Talent management special report: Rules of engagement

The images of shell-shocked employees clutching boxes of belongings as they moved out of Lehman Brothers’ Canary Wharf offices last month on the day the investment bank went bust further brought home the realities of the current economic crisis.

With a further half a million UK jobs predicted to be axed next year, according to estimates from the Chartered Institute of Personnel and Development (CIPD), businesses should be quick to realise that, now more than ever, keeping talented employees feeling motivated and committed to the job in hand is a must.

Anthony Surley, former talent manager at outsourcing firm Emcor, speaks for most when he tells Personnel Today: “With high-profile company names plastered all over the news, staff will naturally be concerned about what it means for their job. They will also be worried that, if problems did arise [and they faced redundancy], would there be as many opportunities in the job market?”

Perhaps the good news for employers is that anxious staff won’t necessarily become demotivated, according to Mike Emmott, employee relations adviser at the CIPD. “They might even put in a stronger presence so that if there are redundancies, they can be seen to be keeping their head down,” he says.


The challenge for bosses, Emmott believes, is more centred on keeping those that remain in their jobs engaged. “It’s not just about the impact on the people that go, it’s also the impact on the people that stay,” he says. “If there are any job cuts, as we’ve seen in the finance and construction industries, the answer to keeping the remaining staff motivated is to treat the workers that are going well.”

He lists retraining, help with finding a new job, awarding financial compensation and the level of honesty shown when redundancies are announced as some of the key factors that will influence how much the staff who stay behind will still trust their employer.

Sara Edwards, HR and change director at fashion retailer Liberty, believes that employees, who may feel increasingly concerned about the impact the credit crunch is having on their jobs, will need reassurance that senior management is capable of handling the bad times as well as the good.

“There is more responsibility on us to make sure we respond and react quickly to that [staff concern] with tangible things we need to do,” she says.


Edwards believes it’s crucial for senior management to be seen out and about with staff to raise energy levels.

“With all the doom and gloom reported – and the impact that’s having on the high street – we don’t want our customers to feel that,” she says. “My team are in-store, out on the shop floor every day, talking to staff to keep everyone chipper. We need to energise the team and managers need to set the example.”

Edwards has also introduced several bold measures to improve employee morale, including reducing the financial sales targets on staff to keep their overall pay packets steady during a period of slow consumer spending.

Edwards and Liberty’s retail operation director convinced her CEO that reducing company goals for achieving a 10% increase on last year’s sales to 5% would be more realistic in the current climate.

“Staff are only paid [bonuses] when sales targets are reached, and we didn’t want to see a downturn on staff pay,” she says. “We’re already making sales ahead of last year but our new target wasn’t being achieved, so we reduced it.”

Other tactics at Liberty designed to boost employee morale include changing the mystery shopping system to only report positive feedback, making sure all employees are fully briefed by the finance director on company sales and targets, and ramping up onsite training to ensure staff do not miss valuable sales opportunities.

But Therese Procter, HR director at supermarket giant Tesco, says showing a certain amount of empathy with employees during the difficult times is crucial. “It is important to understand what’s going on in people’s lives. Energy and food prices are going up – everyone at some point will be touched by that,” she says.

“Employers are working with people that could be facing redundancy – just look at [tour operator] XL and Lehman Brothers. They are very different sectors but HR needs to be intuitive and compassionate.”

In direct response to the economic squeeze, Tesco has offered more than 600 employees across stores courses in money management and tips for saving cash during difficult times.

Perhaps professional services firms, such as KPMG or PricewaterhouseCoopers (PwC), are a little more fortunate when it comes to managing staff motivation in a downturn. As Mick Holbrook, PwC director of organisational and people development explains, his company is more protected in the difficult times than banks or other businesses offering just one product or service. “We are part of an umbrella organisation. We have a big consultancy business and a lot of our work is audit-related – which customers still need during the bad times.”

The business recovery and restructuring arm of the business is “booming” at the moment – PwC was appointed administrator for Lehman Brothers when it went bust, for example. But, Holbrook adds, the firm’s staff are used to being placed where the customers need them. This is “business as usual”, he says, and forms a key part of career development because it gives employees experience and expertise in several areas.

The concept of redeploying employees to work where the business needs them transfers easily to retail, too. Procter predicts that organisations will increasingly re-place staff into different roles where they are needed – rather than make knee-jerk job cuts when sales are slow. “[HR] people will ensure that the right people are in the right jobs at the right time,” she says. “We are still recruiting in retail services, for example, but we need to make sure we place people in the right jobs.”


Surley knows all too well the benefits of managing teams appropriately and placing people in roles that are right for them. “If staff are comfortable in what they are doing, you’ll get more loyalty, people are happier and more prepared to go the extra mile,” he notes.

And statistics certainly support this. A major study of employee engagement by professional services firm Towers Perrin last year found just one in five employees globally are engaged in their work, meaning they are willing to go the extra mile to help their companies succeed. The Global Workforce Study, the largest of its kind to date, found that companies with the highest levels of employee engagement achieve better financial results and are more successful in retaining their most valued employees than companies with lower levels of engagement.

As Holbrook puts it: “The old equation of ‘disengaged staff equals unproductive workers equals profit loss’ remains the same in the bad times,” although he admits “it is more difficult to maintain levels of engagement”.

Ultimately, the best companies will keep their staff committed by involving them in what’s going on. “I’ve seen a number of bosses ferret away in a room for nine months without telling anybody what they’re working on,” he says. “But people will maintain a high level of engagement if they feel their company is being honest with them, and involving them if they can [in company decisions].”

As Edwards puts it: “You can’t forget the basics.” And she’s absolutely right.

How to improve staff morale in an economic downturn

  • Cheer up the office mood by throwing a staff party or night out, or provide free food at work
  • Give constant praise, encouragement, and recognition to employees
  • Reassure staff about job security where possible
  • Encourage more flexible working (reducing hours reduces pay)
  • Make sure senior management come across as involved, positive and honest
  • Communicate, even if there’s no new news, and enable staff to feed back concerns
  • Ramp up staff training: make sure they are comfortable in their roles and know the job inside out.

Source: Workplace consultancy CHA

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