Sunday 15 June 2008
Tuesday 13 May 2008
Why firms must treat Employees better?
There's a big reason why Punam Anand Keller is in India -- the guilt factor. The Professor of Management at the Tuck School of Business wants to popularise her pet theme, social marketing, in her country of origin.
However, Keller does not tread the beaten path of companies giving back to society. The professor, who's been selected by Financial Times as a woman to watch in business education, believes that businesses could start with smaller things: like treating employees on a par, if not better, than customers.
In an interview with Prasad Sangameshwaran, Keller explains how commercial marketing techniques can be used for enhancing employee programmes and makes a compelling case for HR to learn from the marketing function. Excerpts:
Your central message is 'treat employees the way you would treat your customers.' Is there a connection between happy employees and satisfied customers?
Research has proven that employee satisfaction is directly linked to customer satisfaction, and, of course, customer satisfaction is directly linked to return on investment.
Human resources cannot be a function for hiring, firing and appraisals. They are the gatekeepers for employees and have to be concerned with the overall development of the individual.
HR managers need to work with marketing research and learn techniques to find employee needs, similar to the way marketers find customer needs. Then they should cluster employees with similar needs into groups and develop specific employee engagement programmes for each group. They should then market the programmes to employees through the marketing department.
Finally, HR should evaluate the results of these initiatives by systematically measuring employee satisfaction, looking at how it impacts productivity and return on investment.
Employee satisfaction surveys have always been around. But why do they need to undertake employee marketing?
Because employees should like the company more than customers do. That's because the employee's livelihood depends on the company. Customers always have a choice. How many customer satisfaction surveys do companies do in a year? And importantly, do they undertake the same number of employee satisfaction surveys?
Companies can definitely make good profits. But profits are better if they do it through employee marketing.
As economies get stronger and people have more choices, loyalty to companies is going to go down the tube. On the other hand, customers are going to demand more and more sophisticated services. That's because with the kind of branding we see today, consumer expectations need to be matched with what the communication promises.
As a result, employee training becomes more expensive. Hence when you cannot retain employees, it's a real drain of resources on the company. A new employee needs to be exactly the same, if not better, than the person before. If you do not take care of them, the company stands to lose.
By the time employees are 30-32 years old, they have changed jobs six-seven times. The new generation is not about "am I successful?" They are interested in "do I like it?"
How do you deliver the right experience to employees?
It's similar to marketing research. We go to customers and find their needs and identify barriers. Then we cluster customers according to the lowest price, best services and so on.
Similarly, when you segment your employee base you can develop programmes for each group and brand and deliver it differently. Some employees have weight-related problems, others have diabetes. Some have very good savings but don't know how to invest. Others don't know how to save.
Men think differently than women in terms of savings. For example, women don't want to depend on children when they grow old and are too concerned about future health problems. Men feel they will never stop working. Sixty per cent of men covered in our research had retired without planning for retirement.
Women are anxious about retirement and men are more emotional about retirement. When women are sad, they take more risks than men. When men are sad, they discount it and try to distract themselves from sadness. Since they manage emotions differently, you need completely different employee programmes. We cannot treat everybody the same way.
But customising employee programmes could be cumbersome. Besides are there any real benefits?
In our own university, where we tested the concept, we saw participation of employees go up from 7 per cent earlier to 21 per cent. This was without any monetary incentive. In an investment advisory programme, we did not even push any service provider.
Previously, only 30 employees out of 5,000 turned up for these seminars. The return on investments was horrible. After designing customised programmes, we have a full house. The group that attends feels, "it's just for me". Also, they are more comfortable discussing financial matters in front of their peers.
Would employee programmes need to be fine-tuned from country to country? What works in the US, might not work in India. . .
Across the world, employees are all the same. Companies are going to realise that employees do not have just financial needs. They have spiritual, health and financial needs. They have long-term needs. People always want to be valued and respected for what they like to do.
In India, there's always been this sense of the company being a family and that companies will take care of their family members. As companies grow rapidly, they will lose that family connection. The culture that the US and European companies are artificially trying to develop is naturally present in Indian companies.
But as they are growing, Indian companies have no option but to start focusing on customised programmes for employees. They should then test it by finding out what employees think about the programme and measure effectiveness like "did the programme change employee behaviour?" and so on. Over a 1-2 year timeframe companies should analyse if there was any change in employee attitude, teamwork and productivity. The data will make companies more interested in increasing investments on employee programmes.
Globally, among the Fortune 500 companies, we are analysing what employee programmes these companies run and co-relate that with their rankings. We want companies to realise that with better programmes they have better rankings.
Then companies can afford to pay lesser salaries because they have the reputation of being a big company to work for. So employees feel that in the long-term they are better off in this company even if they have to take a hit in the short term.
However, Keller does not tread the beaten path of companies giving back to society. The professor, who's been selected by Financial Times as a woman to watch in business education, believes that businesses could start with smaller things: like treating employees on a par, if not better, than customers.
In an interview with Prasad Sangameshwaran, Keller explains how commercial marketing techniques can be used for enhancing employee programmes and makes a compelling case for HR to learn from the marketing function. Excerpts:
Your central message is 'treat employees the way you would treat your customers.' Is there a connection between happy employees and satisfied customers?
Research has proven that employee satisfaction is directly linked to customer satisfaction, and, of course, customer satisfaction is directly linked to return on investment.
Human resources cannot be a function for hiring, firing and appraisals. They are the gatekeepers for employees and have to be concerned with the overall development of the individual.
HR managers need to work with marketing research and learn techniques to find employee needs, similar to the way marketers find customer needs. Then they should cluster employees with similar needs into groups and develop specific employee engagement programmes for each group. They should then market the programmes to employees through the marketing department.
Finally, HR should evaluate the results of these initiatives by systematically measuring employee satisfaction, looking at how it impacts productivity and return on investment.
Employee satisfaction surveys have always been around. But why do they need to undertake employee marketing?
Because employees should like the company more than customers do. That's because the employee's livelihood depends on the company. Customers always have a choice. How many customer satisfaction surveys do companies do in a year? And importantly, do they undertake the same number of employee satisfaction surveys?
Companies can definitely make good profits. But profits are better if they do it through employee marketing.
As economies get stronger and people have more choices, loyalty to companies is going to go down the tube. On the other hand, customers are going to demand more and more sophisticated services. That's because with the kind of branding we see today, consumer expectations need to be matched with what the communication promises.
As a result, employee training becomes more expensive. Hence when you cannot retain employees, it's a real drain of resources on the company. A new employee needs to be exactly the same, if not better, than the person before. If you do not take care of them, the company stands to lose.
By the time employees are 30-32 years old, they have changed jobs six-seven times. The new generation is not about "am I successful?" They are interested in "do I like it?"
How do you deliver the right experience to employees?
It's similar to marketing research. We go to customers and find their needs and identify barriers. Then we cluster customers according to the lowest price, best services and so on.
Similarly, when you segment your employee base you can develop programmes for each group and brand and deliver it differently. Some employees have weight-related problems, others have diabetes. Some have very good savings but don't know how to invest. Others don't know how to save.
Men think differently than women in terms of savings. For example, women don't want to depend on children when they grow old and are too concerned about future health problems. Men feel they will never stop working. Sixty per cent of men covered in our research had retired without planning for retirement.
Women are anxious about retirement and men are more emotional about retirement. When women are sad, they take more risks than men. When men are sad, they discount it and try to distract themselves from sadness. Since they manage emotions differently, you need completely different employee programmes. We cannot treat everybody the same way.
But customising employee programmes could be cumbersome. Besides are there any real benefits?
In our own university, where we tested the concept, we saw participation of employees go up from 7 per cent earlier to 21 per cent. This was without any monetary incentive. In an investment advisory programme, we did not even push any service provider.
Previously, only 30 employees out of 5,000 turned up for these seminars. The return on investments was horrible. After designing customised programmes, we have a full house. The group that attends feels, "it's just for me". Also, they are more comfortable discussing financial matters in front of their peers.
Would employee programmes need to be fine-tuned from country to country? What works in the US, might not work in India. . .
Across the world, employees are all the same. Companies are going to realise that employees do not have just financial needs. They have spiritual, health and financial needs. They have long-term needs. People always want to be valued and respected for what they like to do.
In India, there's always been this sense of the company being a family and that companies will take care of their family members. As companies grow rapidly, they will lose that family connection. The culture that the US and European companies are artificially trying to develop is naturally present in Indian companies.
But as they are growing, Indian companies have no option but to start focusing on customised programmes for employees. They should then test it by finding out what employees think about the programme and measure effectiveness like "did the programme change employee behaviour?" and so on. Over a 1-2 year timeframe companies should analyse if there was any change in employee attitude, teamwork and productivity. The data will make companies more interested in increasing investments on employee programmes.
Globally, among the Fortune 500 companies, we are analysing what employee programmes these companies run and co-relate that with their rankings. We want companies to realise that with better programmes they have better rankings.
Then companies can afford to pay lesser salaries because they have the reputation of being a big company to work for. So employees feel that in the long-term they are better off in this company even if they have to take a hit in the short term.
Friday 9 May 2008
Outsourcing and India
Despite Western backlash against job outsourcing, the Indian software industry was in a buoyant mood as it gathered for its annual conference in Bombay.
The Indian software industry is optimistic as the pace of its expansion accelerates.
India's hi-tech sector is now growing at 30% a year.
Senior executives at a four-day international conference organised by Nasscom, the association of Indian software companies, claim the volume of work outsourced to India has increased by more than 50% in the last year.
The Indian software industry is in an upbeat mood
That is despite an increasingly noisy campaign against outsourcing by British trades unions and some American politicians. "Win-win situation" is the cliché often heard at Indian high-tech business conferences. But this time, Nasscom claims there's a ring of truth to it. A recent study commissioned by Nasscom and widely publicised in Britain claimed the benefits of outsourcing outweighed the temporary social and economic cost of job losses. "It's a win-win situation for countries which allow outsourcing and the countries which receive outsourcing", says Nasscom chairman Som Mittal.
UK government support It was a theme the conference returned to over and over. And there was unexpected support from a surprising source, the British e-commerce minister, Stephen Timms. It's a win-win situation for countries which allow outsourcing and the countries which receive outsourcing
NASSCOM chairman Som Mittal
Despite the increasingly loud complaints from British trades unions against the jobs flight to India, Mr Timms told the conference that his government had no plans to prevent British firms outsourcing work to India or elsewhere. "In the UK we believe in free trade and we practise what we preach," he declared. Mr Timms also announced yet another hefty outsourcing contract for Indian companies to help modernise IT systems for Britain's National Health Service. The UK government's hands-off policy was welcomed by delegates, given the increasingly frenzied debate over the flood of call centre jobs heading east.
American legislation
Neeraj Bhargav, chief executive of WNS Global Services, said that the change was inevitable: "Thirty years ago, the same thing had happened in manufacturing in Britain. There were massive job losses. Has Britain suffered? Their economy for the last ten years has been doing very well," he said. Interestingly, Indian industry also claimed not to be worried by new US government legislation prohibiting outsourcing. There could be two million Indians in the industry in five years' time These, they said, apply only to American government contracts, which account for just 1% of the total volume of India's outsourcing trade. And Nasscom insists that the tide will turn. "It's the election year both in India and the US and democratic governments have their own compulsions," says Mr Mittal. Official projections for the Indian IT sector's exports at the end of the current financial year, ending March, are $12bn.
That's forecast to rise by another $3bn in the following year. Nasscom ambitiously forecasts that the outsourcing sector alone will be a $15bn industry by 2008, up by a staggering $12bn compared to current earnings of $3bn.
New work
These optimistic forecasts come just days after Britain's busiest telephone number, its rail enquiry service, announced it was outsourcing half its 50 million calls per year to India. That adds to the several thousand British jobs already created in India by 30 companies ranging from leading banks such as Lloyds TSB, HSBC and Abbey, to insurance firms such as Aviva (Norwich Union). But even Nasscom admits to a pall hanging over India's sunshine high-tech sector. It is the growing number of Western complaints about the quality of service in call centres.
Quality issues Until now, the British and American media seemed amused by the way Indian call centre workers have been trained to speak in foreign accents to answer calls from customers in London or Los Angeles.
Now, Indian executives admit to a growing concern in the West that the accent training has not been good enough and Indian workers remain hard to understand. They are also increasingly being blamed for an alleged inability to understand the Western way of life. More important, says the industry, is the West's concern about security issues, notably data privacy laws and cyber-terrorism. Raju Bhatnagar, head of ICICI's outsourcing business, admits the worries are real. "In my view the concern is to a large extent justified. If you look at this industry, we have big players, medium-sized players and small players - some know the business, some others don't," he said.
Problems of growth There are no easy answers. But later this year, Nasscom will hold a conference on cyber-terrorism with its US counterpart, the IT Association of America. But the biggest problem faced by India's fastest-growing sector is how to cope with rapid growth. Demand for India's English-speaking, low-wage, highly-educated workforce is starting to exceed supply, executives admit. The industry says India's fledgling outsourcing and call centre sector has expanded massively in just three years. Hundreds more American and British companies are expected to jump on to the outsourcing bandwagon and the Indian industry says it will difficult to recruit enough high-quality staff.
The Indian software industry is optimistic as the pace of its expansion accelerates.
India's hi-tech sector is now growing at 30% a year.
Senior executives at a four-day international conference organised by Nasscom, the association of Indian software companies, claim the volume of work outsourced to India has increased by more than 50% in the last year.
The Indian software industry is in an upbeat mood
That is despite an increasingly noisy campaign against outsourcing by British trades unions and some American politicians. "Win-win situation" is the cliché often heard at Indian high-tech business conferences. But this time, Nasscom claims there's a ring of truth to it. A recent study commissioned by Nasscom and widely publicised in Britain claimed the benefits of outsourcing outweighed the temporary social and economic cost of job losses. "It's a win-win situation for countries which allow outsourcing and the countries which receive outsourcing", says Nasscom chairman Som Mittal.
UK government support It was a theme the conference returned to over and over. And there was unexpected support from a surprising source, the British e-commerce minister, Stephen Timms. It's a win-win situation for countries which allow outsourcing and the countries which receive outsourcing
NASSCOM chairman Som Mittal
Despite the increasingly loud complaints from British trades unions against the jobs flight to India, Mr Timms told the conference that his government had no plans to prevent British firms outsourcing work to India or elsewhere. "In the UK we believe in free trade and we practise what we preach," he declared. Mr Timms also announced yet another hefty outsourcing contract for Indian companies to help modernise IT systems for Britain's National Health Service. The UK government's hands-off policy was welcomed by delegates, given the increasingly frenzied debate over the flood of call centre jobs heading east.
American legislation
Neeraj Bhargav, chief executive of WNS Global Services, said that the change was inevitable: "Thirty years ago, the same thing had happened in manufacturing in Britain. There were massive job losses. Has Britain suffered? Their economy for the last ten years has been doing very well," he said. Interestingly, Indian industry also claimed not to be worried by new US government legislation prohibiting outsourcing. There could be two million Indians in the industry in five years' time These, they said, apply only to American government contracts, which account for just 1% of the total volume of India's outsourcing trade. And Nasscom insists that the tide will turn. "It's the election year both in India and the US and democratic governments have their own compulsions," says Mr Mittal. Official projections for the Indian IT sector's exports at the end of the current financial year, ending March, are $12bn.
That's forecast to rise by another $3bn in the following year. Nasscom ambitiously forecasts that the outsourcing sector alone will be a $15bn industry by 2008, up by a staggering $12bn compared to current earnings of $3bn.
New work
These optimistic forecasts come just days after Britain's busiest telephone number, its rail enquiry service, announced it was outsourcing half its 50 million calls per year to India. That adds to the several thousand British jobs already created in India by 30 companies ranging from leading banks such as Lloyds TSB, HSBC and Abbey, to insurance firms such as Aviva (Norwich Union). But even Nasscom admits to a pall hanging over India's sunshine high-tech sector. It is the growing number of Western complaints about the quality of service in call centres.
Quality issues Until now, the British and American media seemed amused by the way Indian call centre workers have been trained to speak in foreign accents to answer calls from customers in London or Los Angeles.
Now, Indian executives admit to a growing concern in the West that the accent training has not been good enough and Indian workers remain hard to understand. They are also increasingly being blamed for an alleged inability to understand the Western way of life. More important, says the industry, is the West's concern about security issues, notably data privacy laws and cyber-terrorism. Raju Bhatnagar, head of ICICI's outsourcing business, admits the worries are real. "In my view the concern is to a large extent justified. If you look at this industry, we have big players, medium-sized players and small players - some know the business, some others don't," he said.
Problems of growth There are no easy answers. But later this year, Nasscom will hold a conference on cyber-terrorism with its US counterpart, the IT Association of America. But the biggest problem faced by India's fastest-growing sector is how to cope with rapid growth. Demand for India's English-speaking, low-wage, highly-educated workforce is starting to exceed supply, executives admit. The industry says India's fledgling outsourcing and call centre sector has expanded massively in just three years. Hundreds more American and British companies are expected to jump on to the outsourcing bandwagon and the Indian industry says it will difficult to recruit enough high-quality staff.
Subscribe to:
Posts (Atom)