Employee Engagement Can't Thrive on Bonuses Alone

After years of a prolonged boom in the financial services industry, things came crashing down late last year when firm after firm were either acquired or went to the government for bailouts. According to new research from ORC Guideline, 350,000 jobs could disappear from financial services in 2009, not counting the 200,000 lost in 2008.

The report, "Employee Engagement In Times of Uncertainty," goes further, stating that job losses in financial services alone account for approximately 8 percent of overall unemployment. While this has obvious implications for those laid off, it arguably affects employees who have survived the layoffs even more. The onus is on firms to keep them firing on all cylinders in relation to their jobs. ORC Guideline's research finds many organizations aren't doing a good job in that aim thus for, as it found 21 percent of workers are engaged in their work, and 38 percent are "partially to fully disengaged" (specific percentages were not broken down for the financial services sector). 

"The entire financial services industry was completely unprepared for this sudden change in the way it does business," explains Tricia Juhn, project director at ORC Guideline. "The segment had been expanding exponentially since the 1980s, and hasn't seen this kind of employee downturn in all that time."

The problem created by disengaged employees is that it affects how they perform their tasks. This goes from the customer-facing agents dealing with consumers to the fund managers and traders. "For fund managers, lack of employee engagement may not necessarily mean losing a customer, but rather $4 million in five minutes," says Aaron Horenstein, research analyst at ORC Guideline. "To have those employees disengaged or not fully engaged would have a tremendous impact on the industry."

The problem is that in the past, financial services firms kept workers happy by either promoting them or giving out lucrative bonuses. These bonuses, which have drawn much ire from the common populace as well as federal government, which is currently funding many large firms via TARP money, are not as abundant now. In the absence of these lucrative bonuses, Horenstein says the onus is on these firms to get back to basics and get creative with how they can get employees back fully on board without stuffing their pockets.

The first step, according to Juhn and Horenstein, is determining what does drive engagement in financial services. They highlighted three key drivers:

  • senior leadership that creates stability, transparency, direction, and focus;
  • good relationships with immediate supervisors, as 84 percent of financial services employees reported a positive relationship with immediate supervisors; and
  • a firm that demonstrates pro-employee decisions, via career advancement, improving skill sets, and acquiring new knowledge.

According to Lisa Wojtkowiak, client relationship manager in the employee engagement practice for Opinion Research Corp., the foundation for all three of these drivers is communication. "This is going to be a huge issue, and we're going to see major competition going on between [financial services] organizations trying to get good people back," she says. "It's more than just employee engagement at that point, it's about managing the internal and external brand of the employer. It's a huge hurdle."

Wojtkowiak stresses that before a company can move forward on recruiting, it must make sure that the employees still with the organization are engaged. "These are the ones that have the intelligence, talent, experience, and have weathered the storm with them," she says.

In this aim, the report suggests companies looking to invest in employee engagement strategies look into employee satisfaction surveys and creative compensation programs. The report highlights an example of a latter, noting a professional services firm's offer to junior associates for a one-year leave at a "reduced but still substantial salary." This allowed the firm to keep good talent at a lower cost, and avoided an idle workforce. "Engagement strategies don't have to be expensive, but you must tap into the right resources to make it successful," Wojtkowiak says.

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

CRM Covers
for qualified subscribers
Subscribe Now Current Issue Past Issues

Related Articles

You Are What You Measure

The measurements you track are an indication of the customer relationships you want to have.

Amid Budgetary Bloodshed, Social Media Marketing Is Spared

In a new survey, more than half of respondents cite overall marketing-budget cuts of at least 20 percent, but nearly half claim they'll be increasing their social media marketing spend.

Your Savings Are My Services

Think about what you're giving off when you're giving in to pressure.

Calling It Quits

Contact center agents are leaving in massive numbers -- attrition and absenteeism run rampant -- but there are ways to stem the tide.

Biting Off the Right Amount

PracticeWorks brushes up its technical support operations for oral-healthcare offices.

The Post-Recession Customer

From now on, consumers will be saddled with residual uncertainty.

Is Customer Experience Relevant in a Recession?

Only if you remember why it mattered in the first place.

Neuromarketing Isn’t Marketing

Focus on the customer's heart, not his head.

Self-Service Is Just Less-Than-Full Service

The real thing requires tailored, customized, and personalized solutions.

“At Least We’re Making Our Numbers”

If that's the case, do we really need to change?

The Excellence Myth

In an exclusive excerpt from his new book Excellence Every Day, industry thought leader Lior Arussy examines the truth--and crippling fictions--behind the value of experience.

Fix What Works

The ever-evolving journey toward exceptional customer experience.

Where Has All the Commitment Gone?

Lofty statements too often end up as small and meaningless actions.

Imperfect Scores

Is a new industry standard keeping executives from focusing on the relationships that matter?

Ain't It Rich?

The new competitive differentiation for luxe retailers will be about behaviors and solutions that are customer--not product--centric.