BUILDING EMPLOYEE ENGAGEMENT FOR A BETTER FUTURE Sowjanya Kanuri PGP I Indian Institute of Management Ahmedabad INDIA

91% of Millenials expect to stay in a job for less than 3 years 25-34: 3.2 years 65 and over: 10.3 years Median: 4.6 years Service jobs: 3.2 years Management, professional and related jobs: 5.5 years Median tenure at a job Japan’s lost productivity due to unengaged workforce estimated at $232 billion annually 80% market value of firm from intangible assets (esp. workforce) in 2002 compared to 38% in 1982 Some interesting numbers… Employee turnover costs range from 20% to 213% of annual salary 4 out of 10 workers disengaged globally 59% HR professionals believe retaining and rewarding best employees will be firm’s greatest challenge

Models of organizational effectiveness Taylor theory (traditional) Employee engagement Self directed team Group of employees fully responsible for a work process Employee “ownership” Less involvement of top management Scientific management Rationalizing organizational behaviour through extensive and detailed task analysis, systematization, and routinization High degree of control Hierarchy important Physical, cognitive and emotional attachment to one’s job Higher commitment, involvement, productivity Measurable and can be correlated with performance

“To win in the marketplace you must first win in the workplace.” – Doug Conant, CEO of Campbell’s Soup “Your number one customers are your people. Look after employees first and then customers last.” -Ian Hutchinson, author of People Glue “The way your employees feel is the way your customers will feel. And if your employees don’t feel valued, neither will your customers.” - Sybil F. Stershic, Taking Care of the People Who Matter Most: A Guide to Employee-Customer Care. Moving towards employee engagement… And engaged employees in self directed teams..

Time to imitate an innovation has come down from nearly 100 years during the 19 th century to months – no longer a source of competitive advantage Increasing emphasis on execution over innovation and employees play the key role in this strategy Differentiation based on a superior workforce is becoming common as such companies enjoy lower absenteeism, lower turnover, higher productivity all leading to higher profitability EVOLVINGSTRATEGYEVOLVINGSTRATEGY

Case Study : 2002 employee attitude survey showed only half the workforce was engaged Improved employee engagement led to annual savings of $8.8 million from the drop in attrition and absenteeism rates at European plant and a 70% increase in output at Asia Pacific plant