Stress triggers employee exits

US - Workers rank stress as a top reason they would leave their company, but it is not even among the top five reasons that employers cited. Instead, employers cite insufficient pay and lack of career development and promotion opportunities and this lack of understanding limits their efforts in retaining staff. 

 

According to the 2007/2008 Global Strategic Rewards study by Watson Wyatt Worldwide and WorldatWork, when employees are satisfied with stress levels and work/life balance, 86% are more inclined to stay with their company (versus 64% when dissatisfied) and 88% are more likely to recommend it as a place to work (versus 55% when dissatisfied).

 

“Worldwide, the frenetic pace of modern business is taking its toll on employees,” said Adam Sorensen, global total rewards practice leader at WorldatWork. “There’s no question that employees are more likely to leave or speak badly of their workplace if they feel overburdened. Companies that take steps to ensure that stress levels are not onerous will save money in the long run by reducing attrition.”

The study also found that to attract, retain and motivate the best employees, companies must clearly communicate expectations about rewards and then deliver as promised. 69% of employees who say their employers succeed at delivering on the reward promise are committed to their company and motivated to help it succeed. These employees also are more likely to be top performers.

“Clearly setting expectations and delivering on the reward promise is a formula for having a dedicated, productive workforce. When workers see that their performance has a real impact on rewards and that management follows through, employees become more committed and confident about the opportunities with their employer,” Laura Sejen, global director of Strategic Rewards for Watson Wyatt said.

Employee/Employer Disconnect on Why Employees Leave Organisations

Rank	Employee View	Employer View
1	Stress levels (37%)	Base pay (52%)
2	Base pay (33%)	Career development opportunities (47%)
3	Promotion opportunity (26%)	Promotion opportunity (45%)
4	Career development opportunities (23%)	Relationship with supervisor/manager (35%)
5	Work/life balance (22%)	Work/life balance (24%)

 

 

HR heading towards a performance-rewards trend

Singapore – The future of HR towards retaining talent is heading into a more performance-rewards trend and there is a growing importance of giving good compensation and benefits as employees are now able to choose to join, stay or leave an organisation.

The top reason for employees leaving jobs is external inequity in pay. With the war for talent heating up, companies are steadily increasing their competitive standing to retain and attract high quality talent. High potentials also rank total compensation as the second greatest factor influencing their performance and 70% of employees from top rated employers see a significant correlation between improved performance and improved pay.

Nishchae Suri, head of Hewitt’s Talent and Organisation Consulting Analytics practice in Asia said, “As Asia’s markets become increasingly competitive, strong compensation packages now play a crucial role in the battle to attract, motivate and retain top talent. However many pay programmes still fall short due to a lack of high-quality benchmark data and because they do not adapt to changing business needs.”

In the past, compensation programmes were administratively driven by complex internally directed programmes. Compensation decisions were kept in the “black box”, and competitive pay posture was maintained by minimising costs and giving hierarchical promotions via entitlement mentality.

For the future, HR should be looking at a more business-oriented, strategic approach to compensation programmes. Organisations must head towards maximising return on compensation investment, differentiating and rewarding performance based upon simplified, market-based, externally focused programmes. Companies have to be more open about compensation decisions to improve the effectiveness and competitiveness of their compensation programmes.

Types of rewards commonly used by organisations in Asia are Individual Performance Awards, Special Recognition Awards and Long Term Incentives. The most uncommonly used rewards are Gain Sharing/Productivity Awards and Cash Profit Sharing Awards.

Type of Rewards in Asia

	China	Hong Kong	India	Singapore	Sri Lanka
Individual Performance Awards	65%	45%	76%	70%	87%
Special Recognition Awards	39%	45%	48%	42%	33%
Long Term Incentives	35%	43%	54%	36%	40%
Gain Sharing/Productivity Awards	17%	10%	15%	6%	0%
Cash Profit Sharing Awards	16%	2%	18%	9%	0%

 

Source: Hewitt 2007-2008 Salary Increase Survey in Asia

 

Sales execs have no love for HR

Singapore – More than 70% of HR executives believe they have a solid strategic partnership with the sales department but only 45% of sales executives surveyed shared the same sentiments, according to a Mercer study.

There are barriers to building this partnership as the two functions perceive the role of HR quite differently. Most sales executives rated HR as a basic support function than as a strategic partner in business.

HR assists sales predominantly with traditional tasks, such as recruiting (85%) and compensation (78%). But value-added HR activities, such as performance benchmarking (34%) and training (40%), is performed significantly less.

When sales executives were asked why they did not seek more support from HR, 44% responded that they preferred to perform the task themselves. Others claimed that HR does not understand the sales function well enough (38%) and lacks the skills necessary to perform the tasks (15%).

David Heazlett, Global Head of Mercer’s Sales Effectiveness team, said that companies and sales teams that engage HR as a strategic partner, opposed to limiting its support to basic functions, will ultimately be in a better position to benefit financially.

“Sales has the most measurable impact on revenue and forming a partnership with HR can positively affect a company’s financial performance. The bottom line is that if sales is to achieve a richer and more value-added relationship with HR, the two will need to move beyond the status quo, to shift HR from being a mere provider of recruiting and compensation functions, to using its expertise in areas such as managing change, assisting with organisation design, coaching and training - impacting the bottom line,” Heazlett said.

Heazlett said that HR leaders who are already under pressure to contain costs, overcoming challenges such as the lack of talent and financial resources proves to be an uphill climb. “We acknowledge this issue is easy to describe, but much more challenging to implement,” Heazlett added.

 

Prevalence of HR supporting Sales

	% of Sales Execs Citing HR Support
Recruit and Hire Salespeople	86%
Design Compensation Plans	78%
Administer Compensation Plans	72%
Identify Key Skills or Competencies	70%
Identify Best Practices	48%
Train Salespeople	48%
Analyse or Benchmark Salesperson Performance	34%

 

Source: Mercer

 

Singapore employees driven by strong sense of customer focus

Employee engagement can help bolster the financial performance of a company, a WorkAsiaTM research study by Watson Wyatt Worldwide found.

 

From the WorkAsiaTM findings, it found that engaged employees tend to understand their organisation’s business goals, the steps required, how their contribution generate results, as well as having a strong desire to participate in the company’s success.

The study also helped pinpoint the areas of improvement so as to encourage employee engagement and productivity, thus increasing the company’s financial performance. The top three drivers of engagement among Singapore-based employees would include customer focus, compensation and benefits, and communication.

"The WorkAsiaTM study tells us that forward-looking organisations are replacing one-size-fits-all offerings with programmes that target their most valuable employees. These efforts enable them to create a more productive and stable workforce," said Russell Huntington, director for Human Capital Group, Asia-Pacific.

 

Key findings	High engagement	Low engagement
Agree that decisions made by their organisations are done with customers’ best interest in mind	94%	36%
Agree that management of their companies do a good job of justifying major decisions	88%	17%
Agree that they are paid fairly as compared with other people in other companies who hold similar jobs	74%	17%
Agree with the HR effectiveness at their company	67%	11%

 

 

Companies get in with young recruits

UK – With the talent crisis, ageing workforce and increase in global worker mobility, there is a rising need for organisations to understand their young target recruits. 2,739 new graduates from China, the US and the UK were surveyed about their view and expectations of work.

Due to the anticipated rapid pace of change for businesses in the next decade, there will be an increase in transference of expertise across the regions. And this reflects in the survey as 94% of respondents believe that they will work across geographic borders more than their parents did. With mobility programmes among organisations on the rise, 74% of respondents also believe that they will work in a mix of locations. Only less than 5% of respondents think that they will work mainly from home.

The boundary between work and home life will disappear as companies assume greater responsibility for the social welfare of their employees with 75% of respondents think that workplace flexibility will not exist. They believe they will be working regular office hours. With more than 80% of respondents looking to actively seek out employers whose corporate responsibility behaviour reflects their own, there will be a need for organisations to adapt their business strategy according to the environmental agenda.

With many organisations developing suitable performance reward schemes and compensation and benefits packages to retain talent, the good news is employee loyalty remains somewhat high as 79% of respondents believe that they will only have between two to five employers throughout their career. “We are developing an employer brand reflecting our identity as an employer and promoting our long term commitment with our employees.” Hughes Fourault, Global Head of Compensation, Benefits and International Mobility, Société Général.

There is a significant opportunity for the HR function to really own the people management agenda within organisations, to truly drive strategy and have the tools and information to become one of the most powerful and influential parts of the business operation. But complacency and a failure by HR to take the lead could result in the function being outsourced almost entirely, or absorbed by line managers or into other functions such as finance or marketing.

“HR needs to ensure it is fit for purpose in order to be proactive and maintain or develop its influence in the future.” Keith Murdoch, Remuneration and Benefits Manager, British American Tobacco.

 

		Total	China	US	UK
Do you believe you will work across geographic borders more than your parents did?	Yes	93.9%	97.2%	92.1%	92.9%
Do you envisage using a language other than your first language at work?	Yes	52.7%	89.4%	32%	35.3%
Will you deliberately seek to work for employers whose corporate responsibility behaviour reflects your own values?	Yes	86.9%	87.2%	90.2%	71.2%

Source: PricewaterCoppers Graduates Survey Findings