The bottom line for crafting positive employee engagement

by David J Bilinsky

Don't you know that you're toxic ...

Words and music by C. Dennis/C. Karlsson/P. Winnberg/H. Jonback, recorded by Britney Spears.

What does “1-800-GOT-JUNK?” have that B.C.’s law firms don’t? For one, being named B.C.’s Top Employer – for the last 2 years in a row (per Human Resources [“HR”] Firm Watson Wyatt, as reported in the December 2005 issue of BC Business). In fact, you have to scroll down to #21 to hit Bull Housser & Tupper – the only B.C. legal employer to crack the top 25.

Nationally, law firms don’t do any better. Hewitt Associates named the list of the 50 Best Employers in Canada in 2005 (per the ROB in the Globe and Mail) – and only one law firm is found on the national list: Bennett Jones LLP in Calgary at #19. [The Best Employer in Canada was BC Biomedical Laboratories Ltd. of Surrey B.C.]

Based on the Watson Wyatt employee survey, 1-800-GOT-JUNK? stood out above the competitors in four key areas, being levels of alignment, capability, resources and motivation in an organization. “I’ve always said a great company is all about people,” said Brian Scudamore, the President of 1-800-Got-Junk? “This has been my belief since founding the company in 1989, and winning this award for the second consecutive year is proof that success comes down to the people.”

Why aren’t more law firms found on the list of best employers? Since the survey results come directly from the employees, this would suggest that the legal environment is more ‘toxic’ than that found in other organizations – and these results indicate that law firm management are not as ‘tuned in’ to the problem as they would otherwise believe. This has serious implications for the achievement of management goals. The Globe and Mail reports that top employers are better able to attract and retain key employees, workforce views are more closely aligned with those of leaders, and employees are more motivated to deliver on corporate goals, resulting in better financial returns.

Such benchmarking surveys across different industries provides useful insights for legal employers, as most law firms typically only compare themselves against other local law firms. Since the competition for talent today is world-wide, staff (including lawyers) realize that there are opportunities not only across the Province, but nationally and internationally as well. Several firms that I have spoken to have had employees move to international law firms (in New York, London and Hong Kong). Employees have less loyalty to their employers partly driven by the last few years where employers were willing to downsize and lay off employees. Today employers know that they must compete for talent. Accordingly the top employers know that they must focus on employee issues more than ever before – particularly as the boomers near retirement and they must now recruit and retain the “X”, “Y” and “Net” generations. In many cases, just coming to grips with the differing viewpoints, needs and attitudes of these upcoming generations presents problems for law firms where management is largely composed of boomers. People skills are required to bring everyone to a common focus and direction. The Best Employers “have a more motivated, engaged and responsive workforce, where employees both see and feel a connection between their own daily contributions and the success of the organization.”

Why should law firms care? After all, they are still able to attract employees and carry on business. Hewitt Associates has developed a concept called “employee engagement” that is not about creating ‘happy’ or ‘loyal’ employees, but about measuring the emotional and intellectual commitment employees demonstrate for the organization for which they work. According to Chris Howe, “Best Employers know that a highly engaged workforce provides a strategic advantage that will benefit them in working through any current and future human resources challenge including attraction and retention.” In other words, Employee Engagement=Competitive Advantage.

Here is the math (based on averages):

• The 50 Best Employers receive 45% more unsolicited employment applications than the other participating organizations;
• Full-time voluntary turnover rate for Best Employers is 8% vs. 11%;
• Part-time voluntary turnover rate: 12% at the Best Employers vs. 23%;
• 74% of senior leadership at Best Employers believe that their organization is investing enough to develop the next generation of leaders, vs. 65% at other participants;
• 64% of Best Employers’ senior leaders believe that their organizations have an excellent succession planning process for developing leaders vs. 46% at other organizations;
• The 50 Best Employers who are publicly traded have an average compound annual growth rate of revenue (averaged over their last five fiscal years) of 16.4% per annum, vs. 6.1%;
• When looking at average cash flow return (averaged over their last five fiscal years), Best Employers come in at 13.7% per annum vs. other publicly traded participants at 10.2%.

So how do you go about creating high employee engagement? Here are some of the suggestions:

• Leadership: Management communicates a clear course for the future and brings employees along for the ride: employees see the future, believe in it and understand what it means for them and their work. Leaders are also focused on developing their future replacements.
• Growth: Best Employers expect to grow and have created the organizational capacity to grow and transform themselves (they do not see themselves as being the same organization tomorrow as they are today). They have empowered the HR department to provide direction in preparing for and leading this change.
• Talent Management: Best Employers don’t just view the problem in terms of finding good employees – they see the situation as having the right people in the right roles led by the right leaders. HR uses “right people management practices” to solidify employees’ sense of fit, belonging and empowering top performance.
• Detail Focus: Best Employers develop an effective and consistent work environment that feels the same to all employees, regardless of status. In other words, the rules are clear, they are understood and they apply to everyone – there are no exceptions based on position or entitlement. Management also concentrates on ensuring that the details are attended to on a regular basis, thereby stopping small problems before they develop into major irritating burrs.

These surveys demonstrate that focusing on providing a positive and engaging work environment helps create happier and more productive employees, which increases client satisfaction and loyalty, which in turn drives improved financial results. As has been shown in so many other areas of management, “hard” financial results are highly dependent on having “soft” people management skills. Or conversely, failing to develop proper leadership and HR policies can mire your business in a toxic work environment which in turn poisons your bottom line.

David J. Bilinsky is the Practice Management Advisor at the Law Society of B.C. E-mail: daveb@lsbc.org. The views expressed herein are strictly those of the author and may not be shared by the author’s employer, the Law Society of B.C.

This article originally appeared in the February 2006 issue of BarTalk and is reproduced here with permission of both the author and the Canadian Bar Association, British Columbia Branch.