Today we announced EmployInsight’s funding round and our awesome advisory board. We’re excited to have the resources to build towards what we think is a compelling vision. So I wanted to share how we think about EmployInsight and a little bit of why I think it matters.
How we think about EmployInsight
I’ve always had a personal passion for what I call “The science of people.” This led me to pursuing an Applied Psychology Masters at UPenn. What I realized was that over the last 15-20 years, psychologists have gotten better at helping us measure innate human strengths and resources (such as emotional intelligence, GRIT, character strengths, or resilience factors), but the reason why organizations and individuals weren’t benefitting from the ability to collect this data was because no one had built a software system to make it easy to use this data.
That’s what we’re doing at EmployInsight. Our web-based platform makes it easy to measure, manage, and use data about psychological, emotional, and cognitive resources. It also enables organizations to measure how different jobs utilize these resources.
Our first application uses this data to help organizations improve hiring – leading to new employees who are more engaged and more likely to love their work.
Our second application will let managers or team leaders easily collect information about their teams strengths, and view analytics of how these strengths define the team. We expect this product to be available later this year at www.Strengths360.com.
Research conducted at thousands of companies worldwide reveals that employees who do not have a “best friend” at work have only a 1 in 12 chance of being engaged on the job. Those same surveys revealed that only 30% of employees DO have a best friend a work.1
Clearly, we’ve got plenty of room for improvement and an opportunity to astronomically increase employee engagement. But how do we tap into this potential goldmine?
We need to start by changing the way we communicate. Traditionally workplace communication has been “strictly business.” However, in order to cultivate loyal, engaged employees we need to communicate as people first, and employees second.
There are three essential steps to improving employee relations. My last article focused on the first step: Managers, Set the Example!
EmployInsight, the web-based technology platform that makes it easy for organizations to measure, manage, and use data about the psychological, emotional, and cognitive resources of a workforce, has raised $1 million from Founder Collective, Launch Capital, and other angel investors. In addition, the company has brought their first product out of beta and it is now being used by several enterprise clients.
EmployInsight helps organizations quantify, measure, and unlock psychological, emotional, and cognitive resources. By capturing, assessing and planning these resources in the workplace, companies can ensure that people are engaged in work they love. This can be utilized in hiring, performance management, organizational development, and beyond. EmployInsight’s platform is also used by individuals who want to better understand their strengths and how to most effectively apply themselves in their work. People are more than their resume, and EmployInsight allows individuals and organizations to quantify these soft skills.
After spending over a decade in the legal profession, much of it as a practicing attorney, I spent a great deal of time observing the career paths of talented women. Frustrated by the lack of inclusion of women in the partnership ranks, I often felt that those who led organizations were disconnected from the world women live in today. I now understand that what I thought was specific to one industry is happening throughout Corporate America. Women simply are not being advanced to high-level executive positions and partnerships at the rate they should be, and it’s having a negative bottom-line impact on businesses in this country; in fact, several studies have each concluded that companies with the best records of promoting women have a substantially higher return on equity, revenue, assets, and total return to shareholders1.
With that in mind, here are seven ways companies can retain and advance their talented women (written purposely from the collective “we”):
Companies have been tinkering with ways to increase employee morale, engagement, and productivity for years. In the 1920’s the Hawthorne studies demonstrated that simply showing interest in workers resulted in increased performance – the “Hawthorne effect.”1 Maslow’s2 theory in 1954 offered the hierarchy of needs to describe worker motivation, including: physiological, safety, social esteem, and self-actualization. About the same time, Herzberg3 offered that workers need both “hygiene factors” (e.g., supervision, salary and working conditions), and “motivators” which include advancement, achievement and recognition. From today’s vantage point, we look at these ideas and say “duh.” Was that really such a unique perspective at the time? Yes.
Research conducted at thousands of companies world worldwide reveals that employees who do not have a “best friend” at work have only a 1 in 12 chance of being engaged on the job. Those same surveys revealed that only 30% of employees DO have a best friend a work.1 Clearly, we’ve got plenty of room for improvement and an opportunity to astronomically increase employee engagement. But how do we tap into this potential goldmine?
We need to start by changing our attitude. Traditionally workplace friendships are either frowned upon or strictly forbidden. We now know that the potential risks associated with friendly employees pale in comparison to the proven benefits. Employees with a best friend at work are not only more engaged in their job, they are more efficient, stay with the company longer, are happier with their pay rate, and come up with more ideas.2 Sure, it may be true that companies who help their employees become friends risk a brotherly brawl at the office or, god forbid, dating co-workers; but, the positive impact on the company’s bottom-line is worth every office romance incurred.
Henry David Thoreau said “do not hire a man who does your work for money, but him who does it for the love of it.”
In personal relationships, we want to give and get equally, but it is not just the amount of reciprocity that is important, it the nature of what is being reciprocated. Just as in a relationship with a person you give psychologically and emotionally, so in a job you give psychologically and emotionally as well. Moreover, just as in a relationship with a friend, you get psychological and emotional benefits, the same transaction happens within a job. Research has uncovered the nature of this fascinating exchange.Psychologist Peter Kahn describes the notation of the Need-Satisfying Approach in engagement. In 1990, he interviewed 32 employees including counselors and financial professionals to investigate what work variables influence their involvement with work tasks. He found that engagement in work was the simultaneous employment and expression of a person’s ‘preferred self’ in task behaviors that promote connections to work and to others, personal presence, and active full role performances. Just as in personal relationships, we want to give and get in ways that we view as personally rewarding. This means that employees who are able to use their talents and who are rewarded in ways that align with their preferences naturally will be more engaged at what they are doing.
If we first consider direct turnover costs, we can see this includes expenses such as exit interviews, administrative functions related to termination, and separation/severance pay.
In an article in the Financial Edge, author Annie Mueller describes how even an $8 per hour employee can cost the company $3,500 in turnover expenses.[i] Then there are vacancy costs, which include line items such as net cost/savings incurred due to increased overtime or temporary employees needed to complete the tasks of the vacant position. Finally, there are replacement costs comprising attracting applicants, entrance interviews, testing, reference checks, cost of recruitment agencies, travel/moving expenses, pre-employment administrative expenses, medical exams, and acquisition and dissemination of information. Don’t forget training costs. In 2007, a report in Training magazine described how companies spend on average $1,200 per employee per year on training costs.
It is important to be motivated in the workplace, but did you know that the type of motivation you employ could be either energizing or enervating?
Take the example of two sales people, Jim and Larry. Jim and Larry both go to client meetings and do a great job talking and pitching to prospective customers. However, when Jim gets home he is exhausted and drained from the day talking with the clients, while Larry goes home recharged and excited for the next client meeting. For Larry meeting with clients is a rewarding part of his job. For Jim, it is obligatory.
Which salesperson do you think will remain in the job a year later?
The reason companies should care about engagement is simple: disengaged workers waste millions of dollars per year whereas engaged employees create millions in profit per year.
Consider the case study from Molson Coors Brewing Company.[i] The beverage company focused on engaging employees and the results were the following:
Engaged employees were five times less likely than disengaged employees to have a safety incident and seven times less likely to have a lost-time safety incident.
The average cost of a safety incident for engaged employees was $63, compared with an average of $392 for disengaged employees.
The company saved $1,721,760 in safety costs during 2002.
Low-engagement teams fell far behind engaged teams in 2005 sales volumes.
The difference in performance-related costs of low- vs. high-engagement teams totaled $2,104,823. Losing on average two million dollars per year is a very big reason why organizations should care about disengagement.
