Alexandra Powell
The businesses that are most successful, especially among desk-based organisations, are those that find a way to engage with a range of their employees’ needs.
But a successful engagement strategy doesn’t just appease employee whims without leading to concrete outcomes; nor does it mean boosting business performance without aligning the goals of the company with the goals of the people that work there.
Meaningful success means ensuring that improvements in employee engagement go hand in hand with improvements in business outcomes.
It’s true that employee engagement and business outcomes do correlate overall – but this is not necessarily the experience of each individual organisation. Of the companies that responded to our Economic Value Study survey, a number of distinct segments emerged, demonstrating different approaches to the benefits and engagement offering.
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For the purposes of this study, respondents were split first into two groups, desk-based and frontline, based on how and where employees are doing their work. From there, we further split these organisations into four additional categories that describe their relationship between business performance and engagement results: low performers, appeasers, drivers and leaders.
Read on to learn more about how these categories look for desk-based organisations, and stay tuned for a similar deep-dive into frontline organisations.
Low performers
These organisations represent a small minority of respondents who reported low business performance and low employee engagement, regardless of the benefit and engagement package offered. Because of the small number of organisations in this category, as well as the lack of correlation between what they offer and the performance they report, it is likely that this segment represents businesses that are facing significant challenges unrelated to employee engagement.
Drivers
These organisations seemingly put less focus on benefits and engagement than other organisations, offering fewer benefits on average than other segments. As a result, they tend to report lower scores across most employee engagement metrics, with turnover rates higher than most other groups, customer NPS lower than other groups, employee NPS lower and growth rates that generally fall between leaders and appeasers.
Desk-based Drivers: Less compensation, more culture
Among desk-based organisations, Drivers tend to focus on employee engagement as a goal, with 52% listing this as among their people team’s top three priorities.
However, many in this group may not be giving enough thought to motivations that drive an employee to feel more engaged. In particular, there is a striking lack of emphasis on both employee wellbeing and employee experience – neither of which appear in the top three priorities of their people teams.
This is reflected in the types of benefits they tend to offer. Compared to Leaders, desk-based Drivers are consistently less likely to have health and wellbeing plans, employee recognition platforms or any benefits focused on learning and development. Cash bonuses are one of only two types of benefit that desk-based Drivers are significantly more likely to offer than their Leader counterparts.
The other is enhanced parental leave. Desk-based Drivers may be more obliging when it comes to subsidising extended time off for new parents; however, they are also far less likely to offer remote working options, meaning a significant lack of flexibility and support for parents beyond the first year.
Both of these attributes demonstrate a focus on incentivisation via financial means in ways that may not take fully into account the needs of their staff. This speaks to the reasons why this segment may struggle to engage with its employees.
Ultimately, companies in this segment would do well to realise that there is a difference between employees feeling well-compensated and feeling motivated.
Cash rewards can play a vital part in making workers feel appreciated, but it does comparatively little to cement a company culture, ensure employee wellbeing or keep talented employees from taking more lucrative opportunities. After all, cash is fungible, and equal bonuses of this type are indistinguishable from one employer to another. It is perhaps no wonder, then, that this desk-based segment sees the highest turnover rates on average.
Appeasers
These organisations offer fantastic benefits packages, but lack a cohesive strategy in doing so. As a result, they enjoy good employee engagement scores, but low customer NPS scores. They have lower turnover than drivers, but also have the lowest reported growth rates on average. These organisations tend to be desk-based, with financial services and professional services particularly highly represented.
Desk-based Appeasers: A need to align motivation with performance
Desk-based Appeasers would seem to make great employers. On average, employees working at these organisations are more likely to be offered almost any benefit than those in any other segment.
Despite this, they tend to score lower across most employee engagement and business metrics. In particular, while they report employee wellbeing in line with Leaders, as well as strong communications and cultural alignment, they underperform when it comes to ensuring employee development and business growth.
Most tellingly, these businesses perform poorly on some metrics that can be considered markers of reputation, reporting the lowest customer NPS and longest average time-to-hire of any segment.
This all paints a picture of a group of companies that place a large emphasis on employee wellbeing, perhaps even to the detriment of customer service, business performance and market reputation. However, it also begs the question – how is the Leading segment able to maintain higher levels of engagement without offering such a well-rounded benefits package?
Leaders
These organisations succeed in achieving positive outcomes for both their employees and their business through a well-planned benefits package. These businesses have the lowest turnover rate, the lowest time-to-hire and the highest customer NPS of all, as well as the highest growth rate.
Becoming a Leader requires a different approach for Drivers compared to Appeasers, and the kind of strategy that works for one will not necessarily work for the other. So, how can organisations use their benefits packages to improve outcomes?
Desk-based Leaders: Striking the balance between financial and non-financial incentivisation
For desk-based organisations, one feature that separates Leaders from Appeasers and Drivers is their pay strategy. Ultimately, they are more willing to remunerate their employees at above-average levels, and this may go some way to explaining their success across the whole gamut of engagement metrics.
One might be tempted to try to find budget to increase key salaries, but the cost of overall pay raises is often much higher than a redistribution of benefits. Additionally, pay does not explain the breadth of the divide between Appeasers and Leaders when it comes to employee engagement. Drivers also exhibit similarly high pay at certain levels. It is worthwhile to look at which types of benefits Leaders sacrifice in favour of higher average pay when compared to Appeasers.
There are wide gaps in coverage between Appeasers and Leaders when it comes to addressing physiological and wellbeing needs, as well as methods for ensuring flexibility in working. By comparison, there is no significant difference in the level of financial flexibility, self-esteem and self-actualisation benefits offered between the two segments.
The effect that food vouchers or wellbeing schemes could have on an office worker’s basic needs can be mimicked effectively by a thicker pay packet; however, the effects that L&D benefits, recognition programs and similar self-actualisation regimes have on an employee’s sense of purpose, appreciation and belonging cannot be replaced in the same way.
For desk-based workers, then, these are the key areas of focus. Assuming – as most employers of skilled workers would – that people’s basic needs can be met through a competitive salary, a benefits program should focus on other areas of employee engagement; doing so means focusing on appreciation and purpose as key drivers of motivation.
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