By Shane Nelson
Q: What are the top drivers of employee engagement?
A: Employee engagement can be a barometer of how well diversity efforts have been implemented. In the workplace, high employee engagement leads to increased retention rates and higher productivity, which helps to drive down costs of replacing employees and lost productivity. In the marketplace, high employee engagement leads to better customer satisfaction. So how can organizations retain their talent and empower them in the marketplace? Here are three ways our data demonstrates that diversity helps increase employee engagement.
The CEO and his/her direct reports serve as ambassadors for employee engagement. Engagement of senior management is often contagious, reverberating throughout the entire workforce. Our research shows that when the CEO and his/her direct reports are held accountable for diversity-management results, it sends the message that diversity is a business imperative. The benefits of accountability are twofold. The company benefits from increased employee engagement across the board, resulting in positive results such as an increase in the diversity of recruits or diversity of those promoted, or even increased diversity of senior management.
Sodexo is proof of these goals working. In the DiversityInc article Linking Executive Compensation to Diversity Goals, the company notes that it links 25 percent of senior-executive pay to diversity goals and 10 percent to 15 percent for all bonus-eligible managers. The 2012 DiversityInc Top 50 averages 12.2 percent, up from 11.5 percent in 2011. Encompassing the diversity goals are process metrics that impact behavior change and outcomes, such as being a mentor or executive sponsor of a resource group. There are representation goals, such as recruitment and promotions, that are based on the availability of women, Blacks, Latinos, Asian Americans and American Indians for the area and the position. Dr. Rohini Anand, senior vice president and global chief diversity officer, cites Sodexo's employee-engagement scores, which have gone up dramatically and have been driven by increased scores mostly from women, Blacks, Latinos and Asians.
For the DiversityInc Top 50, resource groups serve as a key measurement of employee engagement. Participation in resource groups gives employees many advantages in navigating their careers. Participation in resource groups promotes career growth by exposing employees to the right people and the right projects. Ninety-six percent of the DiversityInc Top 50 companies have senior executives leading resource groups. Participants have the opportunity to showcase their talents to senior executives and in many cases are exposed to a senior executive they might otherwise not have come in contact with, and vice versa. This kind of exposure creates bidirectional engagement.
Senior executives find that new talent and participants are recognized for bigger projects. A resource-group study by Sodexo found that the top two reasons its employees joined resource groups were networking and to enhance professional and personal development. An Aetna employee-engagement study found that while overall engagement of employees increased from year to year, those in resource groups had significantly higher engagement scores than those not in the groups. Measures of manager effectiveness and customer focus also showed the biggest difference between those in resource groups and those not in the groups.
It also helps when a resource group is specifically tasked with increasing engagement and promotions of Blacks, Latinos, Asians or women, such as Kraft Foods. The company started a resource group for women in sales, the Women's Sales Council, with the objectives of increasing the percentage of women in key sales positions and elevating them in the company. The group convened annually with more than 80 women leaders. Kraft Foods reported increases in promotions of women in sales by 39 percent.
Our data shows that mentoring is a vital component in driving employee engagement. Companies that excel in diversity management use their formal mentoring programs to identify and nurture high-potential employees. The mentoring programs are formal and cross-cultural, meaning the mentor is of a different race, gender and/or sexual orientation than the mentee. Seven years ago, 10 percent of the DiversityInc Top 50 had mentoring programs with cross-cultural components. Today, 96 percent of the DiversityInc Top 50 companies include cross-cultural components in their mentoring programs. This ensures that the programs are reaching all races and genders and increases cultural awareness of all, including those at the senior-most levels.
Data from the 2012 DiversityInc Top 50 survey shows a positive correlation between having a formal mentoring program and senior-management representation.
For IBM, it starts with identifying talent early. Every year, current executives and those who go through a screening process across the enterprise globally who are identified as having potential for executive leadership go through the company's Business and Technical Leadership Process (BTL). Candidates are assessed against a set of competencies, including the ability to manage cross-culturally and globally. Leaders are asked to evaluate their own competencies as a part of that exercise, and where they come up needing development, specific efforts and opportunities around both mentor and mentee occur.
Ron Glover, vice president, diversity and workforce policy, human resources, notes, "We want to be conscious that the cross-cultural ones are the ones that tend to evolve into sponsorship types of relationships, particularly if they are at the more senior levels of the organization. But it has to build up the pipeline all the way up from the entry level of the organization, particularly if that's the path [to] move into senior roles." Glover spoke at a DiversityInc roundtable on talent development. Watch the video below.