Every business will increasingly be confronted by a daunting array of challenges when it comes to attracting, motivating, and retaining its workers. In the aftermath of historical highs in unemployment, there is supposed to be an abundance of talent—yet attracting the best people has become more difficult than ever. Additionally, some 84 percent of current employees report that they plan to change jobs in the upcoming year, according to a recent CNN Money report.
A proliferation of new social networking and database technologies is transforming the way people look for work. As important, technology has changed the way companies look for, hire, and manage its workers, as well. And a new generation of independent, transient, and globalized workers in the burgeoning knowledge economy is creating new rules around hiring and the engagement of workers.
Although most every company claims that “people are its most important asset,” there is increasing pressure to live up to that slogan and better align workers with key strategic drivers of business performance. Measurement of performance in organizations is shifting and becoming more demanding, requiring all employees to demonstrate their contribution to corporate goals, not just their functional output.
This section examines the metatrends that are shaping the new workforce, and provides insight into how managing employees is being severely stressed to meet the needs of business and commerce in the 21st century. These key work trends are imperatives management must address worldwide. This is not simply a short-term cycle but part of a longer-term trend that is shaping the fundamental way that people think about work and interact with their employers and each other.
Recent events have brought national economies shuddering to a halt, and, with that, a sudden shift in the critical labor shortages that had plagued developed economies for more than a decade. With millions of workers having lost their jobs in recent years, the basic rule of numbers would suggest that the labor supply should be plentiful. And while it is true that unemployment levels in many countries remain historically high, the issue facing most businesses is an increasingly critical shortage of talent—individuals who bring to an organization education and occupational skills that can make an immediate and lasting impact.
As economic growth gathers pace, shortages in certain industries appear almost as acute as before the recent economic collapse. In some areas of health care, science, and IT, the talent shortage never actually disappeared, and those remain highly challenging environments for hiring, motivating, and retaining key talent.
We are entering a phase in the demographic cycle that will be characterized by chronic talent shortages in certain sectors over the long term, as part of a longer-term trend dictated by population cycles. Population growth in major economies is below replacement rates, meaning there will be increasingly fewer people of traditional working age, relative to the older population. The total fertility rate (TFR) is a measure of the number of births per woman in the population and serves as a proxy for population growth. A rate of 2.3 children per woman is generally considered the replacement rate in developing countries, while 2.1 is the rate in developed economies. Above this rate, population is increasing, and below, it is generally falling.
Fertility rates are in sharp decline in the vast majority of industrialized countries, while they are growing significantly in many underdeveloped countries. Unfortunately, many of the countries with fast-growing populations do not have the educational infrastructure to develop a level of skilled labor that can be readily substituted for the shortfall in industrialized countries. This results in a paradox: Economies may see record unemployment while at the same time recognizing a global shortage of talent. This paradox may be more or less pronounced depending on the specific employment sector, but it is an inevitable emerging trend.
The trend is marked and becoming more acute at a time when workplaces are demanding higher levels of skill and knowledge. So while economic conditions may ease the unemployment rate, that will not provide a reprieve to the long-run trend of a diminishing supply of skilled labor.
This is the new operation reality for businesses of all types and sizes. The best-educated and skilled technical and professional employees will be in greater demand, harder to find, and harder to keep, and will command a premium to switch or relocate to new jobs.
Just as entire countries modify their national immigration policies to counter this trend, companies seeking highly skilled talent will need to consider strategies that will enable them to circumvent this demand-supply impasse. Of all the forces that are converging on business, few will be as daunting as this demographic shift, simply because it is virtually locked in for at least the next 30 years.
To meet this shortage of skilled workers, companies will need to get more creative in hiring and motivating workers. For example, a greater percentage of part-time employees will be used to tap into the new demographics of hiring more single-parent workers, retirees, and students. Tata Motors in India, for example, makes a targeted recruitment focus on ex-military employees and single-parent mothers—both of whom they have found to be reliable workers who possess skills they need in their organization. The company also has built relationships with technical education institutions, recruiting students as interns or in work/study programs in which the students alternate attending school and working in successive quarters, which typically leads to permanent hiring upon graduation.
More than 18 million people choose to work part-time, according to the U.S. Bureau of Labor Statistics. About 61 percent of these part-timers have some college education. Women represent two thirds of the part-time workforce, which they increasingly seek in their prime earning years to balance work and family responsibilities. “Professional moms would be thrilled to lower their hours to spend more time with their children, and they don’t mind giving up benefits to achieve that work/life balance,” reports Alison Doyle, an About.com job search and employment subject matter expert. “Other part-time labor sources include near-retirees and older workers who don’t want to retire or are unable to retire but don’t want to commit to full-time positions.” And in a study by Corporate Voices for Working Families, a Washington, DC–based research firm, researchers found that engagement was 55 percent higher for hourly workers with flexibility than for those without, while turnover was half.
Likewise, companies and each of their managers must become better skilled at keeping employees—especially those with prerequisite skills and experience. Changes will need to be made to prevent treating nontraditional workers (for example, part-timers, Millennials, and contingent workers) as second-class citizens, and rather to embrace their alternative perspectives on motivation and work.
In another example, the use of volunteers in the organization can be better harnessed as well. Vern Lake, a volunteer services consultant with the Minnesota Department of Public Welfare, shares ways they have helped volunteers enjoy what they do even more—and more often:
• Provide them with the best possible preservice training.
• See volunteers as working partners with paid staff.
• Invite them to attend staff meetings.
• Offer them advocacy roles.
• Utilize them as consultants.
• Be familiar with their assignments.
• Arrange for them to get discounts on the organization’s products and services.
• Put up a suggestion box for volunteers only.
• Send newsworthy information (include their accomplishments) to the media.
• Commend people to supervisory staff.
• Tell the volunteers’ friends about their accomplishments.
• Recommend them to prospective employers.
• Invite them to quarterly social mixers attended by top management.
• Add them to your holiday card list.
Millennials, the youngest generation of workers, born roughly between the mid-1970s and 2000, are entering the workforce in droves. An estimated 44 million are already working, and 46 million more are to become a part of the workforce in the upcoming years ahead. This generation will come to dominate the workforce in both number and attitude, and in the process reshape the work experience that all employees will come to have. What is important to this generation, and how can employers best tap into the potential they have to offer at work? Given that 75 percent of this generation say they plan to find a new job as the economy improves, it is worth taking a closer look at how you can best attract, motivate, and retain them in your organization today.
The influx of the Millennials into the workforce is changing many of the ground rules that prevailed for the previous generations. They have entered the workforce with different attitudes, expectations, and ambitions. There are identifiable traits and attitudes that range across issues of job selection, tenure, work–life balance, remuneration, promotion, and not least, the use of technology. The Millennials are the first truly globalized generation of workers. They have grown up with technologies that have shrunk the workplace, expanded their horizons, and made them feel comfortable operating in a borderless world. For them, the digital workplace means dealing with colleagues from different cultures in different time zones.
Whereas the previous generations have the greatest direct experience in the global business environment, the Millennials are becoming the driving force for change. They see global experience as a positive differentiator in job selection and promotion.
For the Millennials, the lines between work and personal life are blurred. They are the first generation that’s been raised in a 24/7 environment. The communications revolution has made that possible, and the Millennials don’t view it as a burden.
Issues around work–life balance become important because in an environment where work and social life are ill-defined, there needs to be some level of compromise. The workplace itself is evolving to meet some of these requirements. For the Millennials, the workplace is not solely about work—it is a place for social interaction and shared learning and meaning and purpose in their lives. Workplace culture, relationship building, and ongoing learning are thus critical to these individuals.
The Millennials are also bringing new approaches to the issue of ethics, the environment, and social responsibility in the workplace. They are more likely to want to work for firms that have a good reputation for ethical and environmental performance, and they are ready to tell others when their employer is doing well or doing poorly. They are acutely sensitive to the changing fortunes of brands and the way in which social, ethical, and cultural influences can enhance or destroy corporate reputation.
The issues of career paths, responsibility, and promotion frequently arise in regard to Millennials. Some people say they are overly ambitious, even impatient. What is apparent is a significant focus on making the most of opportunities and advancing one’s career. This can affect decisions concerning job stability and tenure.
The task of recruiting and managing these latest entrants to the workplace can seem bewildering, especially for those whose approaches are based on old notions of command and control. The benefits of diversity in the workplace are well documented, and the Millennials bring a rich opportunity to challenge established notions, refresh practices, and tap into new thinking, technologies, and attitudes.
Understanding the varying needs of the different generations—everything from communication style to management techniques to organizational structures—becomes important if everyone’s needs are to be met. When generational differences are better understood, there is a better chance of creating a high-performing workplace in which everyone works better together to achieve common objectives.
Employers worldwide are adapting to these behaviors and striving to get the best out of this diversity that characterizes the modern workplace. Critical to recruiting and motivating this generation is an understanding of their social and cultural drivers, something that is beyond many organizations today. Additionally, once employees are hired, a renewed focus on employee engagement must be put in place.
Known by a variety of names (Gen Y, the Nintendo Generation, the Microwave Generation, Generation Next, the Net Generation, Generation Why, the Echo Boomers, and the Trophy Generation), the young people of this generation are well educated, and they have high aspirations for themselves and their careers and a lofty sense that who they are and what they do matters. They love all things high-tech, have and expect instant connections, and are highly optimistic and socially responsible. The Millennials bring some tremendous skills and attributes to the workplace, which can at times be offset by perceived negatives of their generation.
UPSIDES
Millennials are techno wizards, not only at complete ease with today’s technology, but avid users more so than any generation to come before them. They are quick learners and very resourceful—quick to look for answers from whomever and wherever those can be found. They are optimistic, hardworking, and high achieving, systematically setting and then achieving goals in rapid sequence. While these characteristics can be found in high achievers of any age or in any generation, they are common elements found in the majority of Millennials, not just a select few, and, better yet, these attributes all happen to be ideal characteristics that most every employer needs from its employees in order to be competitive today.
The challenges of working with Millennials are: They tend to have an inflated opinion of themselves and are overconfident, especially given their limited work experience. They expect to have meaning and purpose in their jobs from the very first day of work and look to be challenged—some might say entertained—constantly. They want to earn more sooner and to have both job status and respect, even before either has been earned. They need and demand instant feedback and praise on an ongoing, daily basis. Other generations tend to react negatively to these attributes, feeling that Millennials are a generation of spoiled youth that need to wake up to the realities of work in which everything does not revolve around them. They need to “pay their dues” and earn the respect of their colleagues and management before they are trusted with greater responsibility. However, if managers can look past Millennials’ limitations and shortcomings, they will have an easier time tapping into the vast potential this generation has to offer.
This generation feels very entitled and expects more from its employers. Again, Millennials have been raised to believe they are very special; a generation that has been told they can achieve anything. They have big dreams and plans and are in a hurry to achieve those. These are positive attributes, but they need to be channeled—and that’s the job of their managers (like it or not). I’m not talking about abdicating your role as a manager. Or about letting them do whatever they want. I’m talking about connecting their values and skill set to the work that you need them to do.
Everybody wants everyone else to be just like them: to value what they value, to act like they act, and to conform to their norms. Just as easy to accept is the notion that we can allow people to be who they are, i.e., different from one another, but still keep a clear focus on the performance that is needed to get the work done. As is the case for the perceived differences in this generation’s work ethic, if you give younger employees a reason to get excited, they will and do show an extraordinary work ethic and passion to get the work done—and to have fun in the process. Keep the focus on the work and not on things that may not matter anyway, e.g., dress, informality, working hours, communication preferences, and so on.
In my research, work’s most motivating aspects to employees in general—and especially for this generation—are things that don’t cost much, if any, money. Taking time to get to know them, asking their opinions, involving them in decisions (especially those that affect them and their work), creating socializing opportunities at work, focusing on learning and development opportunities—these are the motivational opportunities that any manager can deploy.
Scott Cook, founder of Intuit, lives by the notion that the newest and youngest employees are often the most valuable when it comes time to make changes and inject fresh ideas. He makes an effort to spend time with them, and believes that he can learn from them, whereas the common perception is that it is senior management who usually ought to serve as mentors for more junior employees. His approach, Cook has found, ignites the creative process and makes employees feel more valued.
This practice at Intuit has been so successful because Cook doesn’t just solicit ideas from younger employees. For example, rather than take accepted proposals and assign them to more senior managers, Cook lets the employees who introduced the concept take the project and run with it. Not only does this put less-visible employees at the head of very visible projects, it encourages innovative thinking and shows that the company truly values input from all employees, no matter their rank.
The keys to motivating this generation can be found in harnessing these aspects of the work relationship: Managerial Time, Work Direction, Personal Development, Social Interaction, Feedback and Praise, and Meaningful Rewards.
MANAGERIAL TIME
In studies of the younger generation, one of the consistently most motivating variables was “time with one’s manager.” Managers need to make special efforts both to be available and to actually connect with younger employees on a more frequent basis at work. For example:
In some organizations, managers are expected to have oneon-one discussions with their direct reports at least once every two weeks, in which employees set the agenda of questions they need answered, items they want to discuss, or advice they need from their manager.
• Larry Meadows of the Asheville Mall Chick-fil-A restaurant in Asheville, NC, makes a special point to call individuals into his office on a regular basis to discuss how things are going and hear their concerns.
• At Genentech, the San Francisco–based founder of the biotechnology industry, scientists have access to top managers.
• New hires at ViaSat, the satellite communications company based in Carlsbad, CA, are free to approach upper management with questions or to contribute new ideas. The door to executive leaders is always open.
WORK DIRECTION
Millennials want and expect to be constantly excited about how they are spending their time at work. They are consummate multitaskers, very capable of managing a multitude of activities at once. Easily bored, they want and need to be challenged, which is a blessing for managers who want to take advantage of their energy, skills, and resourcefulness.
Provide clear work expectations, but allow Millennials to bring their own imprint to their jobs. Show them the “big picture” as to how their jobs relate to the mission, strategic objectives, and core values of the organization. Ask for and use their ideas as much as possible, or encourage them to pursue their own ideas when those have merit. This generation is very socially conscious, so linking them as directly as possible to the mission of your nonprofit organization would have a strong impact; likewise for volunteering. For example, if the organization is Meals on Wheels, let the Millennial go on home visits to see directly who the organization is helping and hear their appreciation, or task them with helping to increase the organization’s online presence to expand the reach of its mission.
Millennials expect constant learning and personal development and growth, and their manager can easily serve as a coach and mentor to them. Talk in terms of “development opportunities” and in long-term time frames that exceed any given task or assignment. If you shape the context for your relationship with Millennials as extending years into the future in regard to how you will help them grow and gain experience, they will be more likely not to look to change jobs at the first sign of frustration or disappointment.
Millennials’ managers need to take the time to help coach Millennial employees and in the process show them how they can make a positive, meaningful impact at work. Redefine the time frame for this generation’s focus and show them how the things they are doing now can lead to things they want to be doing later. Talk with them about their interests and the ways they can apply their skills; talk about career paths and needs of the organization; discuss opportunities that they can pursue, and help them prepare to meet future opportunities.
SOCIAL INTERACTION
Millennials are very social and perhaps more peer group–oriented than previous generations. Most of their upbringing and educational experiences were in groups, as was the bulk of their social experience, be it playing interactive video games, group sports, or connecting on Facebook with their friends.
Use these generational preferences to your advantage by allowing them to work together on projects and assignments, and set up frequent nonwork social situations such as team-building activities and celebrations. If they tend to work best with others, and the way they get into a project is to talk it through with coworkers—great, let them do that. Make clear what you need the end result to be, but let them bring the imprint of who they are to the task so they can be excited about the work and even have fun getting it done. You may not need your job to be fun to get it done, but don’t fault them if that’s their preference.
FEEDBACK & PRAISE
One of the most defining characteristics of this generation is its significant need for constant praise at work. This can be frustrating for other generations to understand (as in “I just told him last week that he was doing a good job, do I really have to tell him again?”) and easy to dismiss as being a symptom of a generation whose parents spoiled them, showering them with constant praise and protecting them from any of the harsh realities of life. Instead, consider this perspective:
The Millennials have learned that in times of change one needs a constant source of feedback (think “video game”) to be on the mark and to adjust their performance accordingly. Since job requirements and expectations are constantly in flux, yesterday’s feedback may no longer be relevant today. Constant feedback, thus, is not to pump up a frail ego as much as to assure employees that they are on track to continue to do good work day after day for their employer. Feedback and praise serve as reinforcement as well as a corrective mechanism for this generation.
By this I don’t mean “micromanaging,” a negative term that is almost always associated with an ongoing stream of negative feedback and corrections that a manager makes in working with employees. No one feels micromanaged when the boss tells them in explicit detail what he or she most liked about a great job the employee did. As such, I’d recommend making it a high priority to provide greater and more frequent praise and recognition in a greater variety of forms. Equally important, but far less often (quarterly?), would be having “developmental discussions” in which you can focus on ways the employee can improve. When you build on a strong foundation of ongoing positive feedback, employees are more likely to trust that you are on their side and thus be willing to accept constructive criticism from you when it is offered.
Provide frequent feedback based on the performance of Millennials, which might be a new perspective for many of them who grew up getting trophies even when their team lost or all As as a result of rampant grade inflation in schools. Provide a context for how their contributions relate to team and organizational goals, to the organization’s customers, and even to society. This systematic framing of feedback and praise takes it from being unearned hype to a practical information stream that can help shape desired behaviors and results you need from them.
Finally, be authentic, providing direct and honest feedback and evaluations that can best help the Millennial to excel—and to trust you, his or her manager, all the more in the process.
Millennials want rewards that are meaningful and exciting to them when they have done good work or an outstanding job. This includes financial incentives, and, of course, EVERYONE wants to make more money, not just the Millennials. Millennials, however, may have the least realistic expectations as to what is needed to earn more money (especially if their role model is P. Diddy, Lindsay Lohan, or A-Rod), and that’s where you can help them out. Show them the skills they need to learn and the contribution they need to make in order to make more money, and show them the path that will get them there working for you in your organization.
This translates into discussions in which a manager needs to state things like: “I can’t just pay you more because you want to make more. I can pay you more when you have increased your contribution to the organization to a level that warrants earning more. Let’s talk specifically about what that would look like.” Then you can channel the person’s energy into things he or she can directly impact, such as implementing a cost-savings idea, or delighting an important customer, or helping to streamline a process, or helping to bring in a new account, and so on. Of course, there will probably be limits as to what they could ever be paid by your organization, in which case you can focus on skills you are helping them develop that they can use over their entire career or to one day run their own business.
When this generation is acknowledged for doing good work, they have expectations that the reward experience will be fun and exciting, not the same old boring thing the company has done for years. They increasingly expect rewards that are creative, varied, and personalized. Creative in that the rewards are fun and unique—not the same certificate, plaque, or trophy that has been passed out to employees for years. Varied in that the employee has a choice and a say in what they can get when they are rewarded for doing a good job. The days of one size fitting all are long gone when it comes to employee motivation. What thrills and delights one employee may be boring and insulting to another. Avoid this problem by allowing employees to choose what best motivates them—be it the latest electronic merchandise, an experience, or a charity donation—when they have the opportunity to be thanked for having done a great job. Personalized in that the reward needs to be tailored to their unique interests, which can be a hobby, travel, or a life experience.
Junior employees at Hitachi in Portland, OR, get 300 hours of training a year on average.
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The law firm of Kelley, Kronenberg, Gilmartin, Fichtel, Wander, Bamdas, Eskalyo and Dunbrack in Miami, FL, values collaboration and promotes an open-door policy for younger associates to chat with more seasoned attorneys.
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SAS, the world’s largest privately held software business, based in Raleigh, NC, allows employees to come to work at any time in the morning as long as they get their work done. The typical week is 35 hours and many employees set their own schedules. “What we don’t do is treat our employees like they’re all, you know, criminals,” says Jenn Mann, vice president of Human Resources.
At the Microsoft office in Portland, OR, employees can work in their pajamas.
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Social networking giant Facebook, based in Palo Alto, CA, is known for its open culture and lack of enclosed work spaces, walls, or cubicles. Neither the COO nor the CEO has an office.
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At Zubi Advertising, headquartered in Miami, manager Michelle Zubizarreta gives younger staffers a seat at the table. She asks them how they would talk to young consumers for a business pitch. Another initiative is the creation of innovation groups, setting up teams to develop ad-related iPhone apps and other original ideas.
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Chicago-based insurance company Assurance Agency has many initiatives to motivate Millennial employees. Since many of these employees have no insurance background, 75 percent participate in continuing education. Employees get $100 when they pass a class. Fun programs include the Assurance Casino: Employees get a chip when they meet goals, increasing their chances for winning cash prizes. There is also an Employee Appreciation Day and an Assurance 5K run. Instead of using a suggestion box, the agency created Ivan Idea, a mascot shaped like a lightbulb, to collect ideas from employees. Employees get $5 for every business improvement idea they submit. The best idea wins a $250 gift card.
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PROVIDE JOB-SHADOWING OPPORTUNITIES
Job shadowing, essentially, is offering employees experiential, hands-on learning opportunities. Shadowing affords a current or prospective employee the chance to be immersed in the actual job environment, making it possible to see an experienced worker apply the skills and traits needed to accomplish the work. An insightful observer can glean information about the personal characteristics that contribute to success in the position.
Some employers prefer to orient new employees before involving them in job shadowing to build on the new employee’s existing knowledge of the company. Post-orientation job shadowing can reinforce loyalty, strengthen the orientation or “onboarding” process and subsequent training processes, and shorten the time it takes a new hire to get up to speed. Pamela Genske, Human Resources director for Blue Cross & Blue Shield of Rhode Island, says her firm’s employees learn about shadowing opportunities in orientation and can ask for a shadowing assignment any time after joining the company. “People remember what happens in situations they’ve been placed in much more effectively than they recall a theory they’ve been taught in a classroom,” says Genske. The Indiana Department of Corrections and the YMCA are other organizations that offer job shadowing.
Oregon Cascade Plumbing and Heating, based in Salem, OR, regularly hosts contests, and awards a Kermit the Frog statue to whomever has the best-decorated office or the ugliest shirt.
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Defense contractor Lockheed Martin in Fort Worth, TX, reached thousands of students and potential new hires during National Engineers Week in February through various hands-on projects and presentations that showed how engineering impacts everyday life.
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Chicago-based Total Attorneys, a process-improvement firm that helps small law offices and solo practitioners streamline their practices, does its best to give Millennial employees a sense of ownership and belonging. CEO Edmund Scanlan has lunch with every new employee, where he tells them they have freedom to do what they want—for example, decorating their office in unique ways or checking their Facebook pages. Employees enjoy an on-site gym, a TV room, and beer-and-wine Fridays. They can also attend corporate events that the company hosts.
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The Peace Corps and the U.S. State Department offer opportunities to learn a foreign language and live and work overseas.
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Google, based in Mountain View, CA, has a policy that requires each new office to have a tenured Googler as one of its first ten employees in order to ensure that the culture is passed along from veterans to rookies. The company has also developed “Culture Clubs,” made up of volunteers who help maintain the culture. And in an attempt to attract top human resource professionals to Google, the company introduced the HR Rotational Associate Development program for recent college graduates. Every year, 10 to 15 undergraduates, many of whom were Google interns, complete three 9-month rotations in a distinct area of People Operations: Analyst, Generalist, and Specialist. Career development is another component of the program meant to help associates advance in the company.
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Investment firm Morningstar, based in Chicago, sends its entry-level employees through a two-year rotational process called the Morningstar Development Program. The new employees learn the business and where they fit into it. They stay in one role for one year and can then move to different roles to learn skills in other areas. The firm also gives its Millennial employees relatively high levels of responsibility.
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At travel company Orbitz Worldwide, free time is valued just as much as work time. Within the first four years in the company, employees get 12 vacation days, 5 floating holidays, 10 regular holidays, and numerous sick hours. They also get two volunteer days, a free flight, and a free hotel night.
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Euro RSCG, the Chicago-based marketing and advertising agency, offers outreach and community programs, extensive training, lunch-and-learn sessions and art-making events, and a Ping-Pong table to its workforce. Millennial employees have access to senior employees, and the CEO regularly sends e-mails and letters to keep them abreast of the agency’s operations.
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According to Jeff Ellman, Homescout Realty cofounder and managing broker, the Chicago-based agency was built around Millennials. “I care more about culture than anything,” says Ellman. “We won’t hire someone if they don’t fit. We have a culture-based interview based on the 5 Fs: Fit, Family, Fun, Fortune, and Freedom. If you don’t fit in our culture, this won’t be the right fit for you.”
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FactSet, a software company based in Connecticut, sends new hires who are college seniors a gift basket and a “good luck” note before they take their final exams.
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Marriott Hotels offers a “Teamwork-Innovations” program for employees to improve efficiency by working together and scheduling their own hours.
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Kimley-Horn and Associates, an engineering firm in North Carolina, holds regular lunchtime forums for employees to network, share advice, and plan social get-togethers.
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Scottrade, a firm based in St. Louis, MO, has implemented a peer recognition program, Above and Beyond, that provides rewards such as jewelry and iPods.
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Umpqua Bank in Oregon has outfitted its branches with cafés and couches and often provides recreational activities in the office for its employees.
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Intuit has a Rotational Development Program for new hires to switch between finance, marketing, and product development every 6 to 12 months.
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Accounting firm Deloitte and Touche makes new recruits immediately eligible for its “Future Leaders Apprentice Program.”
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L’Oreal USA created the “L’Oreal Brandstorm Competition” for college students to play the role of a L’Oreal brand manager; they helped develop marketing and advertising campaigns. Winners received a trip to Paris to interact with top L’Oreal managers.
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One of the most important workforce trends of the past two decades has been the rise of a new breed of contingent workers—consultants, freelancers, contractors, “micropreneurs,” and temporary, “permanent” temporary, and part-time employees. Many of them are professionals who have been dislodged from salaried careers as a consequence of business restructuring and economic upheaval. Instead of waiting for new opportunities to come to them, they have started up their own businesses, providing services to clients on a project-by-project basis.
According to the 2010 U.S. Department of Labor, Bureau of Labor Statistics, contingent workers comprise four categories of workers:
1. Independent contractors, who make up the largest of the four alternative work arrangements with 10.3 million workers, 36 percent of whom have at least a bachelor’s degree, and were more than likely to be in management, business, and financial operations; sales and related occupations; and construction and extraction occupations.
2. On-call workers make up the second largest group of workers employed in alternative arrangements with 2.5 million workers; they tend to be younger employees with less than a high school diploma, working primarily in construction, education, and health services. About 44 percent of on-call workers work part-time, a much higher proportion than either traditional workers or workers in other alternative arrangements.
3. Temporary help agency workers represent about 1.2 million workers who are likely to be women, young, and black, Hispanic, or Latino. These workers are more likely to hold office and administrative support and production, transportation, and material moving jobs, and are often employed in the manufacturing and professional and business services industries.
4. Workers provided by contract companies make up the fourth and smallest category of contingent workers; 70 percent are men working at the customer’s worksite in professional, service, and construction and extraction occupations, most frequently employed in the construction industry and public administration.
In the United States alone, there are over 10 million self-employed individuals, and almost 22 million nonemployer firms, or businesses with no payroll. Christopher Dwyer, an analyst for Aberdeen Group, says contingent workers make up 20 percent of the labor force and will likely increase to 25 percent shortly. It is now estimated that 57 percent of all work being done in organizations is by nonemployees. These workers are operating across a vast range of industries, with the greatest numbers in the services sector. Traditionally, staffing firms found jobs for office, clerical, and industrial workers, but today engineers, lawyers, drug researchers, and even senior executives make up the contingent labor force.
Those who describe themselves as self-employed are a rising share of the workforce in many industrialized economies. They have redefined the orthodoxy of lifelong employment to one of lifelong employability. “Contract or freelance work can bolster job security by severing workers’ ties to the fortunes of one company,” says Steve Armstrong, general manager of U.S. operations for staffing firm Kelly Services.
There are relatively few people in today’s labor market who can honestly say that they have job security or, in some cases, employer loyalty—certainly not in the same sense as applied in earlier eras. Now the emphasis is on attaining the skills that will allow for lifelong learning as a pathway to long-term employability.
As more people go solo, they need to become more flexible, entrepreneurial, and responsive to the needs of the market. They take on personal responsibility for updating their skills and staying relevant. They do not operate under the security of permanent employment and thus need to think afresh about the skill sets that will sustain them for the long haul. They need to always have an eye on the next project and the next employer, even as they are immersed in a current project; networking becomes a lifeline, not just a social endeavor; and marketing their services needs to become second nature. They also need to worry about things traditional employees often take for granted: employee benefits, vacation time, and finances for retirement, for example.
The rise of the contingent workforce is also shaping new patterns of business behavior. The recruitment of staff needs to account for the shifting needs of the business, and the availability of a pool of skilled workers with specific expertise suited to particular projects. Assignments can be for a period of weeks or months. The needs of the contingent workers become very different from the needs of a permanent workforce, and businesses need new skill sets to understand and manage a contingent workforce that may be spread across various states, countries, and time zones. The organization’s ability to attract needed talent, maximize the motivation of such talent, and be able to access that talent over uneven periods of work becomes paramount.
It’s been described as the age of the “disposable worker” or the “permanent temporary” workforce. As organizations have looked to cut back on fixed costs, they have progressively cut a wide range of employment and pension benefits, and now have turned the cuts to the work itself, seeking to find ways to have lower-cost and more-flexible work arrangements with a wider variety of workers.
For employers, hiring contingent workers ushers in a new era of flexibility, with all the benefits that brings. Ken Lancaster, owner of Lancaster Advertising, who began using freelancers to cut costs after the 2001 terrorist attacks pummeled the economy and his business, found graphic artists, Web designers, and illustrators for as little as one tenth the cost of traditional employees on Elance, an online freelance marketplace. He says, “You never have to fire anybody, and if they don’t live up to expectations, you just don’t use them again.”
But utilizing contingent workers also heralds a much more complex way of managing organizational talent. If key people can jump from one assignment to the next, how do organizations retain the critical talent and competence that provide the organization’s competitive advantage? How do they protect the knowledge and intellectual property that can slip out the door? How do they go about accessing the talent they need across the globe, juggling myriad legal, financial, and regulatory issues across jurisdictions? How can organizations find, let alone manage and motivate, such talent?
The strategies to attract, motivate, and retain contingent workers can be as varied as the workers themselves. You can offer them:
• Orientation that allows them to understand the mission of the organization and how the work they will be doing ties to that mission
• Ongoing communication from periodic meetings and inclusion in communications that all full-time employees receive
• Flexible work schedules that allow them the hours they most want to work
• Training that can benefit the workers by developing their skills as well as provide the skills your organization needs
• Varied work assignments that allow their work to have interest and interactions with others in the organization, as opposed to just the boring, rote tasks that no one else in the office wants to do
• Business services such as MBO Partners, www.mboco.com (formerly MyBizOffice) or concierge services that can provide useful time-saving services for the contingent employee
• Invitations to join staff for department or companywide meetings, team-building activities, and celebrations
Most important, perhaps, is taking time to get to know them: their names, abilities and aspirations, what motivates them, and praising them when they do good work for you and the company.
Remember, you will never receive first-class performance from a contingent employee who feels that he or she is treated as a second-class citizen!
Since 60 percent of temporary workers say they’d prefer to have full-time work, many companies have created “temp to hire” programs that look first to hire full-time employees from the pool of temporary workers who are known to the company, rather than on the open market. Other employers have moved to creating their own pool of contingency workers that provides a stability of repeat work for those who have established themselves with the employer as being good workers.
For employees, contingent work entails a new approach to upgrading, deploying, and marketing their skills. They need to be alert to changes in the market that can open up new business opportunities, as well as ones that can make them redundant. They need to be open to exploring new strategies for obtaining work and often many new strategies at once because they can never be certain which strategy will work. They have to be wary of longer-term projects with larger employers, for while such projects provide needed and often well-deserved financial rewards, they also can provide a false security that takes them away from the pulse of the market and its ever-changing needs and priorities. Thus, contingent workers need to constantly be flexible and to avoid becoming too comfortable in working for any one employer or on any one given assignment.
These factors greatly impact the types of assignments they select. Assignments that enhance their skills, increase their visibility, or solidify their reputation can offer a win–win for both parties. For employers, such projects can help attract the most talented workers who are eager to be on the cutting edge of market needs; for employees, it keeps them at the forefront of relevant skills—often defining such skills and competencies for everyone in the market.
The task of grappling with a shifting contingent labor force while safeguarding critical knowledge and maintaining morale in the permanent workforce will be one of the key challenges of the coming decade.
San Francisco–based Bank of America offers the My Work program, which encourages people to work from home 60 percent of the time.
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New York–based CitiGroup has more than 11,500 employees enrolled in flexible/alternative work programs globally, which enables the company to offer alternatives to employees affected by site closures. Across town at American Express, one satisfied employee says working from home gives her more fulfillment because she has more time to volunteer.
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Capital One, the financial institution based in McLean, VA, provides flex programs, including four-day workweeks and job sharing. The company makes prospective employees aware of these benefits when recruiting.
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Midland Memorial Hospital in Midland, TX, is experimenting with allowing employees to take the summer off and continue their benefits during that period.
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Island One Resorts, an Orlando, FL, time-share company, offers flexible work schedules, tuition reimbursement, and telecommuting options to its workers.
At pharmaceutical manufacturer Merck Frosst Canada & Company in Kirkland, Quebec, several employees take advantage of flexible work plans involving either telecommuting or job sharing.
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Claims adjusters with Farmer’s Insurance in San Diego work from home, connected online with the district office in Orange County. Adjusters receive case details via phone or e-mail, investigate property damage, and return to their home offices to file the reports.
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At Reader’s Digest in Pleasantville, NY, employees work 35-hour weeks and may choose a flextime schedule.
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At TRW, now part of the Mission Systems and Space Technology sectors of Northrop-Grumman and many other defense contractors, employees can work a “9/80” work schedule in which they work nine hours a day and receive every other Friday off. In a recent survey, employees ranked this benefit as being more important to them than their health care coverage provided by the company.
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At Deloitte Touche Tohmatsu’s West Palm Beach, FL, office, employees have the freedom to move between part-time and full-time schedules to raise their young children.
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Robert W. Baird, a financial services company located in Milwaukee, offers flexible summer schedules and time off on Friday afternoons. Many associates enjoy “flexible work arrangements,” which include job sharing, telecommuting, flexible hours, compressed work schedules, and part-time working arrangements to accommodate family needs. More than 20 percent of the company’s associates take advantage of flextime opportunities.
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Pharmaceutical giant GlaxoSmithKline provides most benefits for a new type of worker—sales representatives who are limited to a three-year employment period.
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REI, the recreational equipment company based in Kent, WA, offers some form of health coverage to all employees, including temporary and seasonal workers. The best plans are available when employees work 20 or more hours a week. Other perks include an employee product discount, retirement and profit sharing plans, and discounted travel through the REI Adventures program. Similarly, every part-time employee who works at least 20 hours a week at Seattle-based Starbucks Coffee can get full benefits including health, retirement, stock options, plus a free pound of coffee every week.
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After employees put in 400 hours of work, Whole Foods Market, headquartered in Austin, TX, provides health, dental, and vision plans, retirement plans, paid time off, and a 20 percent store discount.
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Upscale Nordstom department store, based in Portland, OR, offers its part-timers health insurance, a 401(k) retirement plan, and paid time off. They also get disability and accidental death insurance and adoption assistance.
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Shipping giant UPS, based in Atlanta, GA, offers what it promotes as a “world class” benefits package to part-time workers, including medical, dental, and vision coverage, and life and long-term care insurance.
Karla Herzog had a problem. As the president of Total Personnel Service in San Diego, she knew it was important to stay in touch with the employees she hired and placed with clients, but since she hardly ever saw them once they were hired, the task was daunting. How could she connect with employees who were always with clients at locations other than her own? How could she make them feel special when she never saw them and knew nothing of their needs, frustrations, and successes in their jobs?
With the changing nature of work today, more managers are in Herzog’s spot. They have to adapt to new circumstances for recognizing employee performance. Increasingly, empowered employees are working more independently in their jobs, with the authority and autonomy to act in the best interests of the company. Many organizations are also moving to decentralized operations, so an employee’s manager may physically be located at a different facility or even in a different state. And global companies increasingly expect executives to oversee staff in remote, and often overseas, locations.
SCAN HEALTH PLAN ENCOURAGES
WORK FROM HOME
SCAN Health Plan encourages employees to stay home and work by offering free high-speed Internet access and free office furniture. The health care industry is continuing to expand, in spite of the current economic state, but companies in the industry are struggling to find ways to grow without spending more money. SCAN found a way around this by allowing employees to work from home, and making it comfortable and convenient for them to do so. Allowing employees to work from home eliminates the need to find larger office buildings and reduces the overhead of offices that are already up and running.
Times have changed drastically over the decades, due in part to continual technological advances. As such, the way in which business is conducted has changed as well. Operating on a global scale has become much easier, and more streamlined, thanks to new methods of communication that have aided in decision making, smoother operations, and ease of expansion. Fortunately, this has also opened up new possibilities for how employees work.
Gone are the days of communication limited to fax and phone lines or face-to-face meetings. These days, some businesses operate entirely on a virtual platform, with employees scattered throughout the country or the world. While not every company is able to operate this way, a large percentage of jobs can be done outside the typical 9 to 5 or in the office. As a result, in recent years, many companies have experimented with flexible schedules or telecommuting options.
While it’s tough for some managers or business owners to welcome the option of employees working remotely, it’s important to remember that employees are adults and should be treated as though they are responsible people. Most employees will perform better if they feel empowered and trusted. Consider some of these statistics:
• 86 percent of employees today report that they wish they had more time to spend with their families.
• Nearly 30 percent of workers in the last five years have voluntarily made career changes that resulted in a salary reduction in an effort to lead a more balanced life.
• Almost 50 percent of employees value the option of flexible or work-from-home hours.
• 54 percent of employees appreciate the option to leave work early to tend to family or child matters.
• A large percentage of workers would reduce hours or pay if it allowed them to have more time for personal interests or to spend with family.
• More than 60 percent of workers feel that their jobs are part of their identity, rather than simply a paycheck.
A sense of work–life balance tops the list of most employees when asked what they need in order to feel good about their work. Not to be mistaken with just a desire to “work from home,” the definition of balance to employees translates, for the most part, to the ability to retain their sense of identity. Even though a large percentage of employees feel as though their jobs constitute their identity, that’s not necessarily the way they would like it to be. Encouraging employees to explore interests outside of their daily roles, or expressing interest in their lives outside the office, can convey a dedication to ensuring a good balance.
The workplace itself is being redefined to include such arrangements as telecommuting, flexible working hours, and job sharing. “Futurework: Trends and Challenges for Work in the 21st Century,” a report by the Department of Labor, found that roughly one in ten workers fits into an alternative work arrangement, with nearly 80 percent of employers offering some form of nontraditional staffing arrangements. And some 47 percent of employees today now do some amount of telecommuting.
So how can managers best recognize performance when employees may not even have physical contact with their managers for weeks or months at a time? In a virtual environment, recognition needs to be more of a conscious and planned act because there are not as many spontaneous opportunities to acknowledge an employee’s hard work and accomplishments. Making sure a virtual employee stays motivated, happy, and productive is the key to ensuring the success of a virtual workplace.
Karla Herzog understood that, and found new ways to manage, communicate with, and recognize her employees. That means delivering recognition awards to the employees at the client site, or sending them to the client to present to her employees. She uses every type of communication with her employees as an opportunity to recognize and better communicate. Herzog has the payroll department include fax-back forms with all employee paychecks to see how things are going, and she asks her employees to tell her of any questions or concerns. She then takes those issues seriously—and gets back to the employees quickly to resolve them.
ENCOURAGING EMPLOYEES TO
TAKE PERSONAL TIME
At one Silicon Valley employer a horn blows at 5 P.M. on Friday, signaling everyone to go home.
Encourage employees to refrain from checking e-mail on the weekends. One firm went so far as to enable an automatic note that pops up when employees access their e-mail, reminding them that it’s the weekend.
Closely monitor vacation days and encourage employees to use them, especially if they haven’t taken a day off in a while.
There’s no substitute for face time when it comes to building trusting relationships. At The Ken Blanchard Companies in Escondido, CA, the company expects all managers to hold one-onone meetings with each direct report at least once every two weeks for at least 20 minutes. Sometimes those meetings are on the phone, but the employee always sets the agenda. If your employees are in the office less, coordinate your schedules so that you are at work when your employees are there. This could be a set time each week or during “core hours” when everyone is present (if your company operates that way). Talk about issues of real importance to employees, to the work, or to the company in general. A robust employee training and orientation program is another priority for building a strong foundation with every employee.
Employees are motivated by managers who take the time to get to know them. A recent survey of 500 professional employees by MasteryWorks in Annandale, VA, found that the primary factor affecting a respondent’s decision to leave an organization was whether or not the manager developed a trusting relationship with them. Says Caela Farren, CEO of MasteryWorks, “Managers who get to know their people, respect and trust the competency of their employees, and listen continually for how employees are doing relative to their aspirations, quality of work life, and sense of career advancement, will have a far greater chance of developing and retaining their employees.”
Edward Jones makes every effort to make its employees feel valued, and the results are evident in the longevity and positive attitude of nearly every employee. A survey of Edward Jones employees conducted by Fortune revealed that 96 percent of employees considered the company a friendly place to work, and more than 89 percent felt that managers followed through on what they said or promised. But the most telling statistic is that 83 percent of employees have every intention of working at Edward Jones until they retire.
The vast majority of employees cited their reason for holding the company in such high regard as a sense of truly being cared for. And even though the company has grown rapidly over the years, the culture has remained the same. Employees who have been with the company for decades feel as though principles and values have remained intact throughout all the growing pains. The company encourages employees to move around within the organization, a practice that has resulted in low attrition rates, infrequent boredom among employees, and a broader, more fulfilled group of employees.
The personal and professional growth of their employees is of utmost importance to managers at Edward Jones. Employees are encouraged to explore new opportunities within the company, which combats the threat of their becoming bored and looking for new experiences outside the company. Some employees are asked directly to lead or participate in new ventures ranging from moving around within the office in which they are based to traveling overseas to launch new departments, projects, or offices. The philosophy behind this practice is centered on Edward Jones’s culture, which strives to develop initiative and drive in all employees. The company encourages employees to seek out new opportunities, and if the fit is right, employees are given the autonomy to forge ahead with the role or project. If the employee is lacking in a few key areas, the company provides the training necessary to effectively move into the desired role.
24 HOUR FITNESS FOCUSES ON
EMPLOYEES’ HEALTH, TOO
The founder of 24 Hour Fitness, Mark Mastrov, believes in showing an interest in employees’ personal lives and thus encourages managers to have conversations with their staff regarding their goals and how the company can help achieve them. He also wants them to talk about things that are outside of work: family, school, personal interests. Doing so shows employees that they’re more than just a part of the company’s workforce, they’re individuals as well, and the company cares just as much about that.
The approach of 24 Hour Fitness has resulted in not just a successful global business, but one that can pride itself on having happy, productive, and dedicated employees. Motivation among the company’s employees starts with a sense of knowing that managers genuinely care about them as individuals and want them to succeed. Moreover, employees feel noticed and that their contributions, no matter how small, do not get overlooked. Employees who are reminded that they are appreciated tend to show higher levels of productivity, motivation, and desire to do what they can for the good of their employer.
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Here are some guidelines for building rapport with and providing support for your employees:
TAKE TIME WITH EMPLOYEES.
It all comes back to communication. Getting out and talking to employees, spending time with frontline staff, and making an effort to truly listen to employees can open your eyes to seemingly small accomplishments that would otherwise go unnoticed. No matter how small, the roles and responsibilities of every employee are a critical factor in the overall success of an organization.
BE AVAILABLE FOR QUESTIONS FROM EMPLOYEES.
Best, Best and Krieger, a large law firm in Southern California, promotes an open door policy wherein anyone who has questions or concerns regarding their personal or professional security is free to discuss their worries with the firm’s managing partner. Employees are facing some very real fears, and ignoring these can only make them worse.
SHOW UNDERSTANDING AND EMPATHY.
It’s important for all employees to feel that their managers are on their side, rooting for their success and seeking to help them succeed in any way possible. When employees are faced with life changes, tragedies, or circumstances demanding more of their time than usual, it is important that they feel comfortable discussing these scenarios with their managers or employers. If they are met with understanding and a willingness to help, they won’t ever forget it. And the happier and more stable your employees, the better your business will fare.
SUPPORT EMPLOYEES WHEN THEY MAKE MISTAKES.
To sustain employees’ trust and respect, it’s especially important for their manager to support them when they make a mistake. It’s easy to find fault and openly criticize an employee, perhaps even in front of their peers. But if you take that approach, you may never again get back what you lose in terms of an employee’s self-esteem and willingness to act independently and use their best judgment.
One of the cornerstones of the virtual office is making sure that virtual employees feel that they are an important part of the team. Working as a virtual team may mean that employees are working on the same project, but limited face-to-face contact can make virtual employees feel isolated from other team members and they may be unable to see how their efforts contribute to the results.
Managers must take a proactive role in fostering a sense of teamwork by involving virtual workers in all team meetings through any available means—telephone conferencing, e-mail, chat rooms, etc. Be sure to include some form of recognition in all team meetings. Verbal ways include:
• Acknowledging a good comment
• Recognizing small accomplishments
• Rewarding the honoring of commitments
• Thanking a “lurker” (someone who doesn’t often post comments to e-mail discussions or chat rooms) for giving input to the discussion
• Praising someone for bringing up a not-so-popular opinion or idea
• Recognizing and praising group dynamics
We know from electronics that the farther the source, the weaker and more distorted the signal. Likewise, the greater the distance from one’s manager, the greater the effort both parties have to make to keep in touch. This can be done through updates and/or more frequently scheduled meetings and visits. When Intel Corp. founder and chairman Andy Grove visits his company’s workplaces, he has an open-comment session in the cafeteria and invites employees to bend his ear. Another executive I know keeps office hours when he visits his company’s plants, so that any employee can sign up for an individual meeting. Consider using other means to stay connected: newsletters, Web chats, electronic message boards, and conference calls. Provide the same types of communication, recognition, and rewards that you provide for the employees who are located closer to you.
Too often, managers use technology like voice mail or e-mail as another means to dump work on their employees. It may seem faster and more efficient to do so, but employees are denied even a chance to ask questions about projects that are assigned when work is delegated via such one-way communication vehicles.
So use technology as a communication tool, not just as a way to off-load a new project. As more employees work off-site on either a full- or part-time basis, managers will need to incorporate the Internet and company intranets into their reward and recognition programs. These vehicles also can be used to promote the exchange of information and encourage questions. Managers can create problem discussion boards, host “chats,” or create an “applause” bulletin board to capture the exchange of group praising. That’s the approach at Hughes Network Systems, a high-tech company I’ve worked with in San Diego. Whenever anyone in the company logs on to the company’s intranet, a bulletin board pops up labeled Applause and anyone can add a comment of praise for someone else in the organization to this message board, which after a few days scroll off the screen. AG Edwards, the financial services firm, hosts weekly audio conference calls of all employees—nationwide. Employees at Home Depot love the weekly satellite feeds to every store, which are dubbed “Breakfast with Bernie and Arthur,” their chairman and CEO. These examples show the ability companies have today to use technology to personally connect in real time with dispersed employees.
Realize that employees at other locations or who telecommute from their homes already feel they are second-class citizens. They imagine they are the last to hear about changes and news in the organization. Be empathetic with employees who do not work full-time at the main office: Duplicate any form of communication, recognition, or celebration that is done at the central office. I know of one employee in a field office who reported receiving a check from corporate for $1.18 on his birthday—the cost equivalent to two movie tickets bought in bulk and distributed to employees at the home office.
With any reward and recognition program, managers must be sure to reward the behavior they desire with recognition that is valued by and meaningful to their employees—not themselves. This is especially true when designing the virtual reward and recognition program, because the state of being virtual brings a whole new set of issues to bear that need to be identified and addressed in the plan.
So in creating a recognition program, managers should start with the motivational needs of their employees and build from there. Ask virtual employees what they want! This can be done in one-on-one discussions or by other techniques, such as sending an employee an index card to list items they find motivating, as they do at BankBoston. One financial analyst there told me that he listed “time off,” “lunch with his manager,” and “Starbucks coffee” on his index card, returned it to his manager, and forgot about it. He was elated, however, a month or so later, when he finished a project and was given a coupon for a Starbucks coffee with a personal note of thanks from his manager. The fact that a manager took the time to find out what would be meaningful and then used that information in a timely way left quite an impression.
You can use simple survey techniques to find out what is important to your employees. Or you can ask everyone to share two items they find motivating at an upcoming meeting—in person or online. As you involve the people you are trying to motivate, not only are you likely to be more on the mark, but others will more likely take ownership of the recognition program or activities. Discuss whether people would like more recognition and, if so, what form it should take. Ask who in the group would like to help get some new forms of recognition going. Involvement equals commitment. Today, the best management is what you do with others, not to them.
Managers have to work hard to help all employees feel integral to their jobs. Keeping virtual employees motivated to do their best is a very achievable task if done with the right focus at the right time. Take the time and the effort to recognize all your employees and you will reap the rewards of a more excited, energized, and productive staff.
The Executive Committee of the Society for Human Resources Management (SHRM) recognizes associates in other regions by calling to thank them for a particular job well done.
Barbara Green, office manager for Buckingham, Doolittle and Burroughs in Canton, OH, shares this example of “virtual applause”: “We sent an e-mail to our entire staff asking everyone to applaud the great efforts of our office services department at 4 P.M. at their desks. Members of that department work throughout the building and are rarely in one place at the same time, so this was a terrific way for each staff member to receive the benefit of the praising at exactly the same time and in the same way.”
Noticing that most client letters of appreciation were never shared with home-based employees, Cruise.com, headquartered in Ft. Lauderdale, FL, created the Friday Fan Mail eBulletin, which recognizes excellence in service. Every week, agents forward e-mails or letters to Human Resources, where they are compiled and sent out in an e-bulletin to all employees. Once a month, the agents who have submitted customer e-mails participate in a drawing for a $25 gift certificate.
During the hot summer months when staffers put in a lot of driving time, agencies of QSource, the Memphis-based nonprofit health care management expert, leave bottles of ice water in the staff workrooms. They replace the bottle labels with ones that read “Stay hydrated! We care about YOU!” Says Barbara Meadows, MSN, RN, a home care quality improvement specialist for the organization’s Nashville office, “We’ve got a creative bunch of folks with big hearts and little budgets.”
Based in Wayzata, MN, Hammer Residences, a service provider for people with disabilities, offers remote working arrangements for employees who must move out of the area.
The march of globalization has spread across a range of markets as diverse as motor vehicles, natural resources, energy, and food. Labor is the latest “market” to be engulfed by the tide of globalization, as human talent becomes a fluid and exchangeable asset across international borders.
The concept of globalization often attracts bad press. The image of hooded protesters hurling objects through the plate glass of McDonald’s at a G20 summit is the ugly fact of the trend. But globalization, as a phenomenon, has been advancing at a hectic pace in recent decades, fueled by greater international mobility, prosperity in the developed world, and a communications revolution that has transformed the exchange of information.
Distance is no longer the obstacle it used to be in the predigital era. In many industries, a trained professional in, for example, Guangzhou, China, can easily supplant a similar professional in New York or Dubai. In certain industries where skills are highly transferrable, there is little to stop workers from being recruited for assignments in any location around the world.
This is truly revolutionizing the way that we search for, locate, and deploy talent. There are still clearly many jobs that require a central locality. But there are an increasing array of jobs, and elements of jobs, that can be tasked to individuals in any part of the globe.
E-health means that diagnostic tools can be accessed by patients and health care professionals remotely; scientific research is becoming highly internationalized; in construction and manufacturing, use of standardized CAD techniques mean the design elements can be outsourced to wherever they can be implemented competitively. In the growing knowledge economy, there is virtually no limit to the breadth and scale of functions that are open to globalization.
All this presents a unique challenge for any business. In a relatively short time, it has moved from a comfortable position in which the boundaries of its work were defined by its physical location, to one where the talent pool is literally global and may be sourced from anywhere.
This issue raises a new hurdle for the businesses: workforce virtualization. With the growing use of new technologies, companies are faced with a decision of whether to move the work or the worker. In many cases, the work can be performed anywhere that skilled talent exists rather than the worker having to be on-site. Workforce virtualization allows an organization to source talent globally, but tasks their Information Technology with having an efficient, cost-effective, and workable solution that may not yet be ready to address the challenges of the global shift in worker availability.
Companies realize the potential of tapping into a vast global labor pool, especially at times of talent shortage. They are heading in this direction and will need help in doing so. Companies will be expected to become proficient with a range of technologies and platforms that support an ever-broadening set of functions. They will also need knowledge of labor markets, cultural differences, key recruiting methods, and laborer laws in a variety of jurisdictions, requiring a level of expertise that may not exist today.
The globalization challenge will require practitioners who are able to exploit networks and resources across multiple locations, and who can apply the best of their knowledge to the benefit of a local enterprise. It may also require the organization to be willing to explore outsourcing certain functions to providers with the global reach to enable their business strategies.
U.S. companies continue to expand their operations globally at breakneck speed. In the process of going global, one of the most significant challenges organizations face is learning how to motivate, recognize, and reward people of all cultures.
The key to success lies in understanding the cultural attitudes and business practices of other countries. Companies that foster cultural sensitivity and help workers from varying backgrounds feel comfortable can increase employee productivity and job satisfaction.
Since the beginning of the decade, U.S. corporations have invested $400 billion abroad and employed more than 60 million overseas workers; also, more than 100,000 U.S. firms have engaged in global ventures valued at more than $1 trillion. In the International Relocation Trends Survey report by Windham International and the National Foreign Trade Council, 61 percent of surveyed companies increased their expatriate population over the last five years and 85 percent expect continued or increased expatriate activity.
Over the next decade, almost all real economic growth will occur outside the United States and Europe. As ethnically diverse workforces continue to become a significant part of our new business reality, sensitivity to the cultural and business practices of other nations will be critical. To successfully motivate a global workforce, it is essential that U.S. corporations put aside their assumptions about the superiority of American business practices.
“One of the stepping stones to a world-class operation is to tap into the creative and intellectual power of each and every employee,” says Harold A. Poling, former chairman and CEO, Ford Motor Company. The best way to do this is to energize employees by using rewards and forms of recognition that are meaningful and motivating to the individual regardless of that person’s nationality.
In America, most companies use individual public recognition, rewards, ceremonies, and bonuses. Employee of the Month awards, gift certificates, time off, and other incentives are also used to motivate and reward employees. As organizations cross borders, however, they are learning that what motivates their American employees might not work for their counterparts in Latin America, Asia, Europe, and Africa. Worse, an action that is favored in the U.S. might be inappropriate and result in the opposite effect on an offended employee elsewhere.
In Germany, for example, business is serious and workers are conservative and very private. Rather than an energizing force, public ceremony and recognition of accomplishments would tend to embarrass the German worker. Other cultures look at the American focus on praise and recognition as a weakness. “Why are Americans so insecure about themselves?” an Asian businessman might ask. “Why do they have to be reassured about everyday activities they were hired to do?”
Some recognition practices can be standardized across many countries—they just need to be managed locally. For example, the New York–based Colgate-Palmolive Company conducted a global review of its performance-evaluation systems to ensure that all tied in with the company’s underlying premise of respect. While parts of the performance-evaluation system easily transferred abroad, the company made revisions to reflect the cultural differences of various countries. In another example, the company ran a pilot survey in Brazil, sent out in translation. One of the questions, “Do you feel you receive equal opportunity in the organization?” presented difficulty because the term “equal opportunity” was unknown. In response, Colgate rewrote the question: “Do you feel you’re treated fairly?”
Instead of exporting the American approach, Colgate-Palmolive attempts to blend cultures. Ron Martin, director of global employee relations, says, “We want people to understand the Western piece, but we have to maintain objectivity and say just because we do something a certain way doesn’t mean that it’s the only way it can be done, nor that it’s the right way to do it. It’s taking a look at all people and everything that makes them different from each other, as well as the things that make them similar.”
While some recognition practices are manageable across multiple cultures, this is not usually the case. U.S. corporations must overcome the assumption that American views and business practices are universally held. “In the United States we’ve made a mistake thinking that because we’re U.S.–based, what’s good for us is good for everybody around the world,” says Carol Kaplan, manager of global compensation and benefits at Applied Materials, Inc. “What happens then is that we export programs that aren’t culturally sound and then end up creating animosities toward corporate headquarters.”
In fact, from one country to the next, the list of differences is significant: our perception of time; our future orientation; our strong business focus on profit; and our view of relationships. In the U.S., for example, change is often viewed positively and is seen as progress and strongly linked to future success. In contrast, the cultures of Europe and Asia are steeped in history and tradition, and great pride is taken in doing things the same way previous generations did. Countries such as France and India value stability, continuity, and tradition—factors that are not as strongly valued in typical U.S. businesses.
In more traditional cultures, change is considered a disruptive and destructive force to be avoided if possible. To effectively recognize employee contributions in these countries, employees would likely prefer recognition for upholding the values and traditions of the organization. Praising them for enhancing the reputation of the company or for their loyalty and years of service will show these workers that you value their culture—and will recognize them in a way that is meaningful and motivating.
Sensitivity to local attitudes and customs, cultural expectations, economics, political situations, and the history of the countries in which businesses are operating is critical to creating a successful global rewards and recognition program. U.S. companies cannot transfer American customs and business practices into the global market and expect them to be successful. There are many cross-cultural issues that need to be addressed, including different styles of managing, communicating, giving feedback, and negotiating.
Understanding the way a particular culture drives behavior will indicate how companies should energize and reward a diverse workforce. Some areas with significant differences across borders include:
TIME
Attitudes toward time vary significantly from one country to the next. In the U.S., time is a major driving force, a precious resource not to be wasted. Americans are always in a hurry. Foreign visitors sense that Americans are more concerned with getting things done on time than with developing meaningful relationships. As a result, Americans are much more abrupt in their business dealings. They conduct meetings, review agendas, and make snap decisions with an eye on the clock. Most of Northern Europe is also time-sensitive.
In contrast, much of Latin America, Africa, and the Middle East has a more casual view of time. In these countries, greater emphasis is placed on developing relationships. In Mexico, for example, it may take several breakfast or lunch meetings before people feel comfortable with you as an individual and are ready to begin conducting business.
U.S. companies operating in countries where time is not a controlling factor and relationships are greatly valued will need to consider these differences when determining how to reward and recognize employees. For example, company policies that reward employees for meeting timeliness standards might be modified, placing more emphasis on the desired results, not on how they were obtained.
COMMUNICATION
Americans typically prefer an open and direct communication style—considering anything other than that to be dishonest and insincere. In Sweden, a direct approach is also valued as a sign of efficiency, but unlike the U.S., heated debates and confrontations are very unusual. The Swedish business culture strongly favors compromise, and individuals will not risk the feeling of consensus and agreement. In Germany, Sweden, and Switzerland, business is serious and humor is not generally a part of business. In Asia, company leaders are expected to be sensitive to the feelings of subordinates and understanding of others’ needs.
Eye contact is another important aspect of communication—and one that is important to look at by culture. For example, in France, direct eye contact is a frequent and intense part of communication, as it is in Latin America, much more so than in the U.S. Direct eye contact in other cultures would be considered challenging and aggressive. For example, in Japan, direct communication and eye contact is considered a sign of disrespect.
By understanding the cultural differences in how people communicate, companies can more effectively recognize and reward their global workforce for their contributions. For example: Finnish and German employees tend to prefer written communication to face-to-face interaction. In these cases, a letter recognizing employee accomplishment would be most effective. Japanese employees usually prefer quiet recognition. Open praise at a staff meeting will generally not be effective, nor would singling out individuals for praise in public. In Mexico and Latin American countries, communication is open and personal, with a strong emphasis on developing relationships. Recognition of employees’ contributions, particularly relationship-building successes, will be well received.
ACTION/WORK ORIENTATION
While companies in the U.S. have taken some steps toward creating a “family friendly” work environment, the prevailing attitude is still that Americans live to work, and a significant part of most Americans’ identity is determined by “what they do for a living.” Americans typically believe that leisure activities should assume a relatively small part of a person’s total life.
Respect for the individual’s family life is generally greater outside the U.S. In Latin America, the Middle East, and Africa, there is a clearer division between work and family. In Mexico, the family is of vital importance, and issues affecting the family take priority over work. In many Asian and European cultures, the family is viewed as an essential institution and treated with high regard. For example, in Singapore sustaining traditional values and family strength are seen as intangible factors in the success of East Asian economies. In these cultures, economic and social progress are viewed as being inextricably linked. However, in Asia work is often viewed as an extension of the family, that is, the division between work time and private time is blurred. A Japanese company often expects employees to work late or on weekends, entertain business guests on weekends, or send employees on business that involves personal time.
There are a variety of ways to recognize employees that will underscore strongly held family values:
• Write a letter acknowledging an employee’s accomplishment and send it to the employee’s family.
• Allow time off, or at least a flexible work schedule, so employees can attend to family matters.
• Send birthday cards, get-well cards, and flowers, when appropriate, to family members.
• Hold “open houses” at work and invite family members to company celebrations.
• Grant employee time off to volunteer in a child’s classroom or to attend school field trips or sporting events.
COMPETITION VS. COOPERATION
Americans tend to believe that competition brings out the best in individuals. As such, contests and public sharing of work progress are often the norm. Americans conduct business at rapid speed with intense focus on results, and are often compelled to make decisions quickly without soliciting input from other employees, clients, or vendors. And although many U.S. companies are striving to be more participative, many still tend to hold most power and authority in top executive levels.
Many cultures outside the U.S. promote cooperation and teamwork over competition. For example, in Sweden and Japan a good manager is seen as a coach who leads his employees through cooperation and agreement, not through his power and position. In many European and Asian companies employee input is sought on nearly every business matter, often starting with the workers’ opinions. And in Japan participative management in decision making within business is well-documented.
To be successful in many countries overseas, U.S. companies need to shift the focus from valuing individual contributions to recognizing the value of teamwork and cooperation for obtaining desired results. Recognizing employees with these values for their ability to work together—to make group decisions, to offer team suggestions, to manage themselves—will show that you understand their culture and will motivate them with recognition that is meaningful and powerful. For example, Japanese employees will be pleased to be valued as a team player, but not for individual successes that put the employee above the group. Compliments within the workplace would be much more indirect. For example, a manager wishing to compliment a subordinate could ask an employee’s opinion or he could invite him to a meeting he would not normally be invited to. So, to effectively reward employees for their successes, it’s important to understand the cultural differences that influence employee contributions.
Many companies already understand the importance of a reward system that recognizes the contributions of all employees. As U.S. companies become increasingly more global, differences between American-style business practices and those of other cultures will become magnified. To be successful, organizations need to be flexible and willing to adapt their way of thinking. This means putting aside our vision of the world as we know it and working to understand the dynamics of the culture we are operating in. That’s the challenge U.S. companies face.
Regardless of our differences, unleashing the power of a workforce that feels motivated, challenged, and supported is the only true way for a company to attain success in today’s competitive, global environment. Hal Rosenbluth, former CEO of Rosenbluth International (now a part of American Express Travel) says, “The highest achievable level of service comes from the heart, so the company that reaches its people’s hearts will provide the very best service.” With almost all real economic growth over the next decade expected to take place outside the U.S., learning how to inspire, recognize, and reward a multicultural workforce can mean the difference between success or failure for any global company. Companies that find ways to build on common denominators among cultures will be better able to motivate their employees and will reap the benefits of an energized workforce.
The e-mail marketing firm e-Dialog, based in Burlington, MA, launched a program for newly promoted employees, with a focus on women mentoring women. Through participation in particular projects or committees, women work with real business problems and are exposed to decision makers. They learn how to navigate the corporate world and find new opportunities. Future plans include starting a working-moms group, connecting them to options for child care and financial planning.
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At Leominster Credit Union of Leominster, MA, the company’s “Respectful Workplace Charter” presents core values for the organization, including “valuing each other’s uniqueness and contributions and ethnic and cultural diversity.” All employees sign the charter, which is reviewed annually.
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Root Learning Inc., a management consulting firm based in Sylvania, OH, honors individuality at work. The company displays caricature drawings of every employee in the lobby. The drawings integrate images of each person’s individual interests or talents—such as writing children’s books, riding bikes, or solving puzzles.
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International company Alcoa, Inc., with several thousand employees in more than 25 countries, tailors its service awards and recognition programs to follow local customs. Likewise, Kennametal, which operates facilities in about a dozen countries, has a global service award program that varies by location and is tailored to each culture and region as appropriate.
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MOTIVATING EMPLOYEES AROUND THE WORLD
Michael Losey, president and CEO of SHRM, has pointed out that the lack of global experience among HR executives could have profound implications as U.S. companies head into the new global business era. As he stated it: “HR policies will be influenced more and more by conditions in other countries and cultures. HR managers will need to sensitize themselves and their organizations to the cultural and business practices of other nations.”
Understanding what motivates employees in different cultures is essential to the success of U.S. corporations doing business globally. The following are some of the issues companies should look at when considering ways to motivate, recognize, and reward employees in different cultures.
JAPAN
Individual recognition programs have not worked well because Japan has a collectivist culture and workers do not want to be conspicuous. Individual pay for performance is considered potentially disruptive to pleasant working relationships and is not used. Instead, year-end bonuses are given based on loyalty, years of service, and one’s family situation. Team awards have been effective—some include salary increases and an allowance system as incentives for outstanding performance.
KOREA
The Korean government has a long tradition of prize and discipline incentive systems to enhance productivity. Few group incentives are used. Employees with service of over 20 years can receive a special award of 10 days’ paid leave.
ASIA AND THE MIDDLE EAST
Teaching is considered the most important thing a person can do. The manager’s role is seen as that of a teacher and facilitator—someone who helps those around him learn. For instance, in Asian corporations, particularly in Japan, the manager is always present when a subordinate is being trained. This indicates that the manager believes the learning is important. In these cultures, it is important for an employee to be seen as a whole person—with needs beyond professional and technical ones. This is also true for Africa.
SCANDINAVIA
Employees have a voice in management decisions, particularly those that relate to compensation, safety, and capital expenditures. Training begins when employees start new jobs. It is also important to incorporate new employees into the corporate culture.
SWEDEN
Management is based on the premise that the individual is willing and able to do a good job. A Swedish manager is generally thought of as a coach who motivates staff, leads employees through principles of cooperation and agreement, and is a good listener. Getting emotional when discussing a problem is considered inappropriate. All employees have the freedom to make decisions and solve unexpected problems without asking permission from superiors. Sweden has a high rate of employed women and a reputation for having a high ratio of family-friendly men who are seeking a better integration of work and family. Therefore, there is a broad acceptance of home-based telework.
AUSTRALIA, AUSTRIA, GERMANY, FRANCE, AND BRAZIL
Employees with one year of service are automatically given 30 days’ paid vacation.
LATIN AMERICA
Companies are very concerned about the family and family values. When companies hire a person, it’s as if they are hiring the entire family.
RUSSIA
Money is the most important factor in determining whether a Russian will take and keep a job—but it is not the only one. Russians want benefits such as pension plans, health care, regular performance reviews—and lunch. In Soviet times, most offices had a cafeteria, which offered a modest midday meal for a pittance.
The worker trends discussed in this section affect organizations everywhere and increase the challenges of connecting workers to the strategic business objectives of the organization. The transformation will have a significant impact on management, essentially requiring managers to look at their human resources as they affect the strategic issues of the business, and to consider how different parts of the business link together and what role people play from top to bottom.
These trends mean thinking out how the “people element” adds value at every stage of the organization, and the factors that both enhance and dilute value—focusing on the broader business outcomes that the organization is trying to attain. This strategic shift comes at a price: Management will need to better value their people and become better skilled in hiring, motivating, and keeping them in more competitive times.