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“Most people think trust is earned. Here, trust is granted. We wouldn’t have hired you if we didn’t trust you.”
These very words are spoken by Xyngular CEO Russ Fletcher to new hires during the company’s new employee orientation sessions, presented by the four members of its executive team. At Xyngular, one of this year’s Best Places to Work in Direct Selling (see special award supplement included with issue), that statement sets the tone for what’s to come: a culture and a host of perks and benefits that convey an implicit message of trust, a key component of employee engagement. So what kind of impact does it have when an executive not only takes the time to personally welcome a new employee, but also makes a declaration of trust right out of the gate? For starters, a 97.7 percent employee retention rate.
Employee engagement: It’s both a simple concept and a complex dynamic. On the surface, employee engagement refers to satisfaction and happiness, but it is so much more than that. It’s a science that puts hard data around “soft” variables like emotional investment and intent to stay. Examine any high-growth company, and you can count on finding employees who believe their opinions are heard, who know specifically how their jobs contribute to the company’s objectives, who have access to professional development opportunities, and who feel valued by leadership. All too often, a company first learns of an employee’s disengagement with a resignation letter. Earlier intervention through better onboarding, mentoring, professional and personal development, recognition and occasional, but regular, touchpoints with senior leadership could have made a difference.
Engagement is a critical topic because, according to our third-party vendor and research partner Quantum Workplace, which conducted surveys and compiled findings for the 2017 Best Places to Work in Direct Selling contest, those perceptions are directly tied to a company’s bottom line.
For more than 10 years, Quantum Workplace has been conducting in-depth surveys with organizations throughout the world. Along the way, a consistent theme has emerged from their findings: Companies with higher employee engagement see better retention, better productivity, better profits. Based on that knowledge, Quantum, through its in-depth research, has revealed some of the primary drivers of engagement, along with factors that can diminish it.
When we speak of employee engagement within direct selling companies, the contributors and detractors really don’t differ from the business world at large. However, it’s important to note the effect of employee engagement on our ultimate customer: the independent salesforce members we serve. It stands to reason that happier employees mean a happier independent salesforce.
The continued growth of the direct selling channel has created an exciting climate in which talented candidates have an unprecedented number of choices, whether they want to help lead transformation at a legacy brand, join a startup or something in between. The competition is fierce for candidates who are knowledgeable about our channel. That kind of environment, then, puts the pressure on every organization to find ways to attract employees, and also retain them.
2017 Best Places to Work in Direct Selling Honorees
For the purposes of our 2017 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. Here are some top-line takeaways from the direct selling analysis:
- Compared to our previous year’s data, and national data from Best Places to Work companies across the board, benefits are a strength associated with direct selling companies. In other words, more direct selling employees report that their employer-provided benefits meet their needs and their families’ needs. Employee working in direct selling were 7 percent more favorable this year than last year when asked if the benefits at their company meet their, and their family’s, needs. Direct selling employees were also 8 percent more favorable than the national average on the same question.
- Two aspects of direct selling employee engagement—intent to stay and team dynamics—decreased the most from last year. Direct selling employees dropped 6 percent in favorability in 2017 compared to 2016 when asked if it would take a lot to get them to leave their organization. In regards to team dynamics, direct selling employees were 5 percent less favorable in 2017 when asked if their immediate coworkers go the extra mile to achieve great results compared to 2016 data. Also, when asked if the people they work with most closely are committed to producing top quality work, employees were 3 percent less favorable this year compared to last.
- Compared with national Best Places to Work data, direct selling companies have lower levels of perceptions around managerial communication (-12 percent favorable) and career fit (-10 percent favorable).
It’s also worth taking a look at Quantum’s 2016 Employee Engagement Trends Report, which 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 2017 Trend Report, an analysis of 2016 data, will be released later this year.) The 2016 Employee Engagement Trends Report revealed that, across the board, employee engagement remained relatively flat among Best Places to Work in 2015, with a slight year-over-year decline. In 2015, 65.3 percent of surveyed employees were considered engaged, compared with 65.9 in 2014.
While flat, it’s an improvement over last year’s results; in 2014, engagement levels had dropped significantly. But it’s hard to argue against the notion that companies still have plenty of work to do. Findings of the 2016 Employee Engagement Trends Report include:
- Manager effectiveness experienced the largest decline (-.19 percent), due in large part to deficient performance feedback. The survey item “My immediate supervisor regularly gives me constructive feedback on my job performance” decreased by a very large margin (-2.30 percent), which brought down the entire manager effectiveness category.
- The gap between large and small companies widened. The smallest organizations, those between 1 and 249 employees, experienced an engagement increase of 1.80 percent; while the largest organizations, those in excess of 5,000 employees, saw a decrease of 2.53 percent.
- Three consistent themes driving engagement are confidence in leadership, commitment to valuing employees and a positive outlook on the future.
In conducting this program again in 2017, Direct Selling News strives to identify and share best practices while shining a light on the companies who are setting the standard for our channel. Our annual Best Places to Work in Direct Selling contest honors those organizations who continually nurture, encourage, challenge and recognize their employees. A few best practices emerge among this year’s Best Places to Work that could suggest areas of focus as we continue to work as a community to better engage our employees.
An employee’s engagement tends to be highest in the early days of her employment. Making an immediate and concerted effort to immerse her within your culture, then, can help put her on firm footing. When onboarding is standardized and structured, it leads to higher job satisfaction, organizational commitment, lower turnover, higher performance, career effectiveness and lower stress, according to a report issued by the Society for Human Resource Management (SHRM), titled “Onboarding New Employees: Maximizing Success.”
A formal onboarding process is “a relatively new discipline for us,” says LegalShield CEO Jeff Bell, who took the helm of the company in 2014. Within the past 12 months, LegalShield has implemented a multi-day, structured new employee orientation. New hires leave with an understanding of the company’s culture, the educational offerings available to support them in their careers, and where their respective roles fit into the big picture. This standardized onboarding process is one of several programs implemented in recent years to better support LegalShield’s 776 employees. The result? Turnover rates have steadily decreased over the past three years.
An important element of onboarding is exposure to other functions of the company, so that a new hire can begin to connect the dots, so to speak. That’s the philosophy at Zurvita, where every new hire, regardless of function, completes an intensive onboarding process including exposure to field dynamics, products and, perhaps most important, customer service—listening to calls and learning how employees on the line resolve various situations.
Since 2010, Quantum has surveyed more than 8,000 organizations representing numerous industry sectors through the Best Places to Work Program. 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 the above measures (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.
Culture Drives Everything
Our 2017 Best Places to Work in Direct Selling companies serve as a great example of the philosophy that, when creating employee engagement initiatives, it’s wise to start with a steadfast vision of who you are as a company, then make sure your programs are consistent with those principles. Actually, the communication of that purpose should begin during the onboarding phase and then remain omnipresent in everything you do as an organization.
When David Daines, Vice President of Human Resources at Nu Skin, joined the company, he asked Founder Blake Roney about his expectations for the role. Roney’s response was simple: He wanted to provide Nu Skin employees with opportunities they wouldn’t have had otherwise. Daines’ mission became clear: “This isn’t just about making Nu Skin better,” he says. “The question is, how do we help employees become the best they can be?”
Engagement efforts at Nu Skin have ranged from strategic to spontaneous, Daines says. He points to an example: Roney has been known to pay impromptu visits to a particular floor in his corporate headquarters, round up employees, bring them to a store and tell them to purchase whatever they need within a specific price range. Unconventional, to be sure. And the goodwill that gesture creates isn’t just about material goods; it’s about employees having direct and positive interaction with senior leadership, an aspect of corporate life that can often be lacking, especially in larger companies.
Volunteering also presents an unparalleled opportunity to connect or reconnect employees with your company’s heart. Nu Skin has paid for employees to travel to Malawi, Africa, to support company-led revitalization and sustainability efforts. “Most programs are diametrically opposed to what people need,” Daines says. “They’re just throwing cash around.” What will earn you the long-term loyalty of employees, he adds, is the opportunity for them “to be involved in something bigger, to be recognized for the work they do, and to be a force for good. Give an employee a $1,000 bonus, and it will probably go toward their bills. But you can’t buy experiences.”
Through its research, Quantum Workplace has found that one of the areas in which employees across the board lack confidence is the statement “The organization makes investments to make me more successful.” At the outset, that may sound like an expensive proposition for an employer, but even simple efforts can pay significant dividends.
With programs ranging from book clubs and online discussion groups to on-site instruction, this year’s Best Places to Work companies are committed to the ongoing professional development of their employees. Employees are often held accountable for their own growth, with completion of programs tied into their respective performance goals. For example, last year, Plexus rolled out Empower U., a comprehensive online library of approximately 7,000 videos and interactive courses. Empower U. is open to all employees, and the company has developed specific curricula for various departments and functions. Completion of courses is often tied to employee goals and performance reviews.
The company’s top 30 leaders currently are enrolled in a five-month-long leadership program taught by a Ph.D. instructor, with the goal of strengthening their existing skillsets. At LegalShield, managers and above begin “The Movement,” an in-house professional development program that teaches collaboration and problem-solving skills, and includes what Bell refers to as “purposeful rotation,” or job rotation, so that leaders have the opportunity to diversify their skill sets. LegalShield employees also receive a weekly newsletter video embedded with “Five Minutes Strong,” a personal and professional development segment presented by CEO Bell.
Connection with Senior Leadership
Regular touchpoints between senior leadership and staff are vital. At several of this year’s Best Places to Work in Direct Selling, monthly meetings or “town halls” provide an opportunity for executives to recognize employees, recap the month’s highlights, share long-term strategy, and answer questions.
But it’s not always so formal. Xyngular uses Slack, an instant messaging system through which leaders can issue kudos, pose questions to the masses and solicit ideas. LegalShield employees submit their ideas to “Stop Doing Stupid,” an online suggestion box, and are awarded cash bonuses for innovation.
At Team National, “It’s very common for our leadership to send emails with self-help or personal growth-inspired messages to all of our staff throughout the workweek,” says Jody Ostendorf, Director of Human Resources. The company’s leadership team maintains an open-door policy with employees. “There’s a comfort level knowing you’ll be given the time to ask questions, that your opinions will be taken into consideration, and that you’ll get straight answers,” Ostendorf adds.
At Zurvita, executives Mark Jarvis, Tracy Jarvis, Jay Shaffer, Brian Altman and Brant Wallace all have established a goal for themselves in 2017: to meet with all 92 of the company’s employees individually. “We want a place where people can be heard,” says Wallace, Senior Vice President of Finance and Strategy for Zurvita. “Everyone needs to believe that they matter.”
Levels of Employee Engagement
It’s important to understand the four levels of employee engagement as Quantum Workplace defines them. These levels place each of your employees, based on their answers to a survey, into one of four categories based on their respective levels of engagement. Scores range from 1.0 to 6.0.
Engaged (5.0-6.0): This is the employee you’d like to clone, if you could. She preaches love for your organization and puts in the extra effort; she plans to stay for the long term.
Contributing (4.0-4.9): This employee is doing relatively well, but he’s holding back from giving his all. Something’s stopping him from reaching his potential. The good news: There’s still opportunity to re-engage him.
Disengaged (3.0-3.9): Indifferent is the best way to describe this employee. She lacks motivation to perform optimally, appears to be going through the motions and is at risk for jumping ship. The odds of re-engaging her are slim.
Hostile (1.0-2.9): To be blunt, this employee is a lost cause. He’s negative, lacks commitment and is rubbing off on his co-workers. There’s no hope of re-engaging him, and, in fact, his presence is a detriment to your organization. His critique “goes beyond healthy feedback and is not submitted with the intent to build a stronger workplace,” according to Quantum’s engagement profile descriptions. “These individuals are rare. And they are likely impacting the productivity of others.”
Connection with the Field
This year’s Best Places to Work honorees understand that exposure to the salesforce is essential, because it breeds both understanding and empathy. Daines had been with Nu Skin for about seven years when he overheard a conversation between two distributors in the hallway one afternoon. “One of them said, ‘I just sold my farm to do this business,’” he recalls. “The average employee doesn’t understand the sacrifice and pain that these distributors go through. That’s why our support matters.”
That connection is fostered, of course, through responsive service. Companies like Team National and LegalShield are using state-of-the-art telecommunications technology to help employees provide better and faster service. This technology also provides potential training opportunities for new and current employees to become acclimated to common salesforce challenges and solutions.
The term “work/life balance” is somewhat self-defeating; it implies an either/or decision. In a Quantum Workplace report, “How to Keep Employees,” Market Content Specialist Christina Laubenthal recommends another approach: “We want to make work a constructive part of an employee’s whole life rather than separating the two as competing forces,” she says. It’s part of a philosophy she recommends: “This is the key to employee retention: If you can make and support the best version of a person’s self, it will be near impossible to get them to leave.”
For example, March Madness has a reputation for driving up sick days and driving down employee productivity. At Nu Skin, however, management has decided to celebrate the madness. Throughout Nu Skin’s corporate office, March Madness games are playing on big screens, and employees participate in a company-wide bracket for prizes. “We make work a place where they want to be,” says Daines, “and we’re a lot more productive than many companies during this time.”
Team National holds an annual Employee Appreciation Day, which has garnered rave reviews from its staff of 75, many of them with tenures of a decade or more. In 2016, the company shut down its corporate headquarters for the day and sent its employees to a nearby beachfront hotel. After a morning of competitive “Beach Olympics,” employees were treated to a poolside-catered lunch and spent the rest of the day relaxing among colleagues.
After surveying its employees, Isagenix recently declared a year-round office casual dress code and added a week’s vacation for every employee with a minimum three weeks’ vacation. The company also provides employees with grocery store gift cards at Thanksgiving, and added pet insurance to its 2017 benefits offerings. Younique just moved into a new facility with an in-house salon, spa and fully furnished gym with fitness classes.
Employee satisfaction also tends to remain high when families buy into the corporate culture. Within this year’s Best Places to Work in Direct Selling are companies that, for example, reserve a local amusement park for the day and invite all families to attend.
As the business community at large moves toward more flexible working arrangements, direct sellers, too, are taking note, including LegalShield. In an effort to better serve its independent sales representatives, the company is moving toward 24-hour coverage, and is kicking off a pilot program this year that will enable employees to work from home. While that may sound counter to the concept of a more balanced life, it’s a structure that would give a single mother, for example, the ability to work from home during the day while her children are at school, take a break when they return home, then log on again once they’re asleep.
Forty-three percent of highly engaged employees receive feedback at least once a week, according to Quantum Workplace research (“A 4-Part Formula to Employee Performance Motivation”). Annual reviews simply aren’t enough. This form of evaluation has become antiquated, particularly among millennials who tend to prefer more frequent feedback. Some companies, like Xyngular and Zurvita, have moved to a quarterly review schedule to promote ongoing conversation between managers and their teams.
Annual reviews, in fact, can have a detrimental effect on engagement. Quantum has found that 78 percent of disengaged organizations leverage traditional (annual) performance reviews (source: “10 Steps to Ditching the Archaic Annual Performance Review”). Seventy-one percent of employees prefer immediate feedback, even if it’s negative. According to the report, annual reviews are often a one-way conversation, employees can be blindsided, there’s a bias toward recency—or failure to recognize the big picture of an employee’s contributions to the company—and there’s no follow-up.
Of course, there’s a fine art to delivering feedback diplomatically. Steve Howard, CFO for Plexus Worldwide, adds that there’s a difference between praise (“Great job!”) and providing employees specifics about what they did well. Conversely, he says, when employees make mistakes, “our philosophy is to ask them how they think they did and what might they do differently next time. Feedback at Plexus is aimed to be forward-looking rather than to dwell on the past.”
Quantum also recommends that companies consider enabling their employees to seek “skip-level” one-on-ones; in other words, meet with their manager’s supervisor. Such conversations provide the employee with another valuable perspective while promoting trust.
While all of this analysis can leave human resources departments overwhelmed about the best way to keep employee satisfaction high, the mission is really quite simple: “People are at their best when they feel happy, healthy and heard,” says Quantum Workplace’s Laubenthal. And, as this year’s Best Places to Work show us, that’s a mission well worth the effort.
“Trying to measure the return on investment in employee programs can be difficult,” Howard adds. “But our employees put everything they have into Plexus every day. So why wouldn’t we put everything we have into them?”