Listening to the Voice of the Employee: How Marketing Tools Can Increase Satisfaction While Reducing Costs

Many of today’s leading corporations have streamlined processes and improved product quality by listening to the Voice of the Customer (VOC) to determine those elements that are Critical to Quality (CTQ). The results for these companies have been increased sales, higher margins, and lower costs. Management disciplines like Lean and Six Sigma have brought quantitative and qualitative focus to the goal of aligning company and customer.

Applying the Marketing Model to HR

Most HR organizations are beginning to view their roles as one not unlike that of the sales and marketing group down the corporate hallway. Culture, environment, and rewards make up a complex ”product,” with each element having cost/value drivers, process and delivery components, and even ”shelf life” (flexible spending accounts, for example).

Companies seek to attract and retain employee ”customers,” often in a highly competitive environment and against a backdrop of changing economic conditions and government regulation. The idea, just as it is with sales and marketing, is to create the employment “product” so that it best reflects both the wants and needs of the workforce and the strategic objectives of the enterprise. The “sale,” though not expressed as an overt buying decision, is reflected by satisfaction metrics, reduced attrition, and lower employee acquisition costs.

So how does the HR organization capture the CTQs from the Voice of the Employee? For time and space considerations, we’ll confine the remainder of this discussion to rewards components, although cultural and environmental aspects are extremely important as well.

You Won’t Know Unless You Ask

A FORTUNE 500 company recently told me that their biennial employee survey was sufficient in providing feedback on employee satisfaction, attitude, and engagement. But with voluntary turnover in the United States exceeding 23%, (US Dept. of Labor, Bureau of Labor Statistics for the period ending 08/2006), statistically this means that potentially half of this company’s employees weren’t even on the payroll when the last survey was taken.

Can you imagine this company waiting two years for customer feedback about its products? Or its service? Can you see them operating the company’s customer service call center for two weeks every couple of years for customer input? Of course not. But in many ways, the employee customer requires as much attention as does the revenue-generating customer.

To provide that level of attention, an employer must go directly to the workforce for feedback. And they must do so often enough to identify value “misalignments,” and achieve continuous improvement.

Identifying Value Misalignments

Whenever the employee “customer” puts a significantly lower value on a particular company benefit than on other rewards components, there is a misalignment in perceived value.

There are two main reasons for these misalignments. The first is that the employer too often relies on “industry” data in determining a particular reward to made part of the offering. One company we are familiar with saw data suggesting that providing employees with legal assistance would be highly valued, and would help make the employer more competitive among job seekers. But after two years of expense and administration, internal survey and usage data clearly showed that employees valued this benefit least of those provided – and by a large margin. It just didn’t fit this employer and this workgroup.

The second reason for value misalignments is a bit more complex. The lower value placed on a particular benefit may arise from lack of awareness, a lack of understanding, or both. It is no wonder that with today’s flexible spending accounts, various savings and retirement vehicles, consumer-directed health care options, complicated formulas for co-pays and deductibles, employee customers often fail to understand exactly what their employers offer. In what seems to be every company and every provider’s rush to provide people with “choice,” we see employees who are overwhelmed and under-informed. The result is often a sub-optimal choice, benefiting neither employee nor employer. The company’s survey or focus group approach must be constructed to yield specific data that identifies both the misalignment and the level of understanding of various benefits components so that the underlying cause can be addressed.

The potential payoff for the company that understands these factors can take different forms – and can be substantial. Obviously, there is the prospect of finding undervalued benefits dollars that can be pocketed or applied to other rewards. In addition, where a particular benefit aspect is highly valued, there is the possibility of obtaining additional contributions from the employee customer without affecting satisfaction – similar to asking consumers to pay more for a higher-value product. Employee feedback that is quantitative and actionable will help the employer find the right combination of contribution and satisfaction.

Achieving Continuous Improvement

Speed, efficiency, and quality result when companies apply Lean and Six Sigma disciplines to the systems and activities that produce their products and services. Continuous improvement is not just a goal, but an ongoing process that is part of the very fabric of the enterprise.

So how does listening to the Voice of the Employee feed continuous improvement in HR activities?

First, a quantifiable understanding of employee customer value drivers allows an employer to see and respond to changes in rewards dynamics. We see, for example, that there is an increasing gap between the choices made by older and younger employees with regard to health care and savings/investment options. In addition, the balance between health and wealth concerns has now become very important, as a more holistic approach is being taken regarding how employee customers want their benefits dollars used.

Simply reflecting demographics in rewards offerings will not lead to higher satisfaction numbers. Whenever possible, employers should seek preference data that, when combined with demographics, shows a path to effective alignment.

Second, the activity of asking for feedback in itself, if executed properly, promotes a feeling of connection and employer concern among employee customers. Avoid questions with plain-vanilla response choices, such as “satisfied”, “somewhat satisfied”, “dissatisfied”, etc. In themselves, these responses have no depth, nor are they useful for indicating the effect of remedial action if taken.

For example, if your matching 401(k) contribution moves from 3% to 4%, you won’t see how many respondents would move from “somewhat satisfied” to “satisfied” (if any) until another survey is done. Even then, you wouldn’t know that a move to, say, 3.5%, would not have had the same effect. Also, don’t avoid controversial subjects. If your company has closed its defined benefit plan and is now is defined contribution only, quantifying feedback in this area will help you gauge the depth of dissatisfaction and attrition risk. Again, choose survey tools that let you understand both qualitatively and quantitatively the employee customer’s preferences.

Finally, don’t be reluctant to seek feedback often. The reluctance stems from experience with surveys that were long, complicated, often covering a multitude of subjects and with poor completion/response rates. Sales and marketing folks, on the other hand, have the advantage of gathering continuous feedback from today’s sophisticated CRM systems, call centers, and field sales intelligence. However, by using some of today’s new technology, valuable feedback can be obtained that requires only a few minutes of the employee’s time and without dozens of questions. Some of this technology is in the form of Software-as-a-Service (Saas) solutions that involve no investment in hardware and software, are easy to set-up and use, and integrate seamlessly with other HR systems. Perhaps even more important, the employee must have a sense that the questions are “really about me”. Our work has shown us that if people are asked for thoughtful and meaningful feedback on subjects central to their working lives, they will not only respond honestly and completely, but will be willing to do so on a regular basis.

Summary

Recent studies have shown that employee dissatisfaction is on the rise, particularly in the first year of employment. The primary reason: the treatment by and the attitude of management. Asking employees about their wants and needs on a periodic basis may be the most sincere indication of management interest and concern. Whether it is sales, or now HR, relevant and actionable data drives your enterprise forward. Consistently gathering CTQs from the Voice of the Employee will promote employee satisfaction and help manage rising benefits costs.