Leaders Hold The Power to Engage: I recently came across an article in my local newspaper, The New Zealand Herald, entitled 70% of Workers Thinking of Quitting.  In it, a local recruitment company quotes a study they carried out with 10,000 employees in Australia and New Zealand in which 70% of employees say that they are considering moving jobs.  About 60% of respondents also say they feel they deserve a salary increase. The article seems to hint that employee salary expectations and thoughts about changing jobs are linked.  Accompanying the article, the NZ Herald put an online poll, for which the question was “How do you feel about your salary?”  I couldn’t help thinking there was something missing.

For many years, I have read articles and studies that consistently show that salary is not the #1 factor in job satisfaction, nor employee retention.  People want to spend eight hours of their day deriving some kind of meaning and genuine satisfaction from their work.  They want to enjoy their relationships with others and be part of a workplace culture that values connection.  They also want opportunities to learn and grow; not just technical expertise that enables them to be better at their jobs, but also learning experiences that enhance their lives.

The focus on salary in that recruitment survey seemed a little one-dimensional and the link between the two questions seems specious to me.  It is like the person who, when asked why they keep wearing those old hole-y socks replies that it keeps the elephants away and when told there are no elephants around, says, “See? They work.”

The Executive General Manager of the recruitment company who carried out the study suggests that businesses “fine-tune their recruitment strategies to find and retain high-performers who can make the biggest difference to the bottom line.”  All good advice, and to my mind, recruiting and retaining excellent staff is not just about the $$ figure attached to a position.  He goes on to say, “There’s also an opportunity for smart employers to think beyond just the salary and offer attractive, tailored remuneration packages to individual employees.”  Again, to my mind, still something missing.  I don’t want to say that the survey was wrong in its findings, I simply want to suggest that there is lots of information missing before we can come to a categorical conclusion about the reasons for people wanting to jump ship.  To my mind, thinking about keeping staff on board is not purely about money, nor about “creative remuneration packages”.  They certainly help, but they are only part of the big picture and I believe that, even if people have an acceptable salary and are given free car parks and gym memberships as sweeteners, poor management will be a far more influential factor in staff turnover and low engagement.

As I read that NZ Herald article, another study, by Dr. Rhema Vaitianathan of Auckland University’s Business School, sprang to mind.  Dr. Vaitianathan produced a comprehensive study in 2011 in which she found that NZ managers were amongst the worst in the world for retaining and promoting good staff.  Her results focused on the leadership failings of NZ managers.  While her study showed NZ managers as being particularly lacking in effectiveness and leadership skills, I note from this article in Human Capital Online that talent management company DDI carried out an international study showing that bosses right round the world are seen as poor leaders.

The director of DDI UK and one of the authors of the report says, “Workers report that managers fail to ask for their ideas and input, are poor at work related conversations and do not provide sufficient feedback on their performance, so it’s no wonder employee engagement levels are low. Leaders remain stubbornly poor at these fundamental basics of good leadership that have little to do with the current challenging business climate.”  Just as I thought, it’s the world over, not just in New Zealand.

The time has come for us to look at our world through a systems thinking lens.  I think if you ask people, “Is your salary enough?” most would probably say no.  It is too narrow a focus, however, to say that employee engagement is therefore linked to salary expectations.  To take a systems thinking perspective means we stop looking at phenomena through a narrow zoom lens, but we use the wide-angle lens and take account of the many factors that influence engagement at work.  Systems thinkers don’t just focus on one dot and try to make meaning of it; they look at the many dots and connect them.  Systems thinkers know that events and phenomena are rarely one-off or disconnected and look for patterns within the whole system, not just one part of it.  So with the issue of retention, a systems thinker will look for other reasons why 70% of staff are thinking of changing jobs, not solely remuneration.

When study after study around the world indicates that, on average, about 20% of a workforce is actively engaged and 20% is actively disengaged (actively bad-mouthing their workplaces), there is enormous potential to tap into the remaining 60% who are not engaged but could be.  As I said, salary is one component, but it is only part of a wider system.  For many managers and organisations, this can come as a bit of a relief in these times of economic austerity.  Even though salary and bonuses are probably the most expensive ways to increase retention, they are sadly the first and only things that many managers default to.  There are ways to generate greater engagement and it is not simply by raising salaries: it is by investing in developing leaders.

In a 2009 study on employee engagement for the UK government, Will Hutton, Executive Vice Chair of the Work Foundation is quoted, “We think of organisations as a network of transactions. They are of course also a social network. Ignoring the people dimension, treating people as simply cogs in the machine, results in the full contribution they can make being lost.”  To me, it follows that employment is not simply a transaction.  To think of a recruitment or retention strategy solely in terms of financial reward is too mechanistic, too transactional.  Employment is a relationship, not a transaction.

In that 2009 study, the authors, David MacLeod and Nita Clarke, state very clearly, the “joint and consequential failure of leadership and management is the main cause of poor employee engagement”.  So in order to ensure that recruitment and retention strategies have any chance of success, they must sit alongside action on leader development.  It’s not a cliché for nothing that people join good organisations and leave bad managers.  MacLeod and Clarke point to four key factors that can contribute to increased engagement: leadership, engaging managers, voice and integrity.  Leadership emerges when leaders at all levels of organisations provide a compelling story and vision that is worth signing up to.  Engaging mangers are those who have developed themselves sufficiently to be able to empathise with staff, provide useful ongoing feedback and are available to provide guidance to people.  Voice is important because in the modern workplace, people want to be heard.  Managers who listen well and regularly act on what they hear have a major impact on morale, and people who feel listened to will also feel valued and trusted.  Finally, integrity comes about when people see managers and leaders act consistently and line with a clear set of values.  They will come to trust managers who do this and trust engenders commitment.

Being mindful of my call to think systemically about things, I am sure that there are other factors that I’m missing and which are also influential in ensuring the further recruitment and retention of good people.  Accordingly, I look forward to hearing from others who wish to add in and expand this conversation.

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