A guide to Employee Voice
Employee Voice is frequently misunderstood and widely confused with employee engagement - which it is a core enabler of. In this guide we provide a summary for executives to understand topic better and why it is increasingly seen as a part of good corporate governance.
What is Employee Voice?
In their factsheet the CIPD define
Employee Voice is part of a wider movement towards incorporating multi-stakeholder feedback into corporate governance, and as such is a key contributor to sustainable business and investing initiatives.
What are the benefits?
Employee Voice is widely recognised as contributing to sustainable business performance. The three ways in which it can do this are:
- As an enabler of Employee Engagement
- By supporting effective decision making
- By contributing to innovation
Whilst many HR departments have been passionate advocates of employee engagement, few have been so powerful advocates of using Employee Voice to contribute to decision making or innovation. In our experience the direct link between Voice in these areas and measurable business value is clearer.
Employees are often best placed to contribute their collective knowledge, experience and expertise. They are close to customers, understand their needs and know how the organization works in practice. They understand the products and services, where processes are inefficient and often how to make them better.
Traditionally executives used hierarchical mechanisms to bring this information into decision making. As businesses have become more network-oriented and agile this approach isn’t enough. In many instances this approach is akin to the game of ‘Chinese Whispers’ - where the information at the front line is distorted via layers of management eager to communicate what they think executives want to hear.
Employee Voice, done well and helped by modern technology can bring insight to executives in a deeper, cleaner, and often quicker manner than other information sources.
What are the challenges?
In a small or medium sized organizations the executive can get a good understanding of Employee Voice through direct communication. As the organization size increases, or the geographic distribution widens, this approach becomes more difficult. An increase in the number of languages further increases the complexity of listening.
Employee opinions and ideas are heterogeneous and different employees’ opinions might conflict. High performers often have different perspectives than average performers. Individuals in one part of the process or customer journey may have a different view than those involved in another. Political pressures might result in only employees in certain areas are effectively heard.
Organizations must deal with these complexities regardless of the legal constraints faced. For all organizations of a certain size or complexity the greatest challenge is how to understand Voice, to summarise it, to identify implications and to spot the unique ideas which might reshape the business.
How to capture & understand Voice
There are many ways to collect and collate Employee Voice including:
- Employee surveys
- Email feedback
- Employee forums
- Unions and Works Councils
- Internal social media
The gold-standard is certainly to adopt an multi-faceted approach using the relevant approach depending on the topic and area of interest.
Over the last 30 years in many Western countries there has been a shift away from collective forms of Employee Voice and towards more individual approaches. Arguably this has resulted in more ‘informing’ and less ‘listening’ in employee communications.
Our experience of working with executive teams is that open, qualitative feedback is most valuable at identifying the range of ideas and feedback of your employees. Whilst this qualitative information traditionally meant long lead-times and expensive, labour-intensive analysis modern ‘AI’ approaches, especially the ability of systems to make sense of large volumes of text, make asking open questions the most cost-effective and rapid way of understanding the collective Employee Voice.
Regardless of the way that Employee Voice is brought to executive attention, the early stage of identifying the variety and breadth of opinions remains constant.
Employee Voice and People Analytics
As one of the pioneering People Analytics practices we are acutely aware of the opportunities from combining Employee Voice and other forms of Employee data.
The People Analytics approach is to combine Employee Voice and HR data together in a confidential manner and use this combined data to identify patterns that will frequently add considerable context and aid decision making.
A good example is some work we conducted for a major financial services firm. A new CEO asked for feedback as part of his, and his strategy team’s drive to evaluate the business.
In the thousands of detailed responses that they received from their global employee base we identified a small number which discussed a poorly performing, yet important contract. When linked to employee data we could identify that this information was concentrated in a data science team in corporate IT.
With the increased visibility the strategy team were able to investigate further and the project was effectively de-risked resulting in a multi-million dollar potential saving.
Changes to the UK Corporate Governance legislation
The UK Government has started a process to reform the UK Corporate Governance Code. Specifically it was to legislate on provisions Employee Voice being stregthened.
The green paper provided 3 specific alternatives for achieving the inclusion of Employee Voice in decision making:
- Designate existing non-executive directors to ensure that the voices of key interested groups, especially that of employees, are being heard at board level;
- Create stakeholder advisory panels; or
- Appoint individual stakeholder representatives to company boards.
In 2017 the UK Government requested that the Financial Reporting Council conduct a consultation process that would impact organizations with more than 500 UK employees. Specifically it stated that:
To achieve a wider stakeholder focus we have drawn on our Culture Report. The findings of this report demonstrated the importance of aligning company purpose, strategy and values in order to achieve long-term success. Successful companies should be open and accountable to their workforce. The revised Code is clear that two-way dialogue is necessary to achieve good governance, with companies putting in place practices and processes to achieve that.
Consultation closed at the end of February 2018. As stated by the Government:
The FRC intends to consult on amendments to the UK Corporate Governance Code in late autumn with a view to publishing a revised code by mid-2018. This would mean the code would apply to the majority of companies in 2019
Our view is that all 3 suggested alternatives require a sound and auditable way of collecting, analysing and acting upon employee voice.
Papers and Reports
- Releasing Voice for sustainable business success IPA and tomorrow's company
- Workers' voice in corporate governance: A European Perspective TUC
- Bringing employee voice into the boardroom tomorrow's company
- Going Digital? Harnessing Social Media for Employee Voice acas
- Employee Voice CIPD factsheet and information hub
UK Corporate Governance reforms
- Corporate Governance Reform: The Government response to the green paper consultation
- Press Release from the Government
- Financial Reporting Council document starting the consultation process
- CIPD response to the consultation process
- Nationwide Building Society response to UK Corporate Governance Consultation Their response to Q3 on Employee Voice gives a good indication of the desires of major UK companies to incorporating Employee Voice into statutory regulations.
Interviews and media articles
This is why the employee voice is so important to hear Interview with Gerry Gaetz, CEO of Payments Canada in Financial Post discussing how he brings Employee Voice into decision making
Using Employee Voice in Open Innovation. An interview we conducted with Yves Zieba, a prominent Swiss expert on Open Innovation