On 16 July 2009, Lord MacLeod and Nita Clarke published a review on employee engagement to Lord Mandelson. The Report Engaging for success argues strongly for effective strategies to achieve engaged employees.
Employee engagement has been a crucial part of my responsibilities throughout my career. In my previous lives as a trade union official, an employer representative and now as chief executive of ACEVO, I have been only too aware of the fundamental importance of involving employees at all levels. So I was very glad to be asked by the Secretary of State to represent the third sector on the ‘sponsor group’ for the MacLeod Review.
The group has been tasked to ensure the recommendations of the review are carried out. Members of the sponsor group include figures such as the Cabinet Secretary; the director generals of the CBI and IoD; Brendan Barber from the TUC; and Rona Fairhead, chief executive of the Financial Times. The aim of the ‘sponsor group’ is to produce tools and advice to encourage engagement.
For a chief executive to be successful, employee engagement is critical. This is the case in any sector, but in particular in the third sector, where human capital is an organisation’s most important asset and employees are very often emotionally attached to the cause. This does potentially mean that employees are more effective in their roles, but it can also be more challenging to manage.
Third sector organisations therefore have to harness the human capital to ensure the sector can be as effective as possible. Chief executives need to view employee engagement as a core part of best practice. Third sector organisations have a duty to their beneficiaries, but they also have a duty to their employees to be good employers. Not only does effective employee engagement help increase the efficiency of the front line but also internal reviews can help management become more effective and generate new policy/practice from the experience of those at the front thereby creating more effective organisations.
Employee engagement is more crucial than ever in the current environment. With the recession and spending cuts looming around the corner, employers have the extra challenge of maintaining staff levels. This undoubtedly requires putting extra resource and effort into engaging staff. When organisations have to implement cuts or redundancies it will almost always demotivate the team unless there has been strong involvement from staff. This may be through a union where these are involved, or through consultative mechanisms. Some chief executives think this is so difficult, that it is better not to involve staff. But being up front with your problems is the best approach. Staff are better at coping with bad news than we sometimes think! Relentless communication at all times, but especially in bad ones, is key. As a leader it is crucial that our team understands our vision and strategy, and that we constantly keep them updated on the details of the organisation’s development.
The MacLeod report says:
‘Engaged organisations have strong values, with clear evidence of trust and fairness based on mutual respect, where two way promises and commitments- between employers and staff-are understood and are fulfilled.’
How true this is of the third sector. One of our sector strengths has always been our people and keeping those people inspired. Capturing their imagination is key to us maintaining this. As employers of over 1.3 million people, the third sector employs more staff than the entire financial services industry. It has an incredibly good business sense. The sector recognises that it cannot pay the same salaries (or bonuses) as the private sector, and that it needs to engage employees at all levels. It is not just the sector’s paid staff it needs to engage with but also its 6 million volunteers who give their time.
Nita Clarke, Vice Chair of the MacLeod Review, also wrote a powerful report for ACEVO on trade unions and the third sector in 2008. The report entitled, ‘ The Way Ahead’ recommended that charities and voluntary organisations should draw up a collective agreement with trade unions in order to improve relationships and avert disputes . The report also called for the sector to set ideological differences aside and the establishment of a method for allowing regular dialogue between unions and third sector organisations. We were therefore delighted in April this year when the trade union, Community, joined ACEVO as a full member. Clearly a step in the right direction.
It is not, however, just trade union representation that is required, all organisations need proper mechanisms to promote employee engagement, which is why ACEVO launched a working group of chief executives this year to examine and advise on the most appropriate support and guidance for third sector leaders to engage more effectively with employees.
There is clearly no ‘one size fits all strategy’ but whatever an organisation’s agreed strategy, it needs complete buy in and belief from management. Management must be able to implement what they say they will, otherwise employees will lose trust. The role of the chief executive is critical in all of this, as chief executives we are not only figureheads of our organisations, but we set the culture and tone of our organisations, which will in turn foster engagement.
Employee engagement is getting higher on the agendas of chief executives in the third sector. This should be the same across all sectors.