope for employers to manipulate attraction and retention through their commitment to a “FIFO friendly” Employee Values Proposition (EVP). An EVP is a statement of why an employee should commit to a particular organisation; it represents the benefits of working for an organisation that make the experience of working there superior to that of other competing employers. Development of an EVP that takes into account the unique challenges of a sustained FIFO lifestyle is likely to promote attraction and retention of FIFO talent. 

While FIFO workers acknowledge that the FIFO lifestyle is a considered decision, and that they are financially compensated for the impact of FIFO upon themselves and their families, it does not follow that retention strategies should neglect to account for the challenges posed by FIFO work.

This reaction by an employee at the ‘coal-face’ of the organisation, and as far removed from astronauts and technicians as you can imagine, indicates an ideal alignment and engagement with NASA and its organisational vision. This employee effectively communicated that he knows, was driven by, orientated towards and also engaged with the organisational vision. He also knew and accepted his role in helping the organisation meet its vision and strategic aims. It is also imaginable that the janitor felt that he was part of something, indeed one of the most memorable achievements in human history. Are your employees part of something?

Porter (1974) defines organisational commitment as the degree to which individuals identify with, accept and believe in the organisational goals. Furthermore it entails individuals accepting goals and values of the organisation, and showing willingness to work hard and continue association with the organisation. In essence, it is having people that are proud and dedicated to your organisational greatness (Cohen 2003). Outcomes from organisational commitment can include increased retention, reduced employee turnover, reduced absenteeism and tardiness (Mathieu and Zajac 1990).

Many companies are far from placing men on the moon, however companies can draw value from formalising its organisational vision and having a strong employer brand. Strengthen your employer brand and give your employees something to align to and give them a reason to work hard for you. Employees unfortunately don’t come to work every day simply to increase your bottom line. If employees feel that they are part of an organisation that is “going somewhere” it seems logical that their motivation and engagement with the firm will be stronger.

A well defined vision must also be strategically communicated to your internal and possibly also your external stakeholders. This is not merely printing posters, creating mottos and posting them around the office as this does not engage or interact with the audience which you should be targeting. ‘Strategically’ suggests that you know who your key stakeholders are and that you effectively deliver that vision to them in a meaningful and engaging way. Reinforcing to trade suppliers that you are aiming to be number-one in workplace safety is far less effective than if you project it to potential employees. Traditionally a role adopted by communications managers, sharing the organisational vision is the responsibility of all departmental managers, supervisors and “coal-face” personnel. The NASA example is testimony to this.

Organisational commitment and employer branding are the trump cards to play as part of your retention strategy. Having an organisational vision is a pillar towards building not only your company brand but also your employer brand. Ensure that your vision is formalised and strategically communicated across your organisation. This is not a task purely assigned to communications managers, however across your management team to ensure that they have the appropriate tools, approach and competencies. The interaction between your employees and their supervisor/manager is a leading driver of employee engagement.

The influx of Gen Y into our workforces demands that retention strategies must evolve to meet new expectations and needs. Recent research suggests that employees may be attracted by higher salaries; however retention rates can be dramatically improved through strong employer branding and consistently delivering on your Employer Value Proposition (Moroko 2008).

An Employer Value Proposition (EVP) is the first phase of Employer Branding, whereby your differences and desirability as an employer are actively promoted internally and externally (Moroko 2008).  Employer Branding and the promotion of an EVP can be advantageous when companies show consistency between their Employer Brand and the employee experience, company culture and company values.  An EVP is also an effective way to ensure that employees believe in your brand, thereby increasing motivation and loyalty to your organisation (Mitchell 2002). 

Companies such as Virgin Blue are finding long term solutions by developing their Employer Brand and attracting the right talent to their workforce.  Fred van der Tang, CEO of Randstad described Virgin Blue as having an attractive EVP with a reputation for strong workplace culture, varied job roles and a high degree of job satisfaction (HC Online 2011).  Such a positive and attractive EVP can help companies establish a competitive advantage as an employer of choice.  These principles of employee attraction are well known, and can be used in retaining talent and thereby sustaining your company growth, cost management and business performance in the future. 

In forming an EVP it is important to understand what are the expectations and needs of future and current employees.  Workforces are inherently a mixture of individuals from differing demographics and psychographics.  Hewlett (et al 2009) asserts that the number of Gen Y employees and also Gen Y executives in the workforce today has increased dramatically.  This influx of younger employees has resulted in an attitudinal change in workplaces (Hewlett et al 2009) and hence drives a need to evolve retention strategies and change EVPs from monetarily oriented to non-monetarily oriented.  Research suggests that salary is neither the prime motivator nor the key to staff retention and incentive schemes for individuals are suggested as intensive to establish and low in impact (Ready & Conger 2007).  Employers can provide other forms of remuneration such as equity based schemes and company-wide incentive schemes where company success is shared across departments. 

Non-monetary benefits can also be promoted as part of your EVP in order to attract and retain employees. Recent research amongst employees at UBS, Time Warner, Booz Ellen Hamilton and Ernst & Young suggests that retaining Gen Y employees can be achieved through mixed rewards systems (Ready & Conger 2007).  This can include work flexibility and enabling contributions to the community, which were reported as trumping salary incentives. Examples of flexibility include allowing graduates to do a gap-year vacation prior to commencing work.  This gap-year is partly funded on the proviso that new recruits engage in community development during this period. 

Mentoring is an effective strategy for both Gen Y recruits and the retention of aging Baby Boomers (Ready & Conger 2007).  Time Warner introduced a reverse mentoring program whereby younger staff mentored Baby Boomers on the use of social media and Baby Boomers offered mentorship to younger recruits on values, management, leadership and skills development.  Companies such as Bankwest are appointing talent managers to identify and mentor potential employees of the highest calibre (Beyer 2011). 

New employees often seek challenges early in joining the workforce (Hewlett et al 2009).  Offer progression to employees via work on cross functional projects and secondments.  Align your organisational values with corporate and individual KPIs.  Establish a bonus structure, whereby employees are rewarded across the organisation and based on achievement of company KPI’s. 

There is no quick-fix or overnight solution for these retention issues.  Evidence suggests that long term commitment to Employer Branding, supported by an EVP that is consistently delivered upon will assist in attraction and retention in a competitive job market.  Consider retention strategies that match the evolving workforce and their psychographic need through offering job flexibility, community involvement, mentoring, and mixed reward systems.  Don’t be distracted by the immediate need to focus on growth and expansion plans, take a step back and review your employer brand before paying attention to your growth plans. This will build you a framework for future growth and will deliver stronger returns. If your value to potential and current employees is unclear, you will continue to experience growing pains.  Further, if you cannot offer a complete package of both monetary and non-monetary benefits, you will struggle to win the talent war that is looming.

One of the early researchers on employee engagement William A. Kahn (1990) describes engagement as an employee expressing themselves physically, cognitively, and emotionally during role performance. By today’s definition, employee engagement measures to what extent employees are prepared to ‘buy into’ an organisation and to demonstrate emotional and behavioural commitment to seeing the organisation succeed. As researchers, we are able to measure the level of engagement demonstrated by employees in their role using three key factors: an engagement index, hygiene factors and motivation factors.

Engagement Index

This measure provides an indication of the overall level of engagement within your organisation.  It is an index score based on responses to questions on the following three items:

1. Promote – The extent to which employees promote your organisation as an employer and as a service provider to their friends and family, basically the extent that an employee acts as an advocate for the organisation;
2. Commit – The extent to which employees want to remain long-term in order to bring about the organisation’s vision; and
3. Exceed – The extent to which employees are inspired to go above and beyond what is expected of them in their daily work, that is, to apply discretionary effort.

These scores are then collated to given an overall engagement index score. Our research has shown that employees tend to be more likely to promote the organisation they work for and less likely to apply discretionary effort to exceed expectations. Commitment to the organisation tends to rank last.

Hygiene Factors

These are the extrinsic features that an employee expects will be available as a minimum for them to be satisfied with their current employment situation. Hygiene factors include (but are not limited to) remuneration and benefits, job security, relationship with immediate supervisor and colleagues, corporate leadership, work and family initiatives and organisational policy.  It is only after an employee’s expectations regarding factors like these have been met that an employee can take their levels of commitment and motivation from satisfied to engaged.

Motivation Factors

These are the internal conditions relating to the nature and type of work the employee performs. Motivation factors have the potential to fulfil an employee’s need for achievement, competency, status, self esteem and personal realisation. Motivation factors include alignment with organisational values, interesting and challenging work, sense of achievement, career progression and development, recognition and employee empowerment. The fulfilment that arises from meeting and exceeding an employee’s expectations regarding these factors is essentially the antecedent for engagement.

However, measuring engagement is not just limited to these three components.  A degree of customisation is available to organisations wishing to explore additional drivers of engagement.  For example, organisations may wish to gather information on perceptions of role clarity and responsibility or whether employees feel they have clear goals and targets that meet the organisation’s own strategic objectives.

Measurement of employee engagement is more than just understanding what the right drivers are that influence employee happiness, motivation and productivity, it can also provide management with an insight into why the organisation is potentially not meeting its strategic goals.

The primary advantages of using an external provider include:

• Impartiality: An external provider is likely to be more objective and unbiased when developing, conducting and analysing employee engagement research. External providers tend to have fewer pre-conceived notions about what should come out of the research findings than the business/organisation will have about itself. An unbiased research process will ensure that the research covers all aspects of employee engagement and satisfaction, not just areas of positive performance which managers may be keener to concentrate on if conducted internally.  
• Respondent Anonymity: Employees are more likely to give their true, unfiltered opinions if they do not know or have no connection with those reading the answers they give.  If a company is conducting the research themselves, employees may feel less anonymity; for example that their manager would know their individual responses. This encourages respondents to give more socially acceptable rather than truthful answers or can even discourage participation entirely.
• Ability: An external provider is more likely to have the required skills and resources to carry out robust research than a business/organisation that does not specialise in research. Developing methodology, conducting and analysing research requires time, knowledge and skills that may simply not exist in the business/organisation or does not exist at a level required for producing reliable and useful research findings.

Probably the most significant disadvantage of outsourcing employee research will be the cost involved in using an external research provider. The cost of the research project will need to cover time and expertise required in the development of the research approach (questionnaires, setting up surveys/interviews, client communications etc), the actual conducting of the research (telephone/mail/online survey, reminders) and the data analysis and reporting stage. These costs are tangible and easy to weigh up in terms of whether the company can or wants to afford the research.

Although there are obvious costs in using an external research provider for employee research, doing the research internally can also prove costly in less obvious, yet nonetheless important ways. For example, there is the need to commit time and resources to the research that may usually be dedicated to the business/organisation. There may also be costs in terms of acquiring the knowledge and resources to analyse the research and understand what it means (training, statistical programs).

Most importantly, another cost to consider by doing the research internally is that poor research will lead to poor decision-making: in terms of employee research, this poor decision-making may diminish the opportunity for positive change in employee attraction and retention. Given that issues can occur with impartiality, respondent anonymity and ability to conduct robust research when conducting employee research internally, the quality of internal research may be compromised. A lack of robust research will result in employee’s wants and needs not truly being understood and thus not being addressed, leading to attraction and retention problems that remain or even increase.

So whilst it may initially appear that conducting the research internally will reduce costs, the actual cost to the organisation/business could end up being far higher. It pays to carefully consider whether the short-term saving made by doing employee research internally is worth the potential long-term cost.

Addressing the psychological needs of your employees is equally as important as their physiological needs.  Employees are motivated by at least three psychological needs (Nohria et al 2008);

1. The need to Acquire – social status, position/job title, responsibility.
2. The need to Bond – be connected with your peers and superiors.
3. The need to Comprehend – understand your work environment and any recent changes.

Research indicates that organisations often meet the obligatory demands of human resource management such as occupational health and safety, non-discrimination, non-sexual harassment and workplace equity.  However it would appear that firms are failing to attend to the psychological needs of their people. Acquire, bond, and comprehend are needs that are commonly unfulfilled in workplaces.  Thereby reductions in employee motivation and employee disengagement are often observed.

Employees often comment that workload and stress levels contribute significantly to job dissatisfaction.  Employee engagement is also reduced when employees are not acknowledged through career development and promotion, especially if they have recently worked on stressful projects.  Through our own employee engagement surveys, employees correspondingly mention that they do not see themselves remaining with their current employer in the long term.  Communication between employees and supervisors can also be ineffective when people are spread across geographical bases.  This makes it a challenge for employees to become familiar (and bond) with supervisors and colleagues.  If employee communication is ineffective, employees will not be able to comprehend changes in management or corporate branding, leading to disenchantment.

Leading Brand and Organisational Development consultancy, The Right Group, recommends addressing these three psychological needs that employees have and implementing an internal communication strategy that ensures employee engagement and motivation:    

1. Communicate to acknowledge: ensure that employees are acknowledged on a regular basis. Make appropriate promotions and offer additional responsibilities to employees that show competence and capability.
2. Communicate to connect: make employee engagement and dialogue a routine activity so that there is a facilitated connection. 
3. Communicate to ensure understanding: not only inform but routinely consult with personnel encouraging a two-way engagement process in company information and changes.

There is a need for clear solutions that organisations can readily implement.  Given that all firms are different, tailored employee engagement programs can delineate which psychological need is not being met within your internal branding efforts.

Understand people are your most important asset, and a critical start point when designing and implementing winning business strategy to prosper in 2011.  Organisationally, your top four priorities should be:

a)   Retention of the company’s best people; managing talent well and communicating often (especially during the GFC).

b)   Engaging your entire staff throughout this recession – make them feel safe, confident and that its “business as usual”.

c)   Be sure to control downsize activities carefully; number one lesson here is avoid staff cuts at all costs – a last resort only, and if you go this particular route, ensure quality and detailed communication is provided around the downsize actions; and

d)   Be sure that your organisation “walks the talk” on communication and costs.

As the CEO, or Head of HR / People Strategy, you’ve the responsibility (and a very strong business case) to hire quality talent. Best practice in this regard includes:

• Use key people;
• Defend training and leadership development budgets;
• Actively communicate and provide feedback; and
• Ensure that time, thought and a budget is invested in order to position your organisation for the rebound and for necessary improvement to capitalise upon opportunities.

We are fast approaching 2011; workers are disengaged as ever. They now notice unemployment is lagging, they’ve seen their work colleagues cut away during the recent GFC and aspects of their promotion/rotation/remuneration affected. Many are outright disgruntled and now with wider employment opportunities available to them, retention must be a fundamental strategy and key to maintaining your organisation’s knowledge base and ongoing productivity. People are searching for a clear job purpose, 360˚ relationships in their roles and a positive culture.

Business has become far more frenetic and dynamic, workforces are more complex and there is ever-increasing pressure exerted upon organisations to constantly be on the lookout for exceptional talent. With those workforces now often including three generations of workers all with differing needs and motivations, the management of such a talent base to remain competitive is driving many employers to think more strategically about HR, and workforce planning.

Talent management remains a critical issue facing senior managers and in the absence of a standard global best practice to follow, it becomes even more important to articulate the right definition of what ‘people needs’ should be satisfied by your talent management strategy. This necessitates that senior managers begin to place a similar importance upon Talent Management, as they do upon other ongoing business imperatives (such as increasing company turnover as the economy improves etc.).

With this intensified need, to carefully acquire, develop, deploy, motivate and retain key talent, smart managers understand the linkage and explore the synergy that exists between talent and their organisation’s business challenges and strategies. Defining key talent strategy will identify which of the team are to be excluded, and those high achievers upon which to focus. After all, it will be the talent which ultimately most differentiates your internal brand and organisational culture, so talent management must involve an integrated and wholistic approach.

Over time employee thoughts and actions will consistently form organisational culture. Ideal talent management should therefore be embedded across the entire organisation – modelled by the Managers, championed by your Leadership, and supported jointly through a range of HR and business initiatives as a priority.  Many of these initiatives and decisions should also reflect the company’s Brand values.

Recent research from the National Institute of Labour Studies indicates that unlike previous recessions, the skills shortage of 18 months ago has influenced companies to hold onto staff, rather than hiring and training young workers to boast the skills pool.

Professor Kostas Mavromaras from the Institute, highlights that generally employers want to keep experienced staff and typically cut training when business is down. In doing so they set themselves up for future shortages of qualified people. In this recent financial crisis, we see companies avoiding laying off many of their older workers, which differs from previous times.

This is a bonus for the baby boomers, who have watched their retirement age increase as their superannuation decreases. However, it’s not so beneficial for the younger generation of workers who are going to be left with serious skill gaps in the future.

It is over a decade ago that McKinsey’s strategic paper on the impending “War for Talent” was released, spurring HR leaders to upscale their talent attraction and talent management strategies. A key driver identified was the threat of the aging workforce and the impact this will have on our business world in the future. Aptly coined, the world population ‘pyramid’ will transform into a population ‘coffin’ by 2045 due to the changing age distribution. This will impact labour force participation and potential economic growth.

For many companies, the impending skills shortage is just something they will have to deal with in the future. Right now the focus has been on reducing costs and training has been one of the cuts on the top of that list.

Research suggests that some companies have cut training to the bone, while others have only reduced what they have considered as ‘non-essential’ training.

Leadership training you would think would remain on the company training agenda as an essential item. After all the leaders of the company are the very people who are being looked on to help the organisation pull through the tough times, spot the opportunities for growth and accelerate the company out of the economic downturn.

In addition, leaders are being looked on to drive employee engagement and productivity. With over 21% of the current Australian workforce disengaged, company management certainly has a task ahead of them. There is also the emergence of a new ‘style’ of leadership requiring additional skills such as building resilience and leading in crisis, that leaders need as part of their armour for future success.

If you think developing employees can wait until the dust settles and the economic resurgence begins, think again. Not only does this send a clear message to the people whose talent is the most highly valued, it also leaves your organisation vulnerable to under-performance through skills shortages and you may find yourself left behind in the wake of your competitors when the market turns.