Retaining Talent: can CCI provide the missing corporate glue?
February 01, 2002
February saw the London launch of Experience Corps, a new £20 million government-backed initiative to persuade a quarter of a millionmore of Britain’s over 50s to volunteer by 2004 (http://www.experiencecorps.co.uk). The scheme follows a big push last year through the BBC-backed TimeBank to promote the value of giving time among a new generation of volunteers (http://www.timebank. org.uk). This one runs alongside David Blunkett’s Millennium Volunteers for 16-24 year olds (http://www.millenniumvolunteers.gov.uk) and Home Office-funded online brokerage service (http://www.do-it.org.uk.). Long-standing agencies such as Community Service Volunteers report continuing strong interest, for example with a 50% increase in participation in last year’s Make a Difference Day (http://www.csv.org.uk). About half of us already volunteer at least once a year, or so we tell surveys. The latest, a Body Shop study in February, found levels highest in Scotland (55%) and lowest in the Midlands (37%).
Trends, and counter trends On behalf of companies I have been studying trends in human resource management since 1993, looking especially at the business case links with corporate community involvement and wider social responsibility.## For all that time, proponents have championed the merits of employee involvement as a HR tool. Unfortunately, for equally as long, the fundamental trends in the labour market have been running strongly in the opposite direction. First came mass unemployment and deindustrialisation, the end of ‘jobs for life’; then growth in part-time and temporary working. Flexibility led on to delayering and huge pressures to increase productivity, often through long hours. Outsourcing and use of agency staff for support services such as cleaning is now extending to core functions too, including call centres and finance functions, with ICT making possible their wholesale relocation to the other side of the globe. The idea of the large stable employer, at the heart of the community, as a catalyst for community action seems a relic of a by-gone era. And yet, it is precisely the force of these huge changes that is spurring some forward-thinking HR and community affairs managers to examine the business case question more closely.
Researching the impact of CCI
Our latest research, now drawing to a close, is looking at the impact of CCI on employee attitudes. Nine companies1 came together to work with The Corporate Citizenship Company. The project builds on two earlier pieces of research: the first developed a theoretical approach to measuring HR benefits; the second documented the results when applied among 18 companies. Five main labour force trends stand out.
The huge growth in outsourcing and agency staff means that on any one site or large office, many people will be working together without sharing the same employer. Use of agency temps has more than trebled over the last eight years, with more than 1.7 million people now on temporary contracts of all kinds. For CCI managers, that means reexamining the ground rules for employee involvement programmes. The logic of team-building activities, time-off schemes and matched fundraising is to move towards a sitebased approach, with contractors joining in too. Ultimately this may mean making it a contract condition, alongside the usual quality, health and safety controls.
Another trend is the breakdown of the implied contract, which started with the shift from ‘a job for life’ to ’employability’. Today the competencies needed for a lifetime in flexible work are the ‘softer’ people-orientated skills – teamworking, communication, leadership – rather than specific technical skills. Volunteering and community-based involvement can grow the former, less so the latter.
The latest undermining of the implied contract comes from the withdrawal of final salary pension schemes. Until now, however tough the working environment, it made sense to stick it out and get the guaranteed pension. First new employees were excluded, now existing ones are too. If employees’ pensions are limited to defined contribution portable money purchase schemes, why not take the money and go, more and more will be asking.
Staff retention is now THE critical HR issue for many firms. The costs of replacing individuals is huge, around half their annual salary in many cases. Our research with MORI (see interim findings in Briefing issue 52) looked at ‘pride in the company’, both factors which increase it and the business benefits arising. From it we found that one in five employees (19%) says CCI has a great deal of impact and three in five (60%) say it has a ‘fair amount’ or a ‘great deal’ of impact. Pride affects actual behaviour. Overall nearly half say their motivation and likelihood of staying with the company are increased. Employees already involved or with existing knowledge of the company’s activities are significantly more likely to feel pride.
Workplaces are much more diverse too, with many more women – two million more joining the workforce over the last 15 years – and growing numbers from minority ethnic communities in a variety of job functions and across the country.
Alongside retention, day-to-day absenteeism is a growing concern, especially in pressured environments such as call centres where half a million people now work. Absenteeism is costly, estimated at £13 billion a year in the UK according to the Industrial Society.
Corporate glue
The result is a workforce rapidly loosing the ties that bind it together and keep it performing as a team. Urgently needed is a new corporate glue, to hold the company together and (to extend the metaphor) provide a bit of stickiness when someone gets itchy feet. Can CCI provide that? Our evidence suggests it can play a part, alongside wider social responsibility issues, but only once basic business issues such as pay, job satisfaction and fair treatment are properly addressed.
Can we show the bottom-line benefit and so demonstrate the business case? Up to a point. First, even modest reductions in staff turnover or sickness absence, for example, can yield big, measurable savings. Second, studies of mainstream HR practice have shown a direct impact of morale on sales and productivity. The Institute of Employment Studies found that a one point increase in employee commitment at a leading supermarket added £200,000 to monthly sales in each store. Companies selected for Fortune’s ‘Best Companies to Work For’ tables outperform their peers in stock market terms: by as much as three times in the case of the UK 50 best (1996-2000).
Success factors
For those seeking to use ECI as an HR tool, one practical problem must be overcome: ever growing ‘travel to work’ distances mean that identification with the local area around the workplace is likely to be weak. Long hours add to the challenge. The solution is highly flexible schemes – a single co-ordinated effort at one time, but with lots of scope to dip in and select different types of activity. The opportunity to participate in home areas too, perhaps through the new nationally-branded schemes, will be of growing importance.
In any case, our research has found you get many of the ‘advocacy’ benefits even where people haven’t (and don’t want to) participate themselves personally. They are simply happy the option exists.
At a time of intense change within companies, the usual success factors become even more critical: leadership from the top by senior management – ‘walking the talk’ – and consistency – ECI cannot be a ‘fair weather friend’. And that’s the paradox: just when it is hardest to keep faith with the community and act responsibly, the potential benefits of so doing multiply. More than ever, we need to ask what is the glue that holds companies together and keeps them performing.
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