Choosing the best places to work in our channel is by no means easy. There’s some stiff competition out there, perhaps even more than you might find in other industries.
That’s because direct selling was founded upon principles of exceptional service, personalization and taking care of one’s own. Those values are usually presented in the context of the relationships that independent distributors hold with their customers. But that’s only half the story. Direct selling companies also strive to apply those principles to their relationships they hold with their employees. The savviest companies realize that, given the incredible growth of this channel over the past several years, it pays to take good care of employees for two primary reasons. First, the obvious one: Turnover is disruptive, from the toll it takes on morale to the time and money it requires to replace employees who take their expertise with them out the door. Second, employees are on the front lines of communication with independent distributors. If employees are happy, distributors are happy. It’s just that simple. And, on a personal level, shouldn’t people enjoy what they spend most of their day doing and feel appreciated for that work?
“The company will only go as far as our employees take us, and they need to feel that they are being supported at all times. An engaged employee is one who believes in the company mission, and they’ll do everything in their power to showcase that to everyone they come across. That engaged employee becomes a company advocate, and dozens of others will follow that positive example.”
—Scott Lewis, Chief Visionary Officer, Jeunesse
Direct Selling News has once again partnered with Quantum Workplace to measure, analyze and, ultimately, honor the channel’s best places to work. We opened nominations Aug. 1, 2017, began surveying Oct. 30 and closed the survey Dec. 20. Thirteen outstanding companies made the cut for our 2018 finalists.
While each has their own distinctive story, these direct selling companies are united around a common theme of employee engagement.
For more than a decade, Quantum Workplace has been conducting in-depth surveys with organizations throughout the world, representing nearly every industry sector, in an effort to measure employee engagement. Higher levels of engagement are linked to better employee retention, higher productivity and more profit. Organizations that know where they stand can make an effort to focus more intensively on the drivers and address the detractors of employee engagement.
For the purposes of our 2018 Best Places to Work in Direct Selling survey, Quantum compared our survey results with all other Best Places to Work survey results, then held them up against the top three overall Best Places to Work results. Finally, Quantum compared the results of this year’s direct selling surveys against last year’s. All of those comparisons reveal some interesting findings worth considering.
“It’s imperative that you’re constantly making sure that employees understand why they’re working there and why their jobs matter. Then they feel more attached and engaged in the business. Our job is that we work for 23,000 people every day. We’re all in this together.”
—Chris Cicchinelli, CEO and President, Pure Romance
Here are some top-line takeaways from the direct selling analysis:
- Engagement increased slightly for our channel, up from 56.7 percent last year to 57.8 this year. The average national engagement rate was 67.5 percent, and for the top three regions, 74.5 percent. The direct selling channel, then, has an opportunity to increase employee engagement.
Compared to our previous year’s data, and national data from Best Places to Work companies across the board, benefits and culture are strengths associated with direct selling companies. More direct selling employees report that their employer-provided benefits meet their needs and their families’ needs (82 percent); their employer’s culture supports their health and well-being (83 percent); and that their immediate managers care about them as people (82 percent).
- Compared with last year’s data, our channel scores increased slightly in three areas: team dynamics (agreement with the statement “My immediate coworkers consistently go the extra mile to achieve great results,” which increased 3 percent); individual needs (“I am paid fairly,” which increased 2 percent); and personal engagement (“I find my job interesting and challenging,” which increased 1 percent).
- Compared to the Top 3 Regions benchmark and National benchmark, the direct selling channel is behind on employee recognition, understanding why organizations make changes when they do, and employees believing their opinions count at work.
- Compared to last year, the proportion of Highly Engaged employees increased, yet the proportion of Barely Engaged and Disengaged also slightly increased. This suggests that the direct selling channel may becoming more polarized—that is, the “middle ground” (Moderately Engaged, in this case) was pulled both up (to Highly Engaged) and down (to Dis- and Barely Engaged).
- Compared to last year, Trust in Leadership seems to have decreased the most. There’s lower favorability toward believing the organization will be successful in the future, trusting senior leadership to lead the organization to future success, and that senior leaders demonstrate integrity. This suggests that trust in leadership is an area of potential concern for our channel, and one that should be addressed before it becomes a larger issue.
Quantum’s 2017 Employee Engagement Trends Report aggregated employee survey responses from more than 500,000 employees at more than 8,700 organizations throughout the United States in 2015, including direct selling companies. The report revealed that employee engagement across all industries increased .7 percent from 2015 to 2016, recouping losses experienced during 2015. Further, the report identified three key challenges that lie ahead for industries across the board: The engagement gap between hourly and salaried employees grows; low engagement threatens retention; and failed change management puts engagement at risk.
“When we show we care for our employees’ growth and well-being, we develop and retain a caring team that works together toward growth.”
—Angela Loehr Chrysler, President and CEO, Team National
Employee Engagement Is an Evolutionary Process
Employee engagement isn’t a one-and-done initiative—especially for the direct selling channel, in which so many companies are relatively new and undergoing rapid change. As organizations add staff, their employee engagement philosophies evolve. Sometimes they need to make tweaks.
In the early days of growing a company, “all you’re trying to do is keep your head above water,” says Chris Cicchinelli, CEO and president of Pure Romance. “As the business grows and you add employees, some may not have the same drive as you do. Some may not be as attached.” He continues, “We went through periods when we asked, ‘Why aren’t these people getting it?’ We realized we needed to do better job of explaining who they’re helping, who they’re taking care of, and what our company mission is. They’re not just writing code; they’re helping a mom support her family. It’s imperative that you’re constantly making sure that employees understand why they’re working there and why their jobs matter. Then they feel more attached and engaged in the business. Our job is that we work for 23,000 people every day. We’re all in this together.”
As a company adds staff, it also becomes more logistically difficult for leadership to get in front of employees as much as they’d like, our executives say. At Scentsy, regular calls with executives and founders help ensure that the company’s growing employee base has the opportunity to hear directly from leadership. Employee engagement is a continuous process. “We haven’t arrived—we’ll always continue to improve,” says Richard Steel, Scentsy’s chief human resources officer.
“It’s more challenging to keep employees engaged because the online resources available now make it easier for employees to leave for another company if their needs aren’t met at their current jobs,” says Team National President and CEO Angela Loehr Chrysler. “We focus on the personal growth of each employee that feeds into the engagement levels of our company’s people. When we show we care for our employees’ growth and well-being, we develop and retain a caring team that works together toward growth.”
The ability to retain employees is where thoughtful and intentional employee engagement efforts can really pay off. While it may be easier than ever to lose an employee to a better offer, it’s also never been more expensive.
According to research conducted by Quantum Workplace, the average cost to hire an employee is at an all-time high of $4,129, and research shows that 33 percent of new hires will start looking for another job within their first six months at your organization. One in four will leave before they reach their one-year anniversary.
It should come as no surprise that employees who aren’t engaged are more likely to leave. If you were to take a look around your organization, how could you tell who’s engaged and who isn’t? It may be tempting to categorize your high-performers as your engaged employees and assume that employees who are “just dialing it in” are disengaged. But it’s more complicated than that.
In Gallup News article: “Talent Walks: Why Your Best Employees Are Leaving” (Jan. 25, 2018), reporter Ben Wigert reveals that “in our most recent work with organizations across various industries, we discovered something really interesting and somewhat unsettling: Highly talented employees who are not engaged were among those who had the highest turnover in each organization—on par with low talent, disengaged employees. In other words, when your best employees are not engaged, they are as likely to leave your organization as employees who tend to have performance issues and are unhappy.” And today, they have more choices than ever.
Given that employees are motivated by different factors, flexibility and personalization are important characteristics of any employee engagement initiative.
“You won’t accomplish anything with a one-size-fits-all approach, which means you need to dedicate more time to personalizing your engagement,” says Lewis of Jeunesse. “While that might not sound realistic, it’s critical as more of our workforce is dominated by millennials, who crave positive feedback. And within our companies, there are subcultures, meaning that those in marketing are different than those in IT, and those in sales are different than customer service. You have to know what engages those departments, and tailor your actions accordingly.”
“When we show we care for our employees’ growth and well-being, we develop and retain a caring team that works together toward growth.”
—Angela Loehr Chrysler, President and CEO, Team National
Steve Elder, COO of Xyngular, agrees. “How we connect with employees—how we communicate—happens in different ways,” he says. “We always want to provide clarity about our purpose and vision. We may think we’re communicating, but it may not resonate. Some people may want visuals. That’s our challenge. As we get larger, how to bring that vision as close to our employees as possible.”
High Employee Engagement
Among this year’s Best Places to Work in Direct Selling, we can identify some common contributors to high employee engagement, including:
ONBOARDING. As companies grow and add employees, it becomes more challenging to ensure the maintenance of their core values. That’s why onboarding is key. In less than seven years, the It Works! corporate staff grew from 58 employees to 207. Within the past year, the company established a formal onboarding program, including a mentorship component. Mentors are nominated by their managers and approved by the executive team. “The role of mentors is to teach employees about the It Works! way—our culture, values, expectations,” says Senior Marketing Director Kate Martin Carlson. “Over the years, we’ve had to be much more conscious about incorporating those elements as we’ve grown so quickly.”
STRONG CULTURE. As the Quantum Workplace survey indicates, culture is an area of distinct competitive advantage for the direct selling channel. Culture is defined as the pervasive character and personality of your organization—the sum of its values, behaviors, beliefs and attitudes. The more positive the culture, the stronger the engagement of employees. Steel of Scentsy sums it up perfectly: “When people drive into the parking lot, I want them to be excited.”
“People may think engagement is tied to how many parties or lunches we have, but that’s just window dressing for what our day-to-day culture is,” says Darren Jensen, CEO of LifeVantage. “It’s taking the time to give real thought to what the meaningful things are for your employee base.” As these executives suggest, employees need a “why” for their work, and while some say that’s especially true for younger demographics, having a sense of purpose is a strong motivator for employees of every age and background. That starts at the top. “The leadership of the company has to be crystal clear on vision, message and mission,” says Brant Wallace, senior vice president of resources and strategy at Zurvita. “When they’re interacting with someone—in customer service all the way to the executive vice president level—they have to be able to listen and take time to sow into that relationship. Then, they have to respond not from the standpoint of selling the mission, the vision, the goals, but really from a standpoint of how that goal, mission and vision apply to that employee. When I see that work, it works tremendously. When it doesn’t work, it leads to a misaligned and disengaged workforce that just wants to clock in, clock out and go home. They have to buy in to what leadership is saying, follow and bring others with them.”
SERVICE OPPORTUNITIES. The direct selling channel prides itself on a deep commitment to giving back. Each September, Scentsy holds an annual “Rock a Thon” near its Meridian, Idaho, headquarters to benefit a worthy cause. Last year, employees and members of the surrounding community filled 70 rocking chairs stationed on nearby Eagle Road. Local radio stations promoted the event, which culminated in a fireworks show. After 12 hours of rocking, the event raised $250,000 for a school for pregnant and parenting teens. Sometimes those efforts happen right at home. Approximately eight years ago, Nu Skin employees contributed to a voluntary fund established to help their fellow employees in need. To date, the fund has helped lighten the financial load for between 25 and 30 Nu Skin families facing medical issues. The company also sends a group of employees to Malawi, Africa, each year to work with local families on sustainability initiatives. Zurvita staff recently visited Puerto Rico, where they served meals to more than 3,000 people in one week. Across the board, direct selling companies embrace the opportunity to serve both locally and abroad.
PERSONAL AND PROFESSIONAL DEVELOPMENT. Direct selling is revered for its stories of personal and professional transformation in the field. Savvy companies are implanting similar offerings at home, giving employees exposure to training that develops and strengthens their direct selling knowledge and “softer” skill sets. Traits like resilience, perseverance, listening, empathy and other aspects of emotional intelligence may not be quantifiable. Nevertheless, they’re critical for success. Plexus is currently fine-tuning a series of curricula, which will be rolled out to almost every level within the company, says Mary Ann Luciano, vice president of learning and development. “Our CEO [Tarl Robinson] has said numerous times that he wants us to develop employees so they feel that while they’re at Plexus, they’ve been developed as well as we can possibly develop them. If and when they leave the company, we want them to take that Plexus development with them and know that we cared to provide development for them both as human beings and as potential leaders.”
At Nu Skin, where employees take advantage of such offerings as financial planning education, “We send a message to employees to spread their wings and fly,” says David Daines, senior vice president of global human resources at Nu Skin. “We’re trying to engage their whole lives, not just the time they spend here. If an employee leaves, we want them to be better than when they came.”
FUN. From theme park visits to sporting events, this year’s Best Places to Work in Direct Selling offer a lineup of events throughout the year for employees to downshift from their work and enjoy themselves. Every other Friday, Pure Romance employees enjoy “Drink Cart Friday.” Work stops at 3 p.m., and one department takes the lead, stocking the drink cart and passing through the building, encouraging employees to get out from behind their computers and connect with one another.
At It Works!, “We want people who are excited to come to work each day,” says CEO Mark Pentecost. “We want to have to ‘kick people out’ each night because they don’t want to go home—because they’re having fun.” The company’s waterfront corporate headquarters, Pentecost says, adds to that atmosphere of fun. “We chose our location to be a driver of the culture and environment we want to cultivate.”
Connection with salesforce. Relationships between employees and distributors are vitally important for several reasons: Distributors need to feel supported in their businesses, and employees need to understand the purpose behind their work. To that end, leading direct selling companies make a concerted effort to bring together employees and distributors in the same room. As members of the same team, they support each other, and everyone wins. Pure Romance, for example, holds periodic “town halls,” in which distributors come to the corporate office and share current challenges and opportunities with staff. Nu Skin offers a leadership program in which employees spend a day with a distributor in order to better understand their business. LifeVantage holds several large events throughout the year, and “we end up taking 60 to 70 percent of our employees with us to interact directly with the field,” Jensen says. In direct selling, companies place so much emphasis on products, promotions and distributors’ professional growth that it can be easy to lose sight of the development of employees. It’s a fine balance. “I don’t think it’s a zero-sum game. It’s not an ‘or’; it’s an ‘and,’ ” Jensen adds. “If you can take care of a distributor force of thousands, you can take care of a few hundred employees.”
HARD NUMBERS. Many direct selling companies, including several of this year’s Best Places to Work, are conducting employee engagement surveys to determine where they can improve. Results may be broken down by department so that specific groups can examine their results and analyze year-over-year changes. For the best results, the Society for Human Resource Management (SHRM) recommends that organizations reach beyond surveys and facilitate conversations with staff, asking questions such as “What does it take to be successful here?” and “If there is one roadblock between the organization’s ideal culture and the way it really is, what is it?”
It’s clear that employee engagement is about much more than great salaries or benefits packages; it’s about quality of life. “This goes beyond financial reward and gain,” says Daines of Nu Skin. “In the general workforce, roughly one-third of employees do just enough not to get fired. At Nu Skin, engagement matters because we’re trying to change the world. How can we change the world if we have employees who aren’t giving everything they have?”
Since 2010, Quantum has surveyed more than 8,000 organizations annually representing numerous industry sectors through the Best Places to Work Program. This year marks the third year that Quantum has surveyed the direct selling industry. The Best Places to Work Program survey utilizes the same 30 questions across six categories for all participants, regardless of industry. No single question is weighted more heavily than the others, although certain topics may be covered more frequently than others.
Six of the 30 questions on the survey are designed to quantify discretionary effort, intent to stay and advocacy for company. The other 24 questions measure workplace culture, identifying, for example, the kind of conditions under which employees are more likely to advocate for their employers.
The questions may be standard, but the results are highly individual. They shed light on what each company can do to retain their valued employees. And, as we examine the direct selling channel, those results suggest some patterns within our broader industry that merit discussion.
Room for Improvement
Returning to the direct selling channel’s areas of opportunity—including trust in leadership, employee recognition, understanding the rationale for organizational change, and employees believing their opinions count—here are some suggestions from Quantum Workplace for how to increase engagement:
Provide multiple mechanisms for internal communication. Encourage and solicit input from employees throughout the change. Consider issuing “pulse” surveys for a quick and accurate read on engagement amidst organizational change.
Provide flexible work hours and encourage flexible work locations. Consider unlimited vacation. Ask your employees “When are you at your best?” and “What’s draining your energy, and how can you do less of that?” This conversation can lead you toward opportunities to challenge motivated employees and work more efficiently. Send handwritten letters of gratitude for a job well done. Ask your employees how they like to be recognized. Match employee philanthropy giving.
Trust in leadership
When failure happens, don’t gloss over those moments. Instead, use them as opportunities. A leader who owns up to a bad decision shows vulnerability, which in turn can foster trust among employees. Consider releasing the company at noon the day before a holiday. Create a feedback-safe environment. Conduct quarterly teambuilding offsite. Ask employees for advice.