Employee engagement needs a new approach. As Kiran Reddy Pasham, Co-Founder, President and Chief Architect of SplashBI argues, organisations need to stop spending so much energy trying to convince disengaged employees to stay and instead focus on engaged employees — the workhorses and reliable people that drive businesses forward.
Employee engagement is an item high on every HR and business leader’s agenda, with most companies currently trying to do everything they can to retain employees, reduce turnover and drive productivity. From pulse surveys and skills-building to reward and recognition schemes and real-time coaching, numerous initiatives are put in place in an attempt to make employee engagement scores rocket. Yet, statistics show that a staggering 87% of employees worldwide are still not engaged. Organisations just can’t seem to make everyone happy.
Focusing on the long-term
Frankly, disengaged employees have already checked out. They are not the colleagues that engaged employees want in the trenches with them day-in and day-out. Engaged workers are the people that other engaged workers and business leaders want onboard to keep the business growing, remain innovative and meet targets. However, instead of placing greater emphasis on these employees, most companies focus on why people might leave; monitoring flight risks, developing programmes, providing training opportunities and deploying technology to bolster engagement, all with the intent of improving morale, reducing absenteeism and increasing productivity. The majority of HR and business leaders believe that if we do more to create a better employee experience and support employees in their well-being and career paths whilst providing better managerial support, they’ll be more engaged.
Unfortunately, the converse would appear true. A recent study by Gallup found that 63% of employees think they could easily get as good a job as they already have. Now, people leave jobs for a variety of reasons, but the fact that people are willing to walk out implies they are not fully committed to their job, or the company. An organisation might provide great pay, great benefits, great programmes, and great training that recognises great work or that can advance a person’s career. Yet if these schemes are in place and employees are still are disengaged, it might not be the organisation itself that has the problem. At which point it’s worth asking: what’s the cost of keeping workers who aren’t committed in terms of productivity and customer dissatisfaction? What if the fight for talent is actually hurting the bottom line? Consider that a disengaged employee can cost about 34% of a person’s salary in lost productivity. That’s about the same cost to replace someone. The figures speak for themselves: disengaged employees aren’t worth the cost of keeping them, let alone investing in trying to convince them to be more committed.
Rethinking employee engagement
Now consider data about engaged employees: companies with engaged employees outperform competitors by as much as 202%. It becomes pretty clear: organisations should stop focusing on disengaged employees and instead focus on engaged employees. They are committed, they want the organisation to succeed and they want to be surrounded by more “all-in” colleagues. Above all, they probably want to stop carrying all the burden of productivity.
According to a study by the Workplace Research Foundation, highly engaged employees are 38% more likely to have higher productivity. Organisations need to do more to find these engaged employees and find a way to replicate that engagement at scale. Find them, understand them; hire and retain more people like them. The trick is actually gathering sufficient data around what makes them tick.
Identifying the ‘keepers’
Forget tracking disengaged employees; track engaged employees instead. The reality is that workforce analytics — made possible by enterprise technology that captures HR data — can help us find and evaluate engaged employees. It used to be the norm that collecting and analysing data required a small army of data scientists. There is now a myriad of tools to choose from, such as long-form surveys, pulse surveys, manager and coaching tools, and workforce data.
But how can a manager using these advanced tools identify the employees that will make a positive contribution to the business? The omnipresent technology utilised by HR leaders can help measure and evaluate engagement, identify the top performing employees by the number of targets met or exceeded, manage the team’s headcount and reduce churn. Amongst countless other KPIs that matter to organisational success,retention is one of the best indicators of an engaged employee base; low flight risk and regret turnover – the number of high potential employees leaving the company – can clearly show the employees that are committed to their role, responsibilities and the organisation itself.
These insights can be used to support engaged employees and hire others with their characteristics. In reality, good managers create engaged, high-performing employees. The more we focus on creating a positive working environment equipped with managers that foster an engaged work environment, the better we’ll become at feeding our talent pipeline and fostering a culture that collectively is more committed to the mission and better business outcomes.
Honest services wire fraud and the need for caution on multilateral development bank projects
By Joshua Ray, Legal Director, Rahman Ravelli www.rahmanravelli.co.uk
A recent court case extended US prosecutors’ extraterritorial reach for tackling corruption. Joshua Ray explains the implications for those accused of wrongdoing on multilateral development bank (MDB) projects
Imagine the following scenario: You are an executive for a Paraguayan construction firm that has just secured a contract with the Paraguayan government to build a hospital in that country. The scale of the project means you will need to hire a number of subcontractors and, as you are in charge of choosing those subcontractors, you decide to seek bribes from those wanting the work. Such action is ill-advised and morally problematic. But as commercial bribery of this sort is not illegal in Paraguay, you may have breached your company’s code of conduct but you have not committed a crime under Paraguayan law.
Yet, unfortunately for you, the funds for the hospital were loaned to the Paraguayan government by the World Bank via a wire transfer from its Washington DC headquarters. And under a recent decision from the US Second Circuit Court of Appeals, United States v. Napout, you may have just committed “honest services” wire fraud under US law—even though you never stepped foot out of Paraguay and did not break your home country’s laws. The Napout decision is important as it expands the extraterritorial reach of US prosecutors’ anti-corruption efforts. For the reasons that I detail below, it has significant implications for foreign businesses, especially those engaged in projects sponsored by multilateral development banks (MDBs), whose financing comes from the US.
As they did after the 2008-2009 financial crisis, the World Bank and other MDBs are counteracting the current virus-induced global economic downturn with plans to deploy hundreds of billions of dollars in loans, primarily to governments in the developing world. Much of this will be parcelled out to private sector entities to construct hospitals, testing facilities, sanitation systems and other important infrastructure. Such projects carry the risk of corrupt local officials and business leaders siphoning off such funds for themselves. MDBs are mandated by their charters to take all reasonable steps to combat fraud and corruption on MDB-financed projects. They do not have law enforcement powers but they satisfy their mandate by building provisions into their contracts with direct borrowers (e.g. governments) that compel the borrowers to adhere to the highest ethical standards during the execution of MDB-financed projects. MDB contracts require borrowers to give the banks freedom to audit any of their books and records that relate to MDB funds.
This right of an MDB being able to audit the books extends to any indirect beneficiaries of MDB funds for a project, such as suppliers, consultants and contractors. Such third parties must also agree to submit to the MDB’s jurisdiction to investigate and sanction them for corruption, fraud or other misconduct. Punishments imposed by MDBs can be harsh, and can include debarment; where a company is prevented from bidding on MDB-financed projects for a number of years or even indefinitely. When an MDB uncovers misconduct through its own investigations it can – and often will – refer its findings to national law enforcement agencies; which can mean even more serious problems for those investigated.
The significance of the Napout decision regarding such situations is that it enables US prosecutors to pursue MDB-related bribery even when the purported wrongdoer is not subject to the US Foreign Corrupt Practices Act. Prosecutors can now pursue suspects for such bribery even if that suspect is not a US company, issuer or agent and has no other connection to the US.
The Second Circuit’s Decision
The appellants in Napout, Juan Angel Napout and Jose Maria Marin, were two former executives at football’s world governing body, FIFA. They had been convicted of using their positions to obtain millions of dollars in bribes relating to the sale of marketing and broadcasting rights. Napout had been president of Paraguay’s national football federation and Marin held the same post in the Brazilian football federation.
They both appealed on the basis that their convictions were the result of impermissible extraterritorial applications of the US honest services fraud wire statute. The crux of their argument was summed up by Napout’s counsel, who argued that the US had no authority to police the relationship between a Paraguayan employee and his Paraguayan employer and an alleged scheme involving South Americans that took place almost entirely in South America.
The issue of whether the honest services fraud wire statute had been improperly extended to extraterritorial conduct was then reviewed by the Second Circuit. It concluded that as long as a wire fraud scheme involves a wire transmission from, into or through the US that is “essential” or more than “merely incidental” to the overall crime, the extraterritorial application of US law was permissible.
The appellants argued that honest services wire fraud was a materially different crime than regular wire fraud, as the focus of honest services wire fraud was not the use of the wires but the bad-faith breach of a fiduciary duty owed to the scheme’s victim. They argued that as the actual conduct underlying an honest services fraud scheme occurred abroad, it could not be prosecuted in the US solely because it used US wires. But the Second Circuit disagreed: all that was required to uphold Napout’s and Marin’s convictions were facts showing that the use of US wires in their case (transfers of bribes in and out of US banks) was “essential” to their scheme. On that issue, the Court easily determined that the wires were essential: at least $2.4M of Marin’s payments were sent to his New York bank account and $2.5M of Napout’s were paid in US dollars generated by wire transfers originating in the US.
Implications for Participants in MDB-Financed Projects
The decision in Napout is relevant to MDB-financed projects as it clarifies the breadth of the honest services wire fraud statute and shows the ease with which US prosecutors can use it to target conduct that occurs almost entirely abroad.
The “honest services” variant of wire fraud is somewhat unique to US law and it is not universally recognised: a main piece of Napout’s defence, for instance, was that honest services bribery in a commercial context was not illegal where his conduct took place. But in the Second Circuit’s view, this fact was largely irrelevant. The Court ruled that the men had violated the statute by knowingly violating their duties to FIFA under the organisation’s code of ethics.
So, what does this mean in practice? The Napout decision confirms that the reach of US anti-corruption efforts extends far beyond the bounds of the FCPA; which applies only to bribes paid to “foreign officials” by US issuers, domestic concerns or their agents. Using an approach based on honest services fraud, all that US prosecutors need in order to have jurisdiction is for an “essential” US wire to be used in the scheme. As several of the main MDBs are based in the US – including the World Bank and Inter-American Development Bank – a fraud or corruption scheme involving MDB money could easily make “essential” use of a US wire transmission; thus rendering the offenders subject to possible US prosecution.
This is an important point for companies and individuals participating in MDB-financed projects to keep in mind: even if commercial bribery is legal (or at least widely accepted) in the country where the project takes place, if the ultimate funding is flowing from the US then extreme caution must be taken to ensure that US wire fraud statutes are not violated. This is particularly critical for projects taking place in developing countries where accepted business practices have not yet caught up with norms elsewhere.
Do your contracts and policies stand up to the Covid-19 test? A view from the UK
By Amy Cooper of Ius Laboris UK firm Lewis Silkin
The coronavirus pandemic and lockdown have stress-tested employment contracts and policies, with some showing signs of strain. What should you do now to make sure your employment documentation is ready for the post-Covid future?
A host of new issues for employers has arisen out of the pandemic, from health and safety concerns, to handling furlough and unanticipated homeworking. Employment contracts and policies were not drafted with the current situation in mind, yet restrictions on how people live and work could continue until a vaccine or effective treatment is found, possibly for years. And it seems likely that, as we gradually emerge from the shadow of coronavirus, it will be into a different world of work where home and flexible working is standard.
Furlough and changes to hours and salaries
In March, the UK government intervened to protect millions of jobs with its Coronavirus Job Retention Scheme, encouraging employers to furlough their staff rather than make redundancies. But most employers did not have any contractual right to ‘furlough’ or lay off staff. The concept of furlough leave was completely new and lay-off clauses in employment contracts are unusual, as are flexibility clauses that might allow an employer to reduce employees’ salaries or hours.
As a result, many employers have had to seek explicit agreement from employees to vary their terms where furloughing or changes to hours or salaries have been necessary to avoid redundancies.
Working from home
For those businesses that unexpectedly had to ask employees to work from home, there have been numerous other concerns. These include the health and safety of employees working in their homes, over which employers have little oversight and control.
Also problematic is the protection of personal data where employees are more likely to be using personal devices for work or work devices for personal reasons. And another issue is information security and confidentiality. This is more difficult to manage where employees are hosting calls and meetings at home with family members or housemates in earshot, or they do not remember to lock away any devices and documents.
Finally, grievances, disciplinaries and performance management problems may still need to be dealt with, albeit remotely. Most employers’ policies did not envisage or provide for this eventuality.
These concerns need to be managed in the short term, but they may also become longer-term issues for those employees who opt to work from home for the foreseeable future. Employment contracts should be updated as necessary, and certain terms such as place of work may need to be renegotiated.
Some employers may also wish to reconsider salaries. For example, some employees are paid a premium to work in central London: it may be decided that such high salaries are not justified if they do not need to live in London or spend thousands of pounds commuting. Conversely, if employees work from home, they may wish to be provided with home office equipment and possibly recover other expenses.
Some work cannot be done from home and employees, such as those who work in factories, supermarkets or on building sites, have in many cases continued going to the workplace throughout lockdown. These employers have different problems, such as implementing new health and safety measures in the workplace and ensuring employees abide by them. They may also have new data protection issues as they seek to collect more health data about employees, which might require new policies or changes to their privacy notice.
An increasing number of employers will face issues of this kind as they start to plan for the return of staff currently furloughed or working from home.
Employers’ policies on sickness absence and sick pay are unlikely adequately to cover employees who are self-isolating in accordance with government guidance but not unwell. Although we hope that Covid-19 will not be with us forever, it would be good practice to amend sickness absence provisions to set out expectations for employees who are either suffering from the virus, shielding or otherwise self-isolating. Alternatively, a temporary policy could be introduced covering these matters.
What should employers do now?
Some problems employers are facing will only require short term solutions, while others might need permanent changes to contracts and policies. Bear in mind that we may see a second wave of coronavirus in the coming months which might result in another lockdown, or there could be local lockdowns or further requirements for vulnerable employees to shield. Employers should think about whether they need any of the following:
- A temporary homeworking policy dealing specifically with health and safety, information security and data privacy, supervision and management, provision of homeworking equipment or how to expense any necessary items. If employers think employees may wish to work from home much more in future, they should start considering what sort of permanent homeworking policy they may require.
- An updated health and safety policy or a return to work policy that considers relevant matters in the workplace (e.g. masks, 1m+ distancing, safety equipment, cleaning, shared spaces, one-way systems) and also how to manage employees’ commute so as to reduce risks. A return to work policy could also deal with data privacy issues and new conditions on processing health information.
- Revision of disciplinary, grievance and performance management procedures to cater for remote working, for example, holding meetings by video conferencing, accompaniment, conduct of investigations.
- A temporary change to sickness policies to deal with employees who are not sick but are self-isolating, quarantined after returning from abroad, or ‘shielding’ because they are clinically extremely vulnerable. Employers may want to pay employees sick pay in these circumstances even if they’re not ill, for example, to prevent those who may be ill from coming into the workplace and infecting others. They may also wish to amend policies to deal with any notification or evidential requirements.
- Any changes to contracts of employment? Employers may wish to consider a range of new contractual provisions, such as including a right to lay off employees if work diminishes, or rights to alter working hours, the place of work, or to redeploy employees (e.g. to cover work if other employees are sick). If an employee’s place of work is changing permanently, the employer may want to renegotiate the contract.
Employers should take advice on their specific situation before attempting to make changes to contracts and policies. This can be a troublesome area and, if not handled correctly, could lead to employees claiming constructive dismissal on the basis that the employer has committed a fundamental breach of the employment contract. And remember that, even where employees agree to changes, the employer is still constrained not to exercise its contractual rights unreasonably by the term of mutual trust and confidence that is implied into every contract of employment.
Employers should also bear in mind that if their contracts and policies are regarded too unfavourably, employees may simply vote with their feet and choose to work elsewhere. On the other hand, judicious changes to employment contracts of employment could give employers valuable flexibility to operate in the emerging, post-Covid world of work.
Board Report Highlights Complex Decision-Making Process Across Banking and Finance sector
‘The State Of Decision-Making’ report from Board, reveals business decisions made in silos without modern planning tools
A third (33%) of Banking & Finance decision-makers believe decisions made in silos, despite majority (63%) of decisions being implemented worldwide
More than half (57%) of Banking & Finance decision-makers rely on spreadsheets for decision-making despite modern planning tools now available
The #1 decision-making platform, has today released ‘The State Of Decision-Making’ report focussing on how UK organisations make their important business decisions.
Based on a survey of 500 senior decision-makers, across industries including, Banking & Financial Services, Consumer Goods, Manufacturing, Pharmaceutical, Professional Services, Retail, and Transport & Logistics, ‘The State Of Decision-Making’ report from Board shows that today’s business decision-making process is increasingly complex, with multiple departments and seniority levels all responsible for some form of decision-making, leading to a lack of cohesion between units and a waste of business resources.
‘The State Of Decision-Making’ research found that while a clear majority of respondents (63%) working within the banking and finance sector say the important decisions they are responsible for get implemented globally, the decision-making process itself is not joined-up across the business, with one third (33%) also saying that crucial business decisions are made in departmental silos.
The research, conducted on behalf of Board International by independent research organisation 3GEM, also asked respondents the tools they use to make decisions and, while almost every action within an organisation today will lead to the creation of new data, it seems many businesses are not using the crucial insights which data can provide to make important decisions.
More than half (55%) of respondents in the banking and finance industry said they were making business decisions based on data and insights, but ‘gut feeling’ decisions are still made by up to 44% of companies. What’s more over half (57%) of the sector’s companies still rely on spreadsheets to aid their decision-making, despite more modern and reliable tools now available.
“In today’s fast-paced, data rich and evolving business environment, making quick and effective decisions is critical to both compete and survive,” explains Gavin Fallon, Managing Director for UK, Nordics & South Africa at Board International. “Important decisions are being made at any one time across multiple business functions, but all too often, important decision-making is disconnected, modular or fragmented.”
The research also asked respondents about the challenges banking and finance decision-makers face at their organisation, with nearly a third (29%) citing a lack of available data and insights and one quarter (25%) citing the fact there are too many people in the decision-making process as their biggest frustrations. However, industry decision-makers believe that the process can be improved with the introduction of new technology, with the majority (57%) of respondents saying this would make their decision-making better, while 41% also felt increased use of data and insights would help.
“Businesses have to plan every day for a far more uncertain future and set themselves up to prepare for change and keep changing against the backdrop of a more volatile and uncertain marketplace than ever,” continues Fallon. “A bad decision can have wide-ranging impact across the whole organisation and no business can afford to waste time and resources on bets that may or may not come off. As the business environment increases in complexity, the ability to not just react, but predict, in real-time, becomes more important than ever.”
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