Why are Australian Companies not investing in their People?
One of the most compelling experiences we are confronted with as members of an Executive and Business Mentoring firm is that companies, generally speaking do not see the need to invest in the leadership and professional development of their people. Why you may ask?
Quite simply this is regarded in C-suite as a cost.
We put it to you in one simple assertion – it is an investment in your organisation’s prosperity into the future – through your people.
We all recognise that in recent times, general business confidence is down – hence numerous developmental programs, to put it bluntly, have been ‘axed’ or indefinitely postponed. We hear it – day in, day out.
So please consider the following.
At a time when companies are looking for every source of competitive advantage, the workforce itself represents the largest reservoir of untapped potential. Roughly speaking, 25% are engaged, 25% are actively disengaged and the other 50% are just doing enough to keep out of trouble. This is costing Australian industry over $30 billion per annum off the bottom line.
So what actions need to be taken to ensure employees are highly engaged? Here are what we believe to be the critical factors
- Leadership: Engaged employees have leaders who have character and competence, are visible, energetic and believe in their people and their business. They set clear expectations that are discussed, understood and agreed to, resulting in ownership by the workforce who are responsible and accountable. These leaders are trustworthy, consistent and dependable.
- They are responsible for and develop a culture that cares for the individual through timely recognition (not just at a performance review) and ensuring high levels of job satisfaction.
- Employees clearly know their role in the business and understand the bigger picture and company vision through ongoing communication and interaction. They are aligned with the company’s purpose, vision and values.
- Managers provide feedback for employees, for both good and not so good performance. They act as role models, (culture is caught, not taught) demonstrate organizational values and build relationships at all levels, expecting high quality work and productivity. (People leave managers, not companies)
- The company invests time and resources in their people. They value and respect them, encouraging their development and listen to them. As a result, they share the leader’s passion and commitment to succeed. Leadership sees their human capital as an asset, rather than only a cost to be managed.
Everything, but everything, falls on leadership. In reality, most leaders deserve the organizations they have. Disengagement should not be an option. Effective leaders get what they expect. If they don’t get it, they shouldn’t accept it. The key to a company’s success is its people. But it all begins with leadership. Show us an outstanding organization and we can tell you what their leader is like. The reverse is also true!
So how does this all work? So often, companies send their managers to training courses. While excellent information is gained, there are basically three types of knowledge – knowing what to do knowledge, knowing how to knowledge and being able to knowledge. The assumption is often made that just because managers know what to do and how to do it in theory, they will be able to implement it in practice. Our observation is that too often, this is not the case. If there is no follow up, all the information gained changes very little. Maybe the company feels they have discharged their responsibility of developing their managers by sending them on courses, but many times the reality is – life goes on as usual.
A much better alternative is to invest this money and time on mentoring and coaching (there is a difference – refer http://www.carnegiemg.com.au), where managers have someone to work with them and assist their development over a period of time which can bring about meaningful and lasting change. This holds them accountable to achieve targeted outcomes and become the best they can be. Too often we are satisfied with getting by rather than getting ahead. Nothing less than the very best should be acceptable,
Bottom line profitability is a goal all companies strive for. Raising the engagement levels of the workforce by developing the above attitudes, characteristics and skills modelled through their managers will set companies apart who understand what is written here and take steps to implement. As Business owners, CEOs or Managing Directors, responsibility for this should be at least in the company’s top three priorities. Ignore this at your peril!
Some people in senior leadership positions may well be affronted on reading this. Others may feel challenged and cause them to reflect, analyse their practice and take action. It is these senior leaders and their people that we are seeking to assist in the quest for excellence.
Ignore some of the ‘imperatives’ expressed here at your own peril.
Then ask yourself the question – “Why are our Recruiting and Training costs of new staff going through the roof?”
Like some assistance?
If so – contact us. We can help you apply this to your Business Leadership or Career Planning and Management.