Employers looking to increase shareholder returns and reduce employee turnover
might want to look at how well they are communicating with workers, according
to a study by Watson Wyatt.
The study found that companies with the most effective employee communication
programs provided a 26 percent total return to shareholders (TRS) , compared
to a negative 15 percent TRS experienced by firms that communicate least effectively.
The study also found that a significant improvement in communication effectiveness
is associated with a nearly 30 percent increase in market value.
"The survey results clearly demonstrate that the better a company has
communicated with its workers, the better its shareholder returns have been,"
said Kathryn Yates, one of the study's co-authors. "The bottom line is
that employee communication is no longer a `soft' function but rather a business
function that drives performance and contributes to a company's financial success."
A total of 267 U.S. companies participated in the study, which examines the
relationship between an organization's communication strategy and practices
and its shareholder returns. The respondents are primarily large companies and
represent all major industry sectors in the United States.
Reducing Turnover by Increasing Communication
The survey also found that high levels of effective communication have a positive
impact on employee turnover. According to the survey, companies that communicate
most effectively are more likely to report turnover rates below those of their
industry peers than companies that communicate less effectively (51.6 percent
versus 33.3 percent).
The study identified nine communication practices that are directly linked
to an increase in shareholder value. The three practices associated with the
largest increase in shareholder value are driving managers' commitment to effective
communication, having a formal communication process in place (including a documented
communication strategy and implementation plan) and creating a clear line of
sight between business objectives and employees' jobs.
Employee Newsletters--On Your Intranet
Corporate intranets are shedding their image as a pit stop on the Information
Superhighway, instead becoming an important destination for employees separated
by work schedules, travel demands, and office locations.
Companies are investing more time and money in designing on-line tools to facilitate
internal communications, outsource human resources functions, and foster a sense
of community among employees.
Interest Growing, Multiple Uses
A survey conducted by employment consultant Watson Wyatt Worldwide, Bethesda,
Maryland, showed that fully 79 percent of 295 companies polled use their intranet
as the chief method of delivering human resource services and information to
employees, up from 50 percent two years ago.
Ken Barksdale, president of RewardsPlus, a Web-based benefits company, noted that companies are only tapping the surface of the potential
of their intranets. According to research conducted by RewardsPlus, employees
are interested in a life-event focus design to their website--focusing on
specific events in an employee's life and the subsequent action steps to follow.
Some initiatives employers are reviewing as enhancements to intranets include
- E-commerce capabilities and employee-driven volume purchasing
- Employee self-service (managing benefits, 401K)
- Ability to pay personal bills
- Instant messaging and bulletin boards
- Weather updates for traveling employees
- Company-wide scheduling/calendar access
- Ability to buy and order lunch from the corporate cafeteria or a nearby
- Local news updates
- Company Directory
- Form Submittal (Vacations, Personal Days, Sick Leave, Expense Reimbursement)
- Links to Vendors (Travel Agents, Childcare, Real Estate Brokers)
- Stock Information
- Online shopping access
"The beauty of the corporate intranets is that the possibilities are limitless,"
summed up Barksdale. "For employers it's an efficient way to communicate
with employees and boost morale; for employees, it's the best way to solve the
issues of every day work--and life."