As we start a new year and begin to move into better economic times, it’s an important time for companies to re-engage employees in the employee value proposition (EVP). For some organizations, the EVP may have changed. Towers Watson’s recent Communication ROI Study clearly shows a distinct difference in financial performance when employees understand a company’s business goals, the steps that must be taken to reach those goals and rewards, and benefits they receive.
The Communication ROI Study also shows that companies who actively communicate the EVP, leadership changes or changes to benefits are more likely to see their employees engaged, focused and productive, even in uncertain times.
“The question becomes how to communicate effectively to a multicultural, multigenerational audience,” says Rosalind Watson, a communication consultant for Towers Watson. “And for many companies, it’s often a question of how to communicate more effectively with less resources.”
Smart Business spoke with Watson about the value of innovative communication and how executives can measure the return on investment of effective communication.
How does effective communication impact financial returns?
Companies that are highly effective communicators have the courage to discuss changes to their EVP and the discipline to communicate continuously with employees so that they understand the changes and can link them to the attainment of the company’s business goals. Companies that communicate effectively have posted a 47 percent higher total return to shareholders over the last five years than their less-effective counterparts.
In comparing the returns of 328 companies over five years, a $100 investment made in 2004 in a company with a highly effective communications program is now worth $130, whereas that same investment in a company with a less-effective communications program is valued at $83.
What’s the best way to communicate change?
Each company should tailor its media selection toward the specific message, the employee population and the culture. Top communicating companies often explain major changes through face-to-face meetings with trained managers, where employees can ask questions in an informal setting. Town-hall meetings give the CEO the opportunity to deliver a personal message, reinforcing the reasons behind the change. Personal involvement is crucial, because it allows the CEO to step down from the balcony and shorten the distance between himself and the employees at a critical time.
Electronic communication is starting to replace traditional paper communication, and highly effective communicators have embraced social media, often pre-testing their media selection and their message with an internal advisory group to see if the communication will be well-received.
What are some examples of innovative media?
Because media preferences vary by country or employee group, many employers use a variety of sources to deliver the same message.
- Wikis: A wiki page on the corporate intranet site provides a one-stop resource for information and is useful for explaining defined terms and knowledge management.
- Blogs and chats: Ghost bloggers can assist executives with daily posts and HR leaders can host online chat sessions about compensation and benefit changes.
- Town halls: Small group sessions allow executives to communicate directly with employees in an intimate setting and answer employees’ questions. Remote employees can attend via webcast and participate by e-mailing their questions during the session. The meeting can be recorded and uploaded onto the company’s intranet, so employees can view the session at their leisure.
- Webcasts: These can be used to deliver information about benefit changes, via a PowerPoint presentation delivered over the Web. Executives can host the meeting or provide the voiceover for the presentation.
- Interactive PDFs: Create an interactive PDF to help employees understand the changes, including links to videos, Web sites and important documents.
What is the investment rationale in social media?
Although many employers cite a lack of funding as a reason for not embracing social media, electronic communication is often more cost-effective than distributing printed materials and the duties can be handled by a few trained staff members. Communication is often viewed as a soft cost that is expendable during a downturn, but driving engagement and higher productivity levels is vital when there are fewer people to do the work. Helping employees to understand the rationale behind difficult decisions and provide feedback enables everyone to move forward together.
What’s the best way to measure the ROI from communication?
Employers can measure clicks and views to see which media sources are generating the greatest employee interest; surveys and focus groups can determine whether employees are embracing the message. Top-performing companies develop a documented communications strategy and assess its effectiveness by benchmarking key measurements, sometimes against other companies.
Although the ultimate litmus test of a company’s ability to engage its employees is its financial performance, many companies track return on sales or top-line growth during a specific campaign to measure ROI. Communication functions need to be held accountable for results just like other departments, because in business, what gets measured gets done, acknowledged and rewarded, and communicating effectively now helps companies to steer their way through to better times.