The importance of being social

In today’s challenging economic
conditions, the ability to attract and retain talent is obviously an important
factor for any business. And an increasing number of industry
leaders now believe that talent, not cash, is king. They believe we are witnessing a paradigmatic shift where human capital is more
important than financial capital. For them, the world is entering a new era,
one requiring the redesign of business models, a redefinition of value
propositions and the reinvention of social systems, where it matters less if
countries and companies can access the capital they need and more if they can
attract the talent they need to win.

Klaus Schwab, founder and executive chairman of the
World Economic Forum, believes the old model of capitalism is being
replaced by the new model of ‘Talentism’. This new model centres on human
talent that encourages creativity, entrepreneurship and innovation-driven
economic development and social progress. Schwab argues that capital is losing
its status as the most important factor of production in our economic system
and is being superseded by creativity and the ability to innovate. Just as
capital replaced manual trades during the process of industrialisation, so
capital is now giving way to human talent.

Similarly, Manpower Group, a global leader in workforce solutions,
believes the world is now entering a Human
, where employers
will be awakened to the power of humans as future drivers of economic growth. And
in this Human Age access to key talent will become the key competitive

Attracting and retaining talent,
therefore, is now seen as the key to economic success. In line with this, many commentators are recognising the importance of employee
engagement in retaining this talent. Research by Gallup
has shown that engaged employees are more productive and increases in employee
engagement results in lower staff turnover, reduced costs and higher
productivity. Engaged employees work harder, are more willing to take on extra
responsibilities and are a positive influence on other employees. Deloitte
has found that passionate employees are two times as likely (72%) to become
inspired and energised by unexpected challenges as the disengaged (36%).

At the same
time, attracting and retaining talent by offering more financial incentives is
not necessarily working anymore. Job satisfaction and creative autonomy it seems are more important
than salary in attracting and retaining talent in many cases. Daniel Pink, author of the
forthcoming book Drive: The Surprising Truth About What
Motivates Us
believes that people are increasingly driven by
intrinsic motivations such as the desire to do engaging work rather than the
desire to receive a bigger pay cheque.

There is now a lot of evidence to show that having engaged employees
leads to better business outcomes. Towers
found that companies with engaged workers have 6% higher net profit
margins, and Kenexa
research found that engaged companies have five times higher shareholder
returns over five years. Companies with high levels of employee engagement improved 19.2% in
operating income while companies with low levels of employee engagement
declined 32.7% according to Towers Watson. And research by the Corporate Leadership Council found that engaged organisations
grew profits as much as three times faster than their competitors. They report
that highly engaged organisations have the potential to reduce staff turnover
by 87% and improve performance by 20%.

The ROI of employee engagement comes from what NY Times bestselling author Kevin Kruse calls the Engagement-Profit
. For Kruse, Engaged Employees
lead to higher service, quality, and productivity, which leads to higher customer satisfaction,
which leads to increased sales (repeat
business and referrals), which leads to higher
levels of profit, which leads to higher
shareholder returns. Employee engagement has proven that it has a major impact on revenue
and profitability and as such employee
engagement should be the number one priority for any organisation.

2013 looks to be
an exciting year for a focus on employee engagement. The challenge is for CIOs,
HR Directors and CMOs to work together to create a truly engaging social business
that puts talent at the centre of the organisation. And as IBM has noted, a social business isn’t just about having a Facebook page or
a Twitter account. It’s about cultivating a spirit of collaboration and
community throughout the organisation—both internally and externally. IBM has identified three distinct
characteristics of a social business: 

A social business is engaged—deeply
connecting people, including customers, employees, and partners, to be involved
in productive, efficient ways.

A social business is transparent—removing
boundaries to information, experts and assets, helping people align every
action to drive business results.

A social business is nimble—speeding
up business with information and insight to anticipate and address evolving

A social business should allow people to connect with
each other and provide a variety of ways for employee engagement such as discussion
forums, comment sections in blogs and online polls. It
should allow forums to spring up to connect people in similar job functions or
expertise areas, peers to brainstorm ideas and post useful reference material
and allow employees to share their expertise via blog posts and forums. It
should be enterprise wide not based on fiefdoms and silos, essential to work rather than something extra and integrated with existing
collaboration tools and platforms. Some
of the
for becoming a social business include having
on the same system with a corporate directory; allowing employees to
personalise and customise user profiles and ensuring you have rich and varied
analytics to measure how well you are engaging employees.

In successful social businesses, social and
business functions intertwine and CIOs can play a pivotal role in this by providing
platforms that enable this process. There are many tools available on the
market. For example, Microsoft has acquired Yammer and will be including Yammer technology alongside Office 2013. Analysts expect it to be
integrated within the SharePoint on-premises and cloud-based products very
soon. Other leading social platforms include Salesforce.com Chatter, work.com and Socialcast. The
McKinsey Global Institute (MGI) 
estimates that by fully implementing
social technologies such as these, companies have an opportunity to raise the
productivity of high-skill knowledge workers including managers and
professionals by 25%.

However, according to separate research by both Microsoft
and McKinsey,
71% of employees are not engaged in their work and 36% of the work carried out
in the workplace is wasted. In addition, a study conducted by ACCOR found
that although 90% of leaders say employee engagement impacts on business
success, 75% have no engagement plan or strategy in place. This needs to be urgently
addressed because organisations that embrace the notion of a social
business have the opportunity to gain loyal employees and find a competitive
edge in recruiting, retention, talent development, and business performance.
And that’s definitely something to aspire to in 2013.

  • Theresa Clifford is Associate Consultant, Customer Engagement at digital marketing agency Cucumber and is a regular writer and speaker on digital trends. Most recently she wrote about the four big digital trends marketers need to pay heed to in 2013. 

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