Employee Survey Timing – When is the right time to conduct an employee survey?
Many employers wonder about when and if they should conduct an employee survey. They wonder about macro events and micro events impacting their organization and employees. They worry if they have the timing right or if this is the right time to survey employees. In fact there were a couple of strong views on conducting an employee survey during the economic downturn. Some felt you should continue to survey your employees while others thought that you shouldn’t.
Before we tackle some of the questions above let’s consider some information.
- 1. People expenses typically make up 20 to 70% of revenue.
- 2. People expense is usually a top three expense for most organizations .
- 3. Most organizations have key indicators they track for the most significant aspects of their business.
- 4. 93% of high performing organizations (HPO’s) measure employee engagement, compared with 79% of lower performing organizations. In this economy in particular, engaging the workforce is of paramount importance. *
- 5. 93% of HPO’s utilize employee engagement surveys rather than other types of surveys (satisfaction, loyalty, etc.), compared with 78% of lower performing organizations.*
People – Expense or Investment
The truth is that people costs are considered expenses when it comes down to the accounting and the bottom line. What differentiates high performing organizations from lower performing organizations is not how they account for people costs but how they “think” about people costs.
Most organizations somewhere in their corporate mantra talk about people being the most important asset. What matters is how they actually “think” and “act” when it comes to people.
Let’s walk through a hypothetical scenario of two organizations. The first organization we will refer as People Power (PP) and the second we will refer to as the Cost Busters (CB). Both organizations compete in the same industry and people expenses are typically 50% of revenue. We are going to assume both have the same initial productivity and cost structure. The economy has taken a dip and both PP and CB have called their executive teams together to brace for the economic storm.
What do organizations do in stormy times? Usually the first goal is to conserve cash. They delay costs and try to maximize assets to generate revenues while reducing expenses.
PP and CB – Before the Storm
Sales $1,000,000
People Costs $500,000
Profit $100,000
Employee Engagement 65%
Employee Productivity 72%
Employee Survey Cost $5,000
The Storm
Sales have dipped 15%
CB – To weather the storm
CB executive team has decided to cut costs and have decided not to conduct the annual employee survey. This has saved them $5,000.
Sales $850,000
People Costs $459,000 - $5,000 (survey cost) = $454,000
Profit $56,000
Employee Engagement 60%
Productivity 66%
At CB the executive team was not aware of some issues impacting the employees and did not realize that it was impacting employee engagement and ultimately employee productivity. The end result was a 6% drop in employee productivity that resulted in additional employee costs impacting the bottom line.
PP – To weather the storm
PP Executive team has decided that employee productivity and employee engagement is critical during these times and they plan to continue to focus on employee engagement.
Sales $850,000
People Costs $408,000
Profit $102,000
Employee Engagement 68%
Productivity 75%
At PP the executive team understood the issues facing employees and used the information to continue to work on increasing employee engagement. The end result was a 3% gain in employee engagement leading to a 3% gain in employee productivity. The 3% gain in productivity resulted in a reduction of 17K in employee expenses.
Summary
CB failed to realize the impact that decreased productivity had on the bottom line. Although this is a simple example it shows the importance of engaging your employees. PP truly saw their employees as an investment and a competitive advantage. CB saw their employees as an expense and cut costs only to drive up other costs.
Employee Survey Timing
Now that we have explored the concept of employees as an investment rather than a cost we can now answer the question, “When to conduct an employee survey?”
One more question before we answer the question around timing for the employee survey. Do you not perform and report financials because you know the results are going to be bad?
Well with such an important metric of employee engagement, the same principle applies; you must measure employee engagement all the time on a regular and consistent basis. With employee costs being a big driver to financial performance, we need to have a regular pulse on one of our most important assets – people. Secondly, the people component of organizations is becoming the competitive advantage and we need to continue to work on improving and increasing employee engagement.
Those who were proponents of not conducting an employee survey during the economic downturn just don’t grasp the purpose of conducting an employee survey. A well thought out employee survey – an employee engagement survey helps organizations maximize one of the organizations top expenses….people. Why would you not want to maximize productivity during a downturn?
To sum up the answer….the employee survey should be conducted regularly and be a component of the organization’s culture. The employee survey should be conducted during good and bad times. The employee survey should be an employee engagement survey designed to measure employee engagement. And finally organizations have to “think” and “believe” employees are more than costs, that employees are their weapon in competing in the business arena.
*HR metrics: What do high-performing companies track?, Erik Samdahl, May 5, 2009
Employee Engagement Information