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Engaging your
pivotal talent
Are you engaging the
right employees for the
right reasons?
Are you engaging the right
employees, for the right
reasons?
Highlights If these early days of economic recovery show us one thing,
Companies often focus on retaining star performers or leadership it’s that companies around the world are committed to Engagement
talent, overlooking pivotal roles—jobs that have an outsized ability getting the most out of their workforces.
to create (or destroy) the value customers expect. In 2007 approximately 10% of employees were
Though productivity rose steadily during the recession, defined as highly disengaged, by 2008, this figure had
Focusing on engaging pivotal roles, not just key people, can help
improve retention, while also improving company performance.
companies may now be paying the price in engagement, grown to 20% and by 2009, figures had reached an
which we define as employees’ involvement in and alarming 33%.2
It’s important to understand what people in pivotal roles want from commitment to work, and to their company’s strategy,
their work, and to find creative ways to motivate them. For some, Over the same period, retention remained at the same
mission and value proposition. After the layoffs and salary
non-financial incentives can work better than more money. levels and employees reported no greater inclination
freezes of recent years, many workers have become
to leave their employer. Instead, as the disengaged
stretched and demoralised.
have ‘dug in’ the reported level of discretionary effort
There could be even more at stake. has dropped by 53% since its peak in 2005.2
Research shows—and our experience with companies More alarming still, one in four high potential
supports—that higher employee engagement links to employees intended to leave their employer during the
improved retention, customer loyalty, revenue, sales next 12 months.2
and profit. 1
For Millennials training and development is the most
But not all roles are equal, and organisations that strive to highly valued employee benefit. The number choosing
raise engagement among all their people may be failing the training and development as their first choice of
ones who make the biggest difference to the business. benefit is three times higher than those who chose
cash bonuses. 98% believe working with strong
coaches and mentors is an important part of their
development.3
1. J.K. Harter, et al., “Causal Impact of Employee Work Perceptions on the Bottom 2. Managing people in a changing world - Key Trends in Human Capital
Line of Organizations,” Perspectives on Psychological Science, 5, 378-389, 2010. 2010: A global perspective. PwC Saratoga research.
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The future of employee
engagement
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What motivates your people?
Hint: it’s not always more money
Level of engagement
Who fills your company’s pivotal roles? High Looking at engagement through a new lens
Companies can dig even deeper into survey results, segmenting
We estimate that 80–90% of large companies conduct
people in pivotal roles based on engagement and loyalty. This can
help leaders anticipate and address vulnerabilities. Tenants Champions off-the-shelf engagement surveys that provide broad
• Very satisfied • Identify with company readouts of how strongly people feel committed to their
• Have a stabilising objectives
effect on company • Highly loyal and cooperative work and the business. But only 5–10% of those companies
• Willing, but need strong
direction
• Inspirational to colleagues link their surveys to business outcomes or use them to
determine what’s preventing key employees from excelling
in their roles.
A powerful engagement survey begins with how you look at
Disengaged Captives
your own people. Instead of segmenting employees only
• Dissatisfied, more frustrated • Rather critical,
than dedicated difficult to lead along traditional HR lines—like age, gender or tenure—
• Disconnected from the
company
• Interested mostly in own
advancement
companies would do well to also segment in ways that line
• Underutilised company • Opportunistic, ready to up directly with business goals. Pivotal roles and future
resources change jobs
leaders, for example.
Low High
What makes your people tick?
Likelihood of staying
When it comes to motivation, research shows that financial
5. Samuel Bowles and Sandra Polanía Reyes, “Economic Incentives and Social
incentives may not always be most effective and, in some
Preferences: A Preference-based Lucas Critique of Public Policy,” CESIFO cases, can even be counterproductive.5
working paper no. 2734, presented at CESIFO Venice Summer Institute, July
2009. One study found that, as long as a task involved only
6. Dan Ariely, Uri Gneezy, George Loewenstein and Nina Mazar, “Large Stakes
and Big Mistakes,” Federal Reserve Bank of Boston, Research Center for mechanical skill, higher bonuses led to better performance.
Behavioral Economics and Decision-Making, 2005. But for tasks that required even basic cognitive skill, higher
7. “Paid Time Off Programs,” WorldatWork, May 2010.
bonuses actually led to poorer performance.6
Why?
Beyond a certain base level of pay, motivation may matter
more than money. Some employees may respond better to
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Engaged employees can be
your engine for growth
Revenue
Engagement links directly to business performance (in $ millions) In tight times like these, what—or rather, who—do you
An analysis of employee engagement and, in this case, client invest your limited resources in? Where do you place
6
team performance data, reveals the link between engagement and your bets?
revenue growth, and highlights important risks and opportunities. -15%
55%
By focusing engagement efforts on talent in pivotal roles,
5
51% 58% companies can realise bigger returns on their efforts to raise
Vulnerable High
performing productivity and grow revenues without necessarily
4 12% expanding the workforce, all while mitigating the
disproportionately high costs of turnover in the most
3
important corners of the business.
10% 45%
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Facing up to the challenge
of change
Think about some of the companies that have grown their • motivating employees in nonpivotal roles, who may see • Do we have the right programs and incentives in place to
businesses by tapping into what really makes their people resources shifting. Nonpivotal does not mean motivate people in pivotal roles—from strong coaching
tick: Google or Netflix, for instance. The companies that unimportant and mentoring programs to work arrangements that
come to mind have at least one thing in common: they’re inspire autonomy or creativity?
• redesigning jobs so they appeal to the strengths of those
innovators, perhaps even industry disruptors.
you hope to engage • How can we create a work environment focused on
Perhaps that’s no surprise. One national study found that results and individual value?
• mitigating the consequences of natural turnover —
roughly 60% of engaged employees felt strongly that their
through Baby Boomer retirements or job-hopping • Does our succession planning cover pivotal roles, not just
jobs inspired creativity, compared to just 17% of those who
Millennials, for example—such as the loss of important company leadership, and do we have a good pipeline of
were not engaged and 3% of those who were actively
institutional knowledge or expertise. talent for those roles?
disengaged.8
Engaging your people, particularly those in pivotal roles, to HR and the C-suite should be asking these
8. “Engaged employees inspire company innovation,”
pursue innovation and performance improvement may questions: Gallup, October 12, 2006.
require new management thinking, both in the business
• What are the roles that create disproportionate value for
and HR.
our company and do we have the right people in them?
Common organisational problems to • Are the pivotal roles getting adequate resources and
anticipate might include: management attention?
• getting business units to take ownership of the talent • How might we segment our workforce in ways that align
agenda rather than delegating it to HR with business goals, identify barriers to productivity and
reveal opportunities for improvement?
• resetting employees’ long-standing expectations of
financial incentives • How can we develop a solid, fact-based understanding of
what really motivates our people in pivotal roles?
• loosening rigid decision-making structures to give
people in pivotal roles more autonomy
Richard Phelps
+44 (0) 20 7804 7044
richard.phelps@uk.pwc.com
Neil Roden
+44 (0) 20 7212 8033
neil.j.roden@uk.pwc.com
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www.pwc.com/hrs
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