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TheWhitePaper*
Engaging the Global Workforce:Bridging the Gap between Finance and Talent Management
ISSUE 6 JUNE 2008
TheWhitePaper*
2
Table of Contents
Introduction .................................................................................................... 3
Key Finding No. 1: .......................................................................................... 4Human Resources must take a more strategic role in the business.
Key Finding No. 2: .......................................................................................... 5Employee recognition improves employee engagement, which increases retention and
productivity, thereby positively affecting company performance.
Key Finding No. 3: .......................................................................................... 7Business leaders believe creating a universal recognition platform for global companies is difficult.
Key Finding No. 4: .......................................................................................... 8CFOs are not aware of how much they are currently spending on recognition programs.
Key Finding No. 5: .......................................................................................... 9The CTO and the CFO must work together to chart the course for the future.
Summary ........................................................................................................ 10
Methodology ................................................................................................... 11
Demographics ................................................................................................. 11
About Globoforce ............................................................................................ 12
TheWhitePaper*
3
Introduction
The link between workforce retention and company performance has become
more quantifiable, and a new wave of HR executives is moving to the vanguard of
corporate governance—the Chief Talent Officer (CTO).
In the 21st Century, the question is no longer
whether global changes in workforce dynamics im-
pact company performance, but how to be in front
of these changes. One such change is the onset of
baby-boomer retirement combined with decades of
economic expansion and a tight labor market to cre-
ate a critical shortage of seasoned managers.
To lessen the impact of these changes, many com-
panies have increased investment in succession
planning, employee retention and employee en-
gagement. Such initiatives help to bridge the gap
between finance and talent management as the two
departments collaborate to create business cases for
new processes, programs and technologies to track
their financial outcomes as it relates to their biggest
investment in human capital.
This report assesses the attitudes of business lead-
ers towards the relationships between the CTO and
the CFO, and their mutual role in engaging the glob-
al workforce to adapt to the new global workforce
trends.
Key findings of this study include:
Human Resources must take a more strategic role in the
business.
Employee recognition drives engagement and therefore impacts
recognition, retention and productivity on the bottom line.
Creating a universal recognition platform for global companies
is difficult.
CFOs are not aware of how much they are currently spending
on recognition programs.
The CTO and the CFO must work together to chart the
course for the future.
1.
2.
3.
4.
5.
TheWhitePaper*
4
Human Resources has come a long way from its days as the Personnel Department.
The idea of HR’s role as merely a transactional or recordkeeping function is as outdated
as the typewriter.
Key Finding No. 1Human Resources must take a more strategic role in the business.
Today, employees are the largest investment for an or-
ganization and, like any other investment, their value
needs to be understood, their performance measured
and their skills amplified. As one survey respondent
explained, “HR holds the keys to the engine—the
employees. Nothing is more important than what hap-
pens on the front line. HR hires, trains and retains
these folks, and it is vital that HR play a role in the
strategic planning.” With this in mind, it comes as
no surprise that 87 percent of respondents said HR
should play a more strategic role than in the past.
As technology enables organizations to harness
more data about employees, HR is not only expected
to take a strategic position in the organization, but
also to quantify its work with appropriate metrics to
substantiate ROI. Survey respondents overwhelm-
ingly agreed with this—91 percent said it is more
important than ever for HR to be accountable for
what it spends. Almost as many respondents—88
percent—said HR must embrace a more metric-
based standard for measurement.
But how is HR doing in taking a strategic view?
The survey results indicate actions are not neces-
sarily following intent. Although 87 percent of re-
spondents believe HR should play a more strategic
role than in the past, only 63 percent of respon-
dents believe HR has the right amount of input in
the strategic direction of the organization. Further-
more, fully one-third of respondents still believe
HR has too little say in overall business strategy.
Human Resources Must Take a More Strategic Role in the Business
HR has the right amount of input in the company’s strategic direction
HR has too little say in strategy
HR should play a more strategic role than in the past
HR must be accountable for what it spends
HR must embrace a more metric-based standard for measurement
0 20 40 60 80 100
63%
33%
87%
91%
88%
TheWhitePaper*
5
Human Resources is frequently asked to provide a measurable benefit to the
organization for employee engagement. In fact, the term employee engagement
is so often discussed that it almost borders on cliché.
1http://shrm.org/foundation/1006employeeengagementonlinereport.pdf 2http://www.valuentis.com/Publications/Journal/JoAHCM_VOL1NO1_2007_EmployeeEngagementarticle.pdf 3http://www.workforce.com/tools/whitepapers/TheNewROI_of_HR.pdf 4http://shrm.org/foundation/1006employeeengagementonlinereport.pdf
Key Finding No. 2Employee recognition improves employee engagement, which increases retention and productivity, thereby positively affecting company performance.
As the Society for Human Resource Management
(SHRM) Foundation Report “Employee Engagement
and Commitment” defined it, employee engagement
is a worker’s satisfaction with their work and pride in
their employer and “the extent to which people enjoy
and believe in their work and the perception that the
employer values what they bring to the table.”1
In 2007, the International School of Human Capital
Management Faculty of Employee Engagement de-
fined employee engagement as an output-based con-
cept that describes how aligned and committed em-
ployees are to the company, such that they are at their
most productive.2
Generally, definitions of employee engagement de-
scribe an employee attitude that results in a behavior
that positively benefits the company. Although some
may still wonder how something so intangible can be
measured, the proliferation of performance manage-
ment software and the increasing capability to mea-
sure employee attitudes through surveys are making
the naysayers fewer in number.
The financial benefits of engaged employees have
been conclusively established in many surveys.3 But
the data reports the same idea—engaged employees
are more likely to be high performing employees and
less likely to leave their current organization.4
With this in mind, it is not surprising employee engage-
ment, productivity and retention issues are clearly on
the minds of survey respondents. When asked which
HR metrics they consider most important in guiding
corporate strategy, the top replies were focused on en-
gagement, retention and productivity issues.
The most important HR metrics for respondents were
employee engagement at 71.4 percent, employee
productivity at 62.9 percent, and human capital ROI
at 57.1 percent. Interestingly, employee satisfaction
surveys, training ROI and turnover rate all returned
at 55.7 percent.
Most Important HR Metrics
Employee satisfaction surveys
Training ROI
Turnover rate
Human capital ROI
Employee productivity
Employee engagement
0 20 40 60 80 100
71%
63%
57%
56%
56%
56%
TheWhitePaper*
6
Respondents also understand recognition plays a
vital role in attracting and retaining employees. A
clear majority—78.8 percent—said recognition was
an important attraction and retention tool.
When asked why, one survey respondent put it best:
“Our company understands the benefit of having a
performance-based recognition program and how it
helps drive employee engagement. Ultimately, it leads
to satisfied customers, and, if you have satisfied cus-
tomers, they are more likely to purchase again.”
When asked to put it all together, respondents were
near unanimous in their belief that employee recog-
nition improves engagement and productivity, which
affects the bottom line.
Attitudes About Recognition, Engagement, Productivity and Retention
Employee engagement increased employee retention and productivity
Employee retention and productivity have a positive impact on company performance
Employee recognition improved employee engagement
Recognition is an important attraction & retention tool
0 20 40 60 80 100
99%
97%
94%
79%
98.5 percent agreed employee engagement *
increased employee retention and productivity
97 percent agreed employee retention and *
productivity have a positive impact on company
performance
93.9 percent agreed employee recognition im- *
proved employee engagement.
TheWhitePaper*
7
The majority, or 80% of, respondents believe address-
ing the needs of global employees is difficult. Almost
as many—76.6 percent—also find it difficult to recruit
and retain the right talent at the right location.
As difficult as recruiting and retention may be, sur-
vey respondents are also aware these things matter.
More than 55% of survey respondents cited recruit-
ing and retention of the right talent at the right loca-
tion as the one issue with the greatest effect on their
organization.
Key Finding No. 3Business leaders believe creating a universal recognition platform for global companies is difficult.
Motivating and engaging employees is challenging enough when they share
a common office, language and culture. As global business operations cross
international borders, those challenges increase dramatically.
As stated before, survey respondents understand
employee recognition is a key component in engage-
ment and retention, 58 percent of respondents said
creating a universal recognition platform for a global
organization was difficult.
Evidently, this challenge has also prevented many
organizations from implementing a truly global rec-
ognition solution. Even though 88 percent of respon-
dents said their organization has an employee rec-
ognition program in place, only 66 percent said they
have a universal recognition platform.
Developing a Global Recognition System Is Difficult
My organization has an employee recognition platform
My organization has a universal recognition platform
Addressing the needs of global employees is difficult
Recruiting and retaining the right talent at the right location is difficult
Recruiting and retaining the right talent at the right location has the greatest effect on the organization
Creating a universal recognition platform for a global organization is difficult
0 20 40 60 10080
88%
66%
80%
77%
55%
58%
TheWhitePaper*
8
In fact, many respondents did not believe their orga-
nization was taking the necessary steps to measure
and quantify engagement and other HR functions.
Only 52 percent said their organization had a metric
or plan for measuring the effect of employee engage-
ment on company performance.
One respondent articulated why HR must do a better
job to justify its investments and suggested a best
practice: “HR plays a key role in establishing the
business case and instigating the research for new
processes or systems. This will lead to a larger scale
feasibility study where Finance resources are used to
consider ROI and other key financial requirements.
Key Finding No. 4CFOs are not aware of how much they are currently spending on recognition programs.
Even though nearly everyone agrees HR and Finance need to be on the same
page, only 58 percent of respondents say this is the case in their organization.
When asked if their CFO was aware of how much their organization spends on
recognition programs, the response was the same with 58 percent agreeing with
the statement.
CFO is involved in reviewing and approving all HR metrics
0 20 40 60 80 100
22%
HR, Finance Not on the Same Page
Metric/plan in place to measure effect of employee engagement on company performance
CFO aware of recognition program spend
HR & Finance are on the same page
Finance makes final decision to create business and ROI cases for HR process/technology investments
HR makes final decision to create business & ROI cases for process/technology investments
58%
58%
52%
36%
46%
The final proposal will be reviewed by a global steer-
ing group for presentation to the CFO.”
Even though best practice suggests Finance is the
business unit that should require ROI, few survey re-
spondents indicated Finance was taking a leading role.
Only 36 percent of those surveyed said Finance made
the final decision to create business and ROI cases to
justify an investment in new processes, programs or
technologies for the HR department, as opposed to 46
percent who reported HR made the final decision. Also,
only 22 percent said their CFO was involved in review-
ing and approving all HR metrics in their company.
TheWhitePaper*
9
Survey respondents overwhelmingly understand this,
and 95 percent believe the CTO and the CFO should
work together to chart a course for the future. As one re-
spondent explained, “Alignment by these two key sup-
port executives is critical for charting the right course
and staying on course. Human capital is also the larg-
est cost in the organization and the largest competitive
advantage and tool to win in the marketplace.”
Key Finding No. 5The CTO and the CFO must work together to chart the course for the future.
Because Human Resources is expected to measure the performance of the human
capital investment, it comes as no surprise that the work of the Chief Talent Officer
would draw the attention of the Chief Financial Officer.
HR and Finance Should Work Together. But Do They?
The CTO and CFO actually do work together to drive employee recognition
CTO and CFO should work together to chart a course for the future
0 20 40 60 80 100
95%
58%
However, there is a disconnect. In spite of the near-
unanimous agreement that the CTO and the CFO
need to work as a team, only 58 percent of sur-
vey respondents said this was currently the case in
their organization.
In an environment where nearly everyone agrees
that HR and Finance need to collaborate, yet only
slightly more than half say this is happening, room
for improvement clearly exists.
TheWhitePaper*
10
Summary
Business leaders understand HR has the power to
transform an organization by taking a strategic view and
using technology to implement a measurable employee
engagement solution that generates real results. They
also understand employee recognition can improve
employee engagement and—by extension—their bot-
tom line, shareholder value, customer retention and
the ability to retain and recruit new employees.
Even though business leaders recognize the value
and competitive advantage engaged employees of-
fer, they also realize implementing a universal rec-
ognition platform for global companies presents a
serious challenge. How do you develop a recognition
system to motivate employees that crosses borders,
languages and cultures?
As the leading provider of on-demand strategic
reward and recognition solutions for global com-
panies, Globoforce suggests these best practices
developed in partnership with the world’s largest
and most diverse companies:
Establish a Clear, Global Strategy for Recognition: *
Strategic recognition delivers a clear financial and
cultural return. Fragmented, disparate programs
and systems undermine those benefits. Global
companies need global strategies that treat all em-
ployees consistently in a transparent, auditable and
measurable way across the program.
Secure Executive Sponsorship with Defined *
Goals: Like all other global strategic initiatives,
recognition must also be managed using a pro-
cess such as Six Sigma’s DMAIC guidelines or
other operational excellence program. Organiza-
tions must hold managers accountable for suc-
cess by setting measurable goals for frequency
of recognition, program adoption, budget, speed
and employee satisfaction scores.
Align Recognition with Corporate Values for *
Global Understanding: Businesses can derive
additional strategic benefits from a recognition
program that rewards behaviors consistent with
company values. Not only is this virtually the only
way to bring values alive every day for a ll employ-
ees in a large company, it gives the organization a
measurable way to see if employees understand
the values and if the values are gaining traction
across a global organization.
Offer Everyone an Opportunity to Participate: *
Open the recognition program to all employees,
not just the elite few. This overcomes the skepti-
cal concerns of employees, such as those made
by one survey respondent: “Employee recogni-
tion programs have been tried in the past and
have become popularity contests. Many who
work very hard and keep their mouths shut
don’t ever get recognized, and those in the
limelight get recognized over and over again.”
By offering everyone an opportunity to participate
in the recognition program through peer-to-peer
options in addition to the more traditional manag-
er-to-subordinate model, companies can begin to
fine-tune their culture and social architecture to
align with the company’s values and mission.
Motivate and Acknowledge All Employees with *
the Power of Individual Choice: True choice ca-
ters to the demographics of a worldwide, multi-
generational workforce with millions of options
that are culturally appropriate, meaningful and
memorable to the individual recipient. Meaning-
ful reward options reinforce the power of the rec-
ognition moment with a lasting item that reminds
the recipient the company values him or her.
TheWhitePaper*
11
The survey was sent via email to HR and Finance
professionals during the first quarter of 2008. Over
266 responses were received. Each respondent an-
swered the questionnaire via an online survey tool
and was assured of his or her confidentiality.
Their responses were used to drive the results and
Demographics
Methodology
conclusions of this report and will be used only in
this aggregate analysis.
The Key Findings herein are based at the 95 percent
confidence level with a +/- 10% margin of error.
The demographic composition of the respondent
pool provides a representative sample of global 2000
organizations. All of the respondents are from orga-
nizations with more than 10,000 employees engaged
in global operations.
The majority of respondents were between the ages
of 30-49; 43.8 percent were male and 56.3 percent
were female.
Respondents represented a variety of roles within
their organization.
The industries represented by respondents were
also varied.
Over 80 percent of respondents had responsibilities
within the broad category of human resources while
20 percent had responsibilities outside of HR.
57%
6%18%
19%
C-Level
VP
Director
Manager
Respondents Roles
80%
20%
HR
Outside HR
Job Responsibilities
High Tech
Mfg/Aerospace & Defense
Finance/Insurance
BioTech/Pharma/Healthcare
Bus. and Prof. Services
Transportation
Utilities/Oil & Gas
Retail/Wholesale Trade
Consumer Packaged Goods
Education
Hotels/Restaurants/Leisure
Other
Industry Participation
22.4%16.4%
10.6%
6.1%5.9%5.9%
3.6%3.6%3.5%2.4%
2.4%
17.2%
Globoforce (North America)Reservoir Corporate Center
144 Turnpike Road, Suite 310, Southborough, MA 01772 USA
Phone: +1 (888) 7-GFORCE (436723) Fax: +1 (508) 357 8964 Email: [email protected]
Globoforce (Europe)6 Beckett Way, Park West Business Park, Dublin 12, Ireland.
Phone: +353 1 625 8800 Fax: +353 1 625 8880 Email: [email protected]
© 2008, Globoforce Limited. All rights reserved. No portion of this publication may be reproduced in any form without express written permission from Globoforce.
About Globoforce
Globoforce is the leading worldwide provider of on-demand strategic reward and recognition solutions for Global 2000 companies. Globo-
force’s flexible and efficient recognition tool can scale from one user to millions of users with ease, offering global companies a powerful and
secure solution to implement and manage their companywide or divisional employee recognition programs. Through a dynamic, easy-to-use,
on-demand technology platform, Globoforce transforms the way companies engage, motivate and empower their workforces across the world.
Co-headquartered in Southborough, Mass., and Dublin, Ireland, Globoforce was recently selected by the Great Place to Work® Institute as one
of the “50 Best Companies to Work For.” Globoforce won a 2007 Process Innovation Award for the creative deployment of Dow Chemical’s
global, on-demand employee recognition program. Globoforce also won Human Resource Executive magazine’s coveted “Top HR Product of
the Year” award in 2004 for its revolutionary on-demand software solution. Some of Globoforce’s world-class customers utilizing this enterprise-
class solution include Amgen, Avnet, Dow Chemical, Intuit, Procter & Gamble and Reuters. www.globoforce.com.