“I feel this is more than an organization, it is a revolution and I am proud to be a part of it” - Google employee
One of the most difficult areas, where the best employers have fared much better than others, is in fair pay and fair share of profits
In today’s multi-generational workforce, it is the unique practices and work-culture that make organizations a great workplace.
The economic recession of 2008-09 is a fading memory, with a steady 8% plus GDP growth in 2010-11, showing promise of the heady days of 2007-08, when the economy was briefly poised to cross the barrier of 10% GDP growth.
Yet, it has been a season of discontent. Inflation has forced many employees, particularly below managerial levels, to postpone major decisions like asset creation. Though, India Inc. has somewhat reluctantly opened its purse strings, they are not as wide as in 2007-08, and mostly in the form of variable pay. While most organizations are hiring, not many are talking about doubling employee numbers in 2-3 years. Yes, things are better, but even the best employers are not immune to the cynicism about governance and corruption in public life impacting “civic society”, the younger generation in particular. And let there be no doubt, the young have now taken over the workforce, with our data showing that 73 percent of the workforce in India Inc. is less than 35 years of age.
Last year, in the first 3 months of 2010, when we had conducted our Study, we found that overall employees’ positive perceptions about their organization had gone down across the board and for the first time, even in the Top 25 best workplaces. We assumed that with economy rebounding from recession, employee expectations have gone up and hence the drop in scores in our Study. Surely, with most corporates giving larger salary increases in 2010-11, will employees in 2011 not have a more positive perception about their workplaces? Our Study answers this and many other questions.
Great Place to Work® Institute pioneered the practice of studying and recognizing best workplaces globally. Over 2.5 million employees of more than 5500 organizations in 45 countries participate in our Best Workplace studies each year, making this the largest global study of its kind in the world. Inspired by the vision of ‘making India a great place to work‘, the Institute has been conducting workplace studies and recognizing the best companies in India for the past 8 years. ‘India’s Best Companies to Work For’ Study, conducted by Great Place to Work® Institute India, in collaboration with The Economic Times, is by far the largest workplace study in India.
Over 500 organizations registered for this year’s study. This is more than double of any other published study in India. Out of them, 471 met our eligibility requirements and were, therefore, considered for being ranked as one of ‘India’s Best Companies to Work For’ in 2010. Only 50 out of them made it to the coveted Top 50 in our study - roughly one in ten who participated, making this perhaps the most exclusive list of best employers globally. Over 100,000 employees were surveyed and 66 percent of employees responded to our surveys. In all cases, the stratified random sample was selected not by the participating organization, but by the Institute. The coverage is across 20 sectors, encompassing not only Indian and multinational companies in the private sector, but also public sector and not-for-profit organizations. This makes this Study the most comprehensive and representative study of workplace culture in corporate India.
What is different about this Study?
The Great Place to Work® framework is based on over 25 years of research of the best workplaces across the globe from employees’ point of view. A ‘Great Place to Work’ has a simple definition. If you trust the people you work for, take pride in what you do, and enjoy the company of people you work with, you are in a Great Place to Work®.
It is perhaps the elegance of this definition, plus the fact that unlike other surveys, the Great Place to Work® model looks at workplace relationships from the employees’ perspective, that make this the most widely used framework to understand best workplaces. The completely employee-centric model of this Study gives two-third weight to an anonymous survey of employees of participating organizations, and one-third weight to our analysis of the people practices that impact creation of great workplaces. Independent studies have corroborated the business benefits of creating great workplaces.
Key trends in the best workplaces
As in the previous years, the Top 50 best workplaces are concentrated in Mumbai, NCR and Bangalore, but also have representation from Chennai, Pune, Vizag, Ahmedabad and Ludhiana. Participation from organizations beyond the major metros will be a key challenge for the Study in coming years.
Only 2 of the Top 50 companies are less than 5 years old. 39 are more than 10 years old and 22 are more than 20 years old (which also includes a few which are more than 100 years old!). For most Indian companies, it seems to require at least 10 years or more to come to a stage where employees will give their vote of confidence to the organization. Interestingly, 31 of the Top 50 best workplaces are led by a leader who was promoted from within the organization.
Contrary to what some believe, 38 of the Top 50 have more than 1000 employees, with 19 out of 50 having more than 5000 employees. Only 12 of the Top 50 best workplaces saw employee increases of more than 30 percent in the previous year and 5 actually reduced its workforce.
The percentage of women continued to be low with only 5 of the Top 50 employing more than 40 percent women employees. Thirteen of the Top 50 companies have less than 10% of their employees who are women. Only 8 of the Top 50 have more than 20 percent of their senior management as women.
While 8 out of the Top 50 best workplaces have employee attrition of over 20 percent, however, in all major industries, attrition for the Top 50, on an average, is less by one-third to two-third of the industry average.
Overall, one of the biggest improvements in workplace culture shown by the best workplaces over the years, has been in the area of work-life balance, flexibility in being able to take time off when required, and creatively designing and implementing practices and policies which are perceived as special and unique benefits by employees. These are also the areas where most organizations are unable to match the best workplaces.
One of the most difficult areas, where the best employers have fared much better than others, is in fair pay and fair share of profits. Corporate India has loosened its purse strings in 2011 and in the Top 50 best workplaces this year, 4% more respondents in our survey are agreeing with the statement that they receive a fair share of profits made by their company and 3% more agreeing that they are paid fairly for the work they do. Fair pay and fair share of profits had seen the biggest dip in our previous study at the beginning of 2010. Apart from these tangibles, what really differentiates the Top 25 best workplaces from the rest is their management’s ability to attract talent who fit in well, build a culture where honest mistakes are not penalized, ensure impartiality at the workplace and make their organizations fun places to work.
What can we learn from the best workplaces?
Our last four studies have yielded enough evidence for us to now be able to confidently talk about the journey of creating a great workplace. There are different phases in this journey. However, there is logic in ensuring that the previous phase is in place before you embark on the next phase.
PHASE 1: Building the foundation - Articulating a people philosophy
In the best workplaces, the ‘people–service–profit’ chain is well understood, be it a Google that says its core value is, ‘We want to work with great people’, or HCL Technologies who talk about their ‘people-first’ culture. Make no mistakes, these are shrewd business organizations with a sharp focus on the bottom-line, but they know that attracting and retaining the right people is the key to achieve their business results. They are able to link their people philosophy with their talent strategy and structures for employee collaboration, with clear measures.
If your leadership team does not have clarity in this area, then this is the starting point.
PHASE 2: Strengthening the foundation
Regardless of what you are doing to create a great place to work for, it pays to focus on the elements which our research shows are the most difficult to build, and therefore, are the ‘differentiators’ in a great workplace:
Equity - Fair share of profits/fair pay and creating ‘special and unique’ benefits. A manufacturing organization Classic Stripes, which jumped in ranks many places to number 6 in our Top 25 list, gives profit sharing on a monthly basis to all employees.
Reliability - Management delivers on their promises and gives straight answers. Agilent, Scope International, Accenture are some of the organizations that have a transparent feedback process for managers and recognize those whose teams give them high scores in this area.
Impartiality - People avoid politicking/managers avoid playing favorites/promotions go to deserving people. In Equitas, one of the best workplaces in microfinance, everyone can calculate their own increments. The CEOs’ salary is capped at 40 times the entry level salary.
Caring - Flexibility, work-life balance and creating a fun place to work is another area whose importance has grown manifold in recent years with the increase of younger employees in the workforce.
The above areas are more difficult than arranging employee engagement parties and numerous other activities that organizations do to attract and retain employees. The Institute studied 15 people practices in all the best workplaces. The best workplaces have, through a process of iteration, designed and implemented processes that enable their senior managers to deliver the above.
PHASE 3: Building the pillars – creating great people managers
The focus of this phase is to equip the people managers, at all levels, with the skills required to engage with employees to build trust, pride and camaraderie, which create a great workplace for their respective teams. The best workplaces have institutionalized the process of seeking employee feedback and linking the people managers’ scorecard to his performance review. One of the biggest challenges in organizations in India is inadequate skills of people managers and lack of incentive to be great people managers. In the ‘people–service–profit’ model, the organization might be able to convert good service to profits, but it is the supervisor who can convert people to good service.
PHASE 4: Putting the roof – articulating and institutionalizing your employer brand/employee value proposition
A common mistake many organizations make, is prematurely communicating to the external world what a great employer they are, without doing the hard work in the previous phases.
In organizations with strong employer brands, there is very little dissonance between what employees experience internally and what the organization communicates externally. The best workplaces do not try to be good at everything. They are keenly aware of the ‘key drivers’ of their employer brand–factors that have a disproportionate impact on the overall employee perception of working in a great workplace. While key drivers can vary in different organizations, our 2011 Study shows that, in general, the following factors have a disproportionate impact on overall employee sentiment in an organization:
Attracting talent for key positions – Employees believe they are working in a great place to work if they see great talent joining their organization!
Equity – Treated as a full member regardless of position. As a rule, employees in organizations with less visible hierarchy, greater egalitarian spirit and more equitable power distribution, tend to have a more positive perception. The CEO of Intel in India sits in exactly the same cabin that everyone else has, travels by economy class like any other employee, and has a laptop which is older than the ones being given to new entry level recruits!
Creating a fun place to work – Statistical analysis only confirms which should be obvious, that a young India and a young workforce want to enjoy their work life and their time at work.
The changed demographics in India Inc. has made the job of creating great places to work for more challenging in many ways with younger employees generally having lesser positive perception about their workplace than older employees. The fact that 14 out of the Top 50 have made it to this elite list of best workplaces for the first time, shows that established best employers will continue to be challenged by newer organizations in the list. However, the vast majority of the Top 25 best workplaces have created strong foundations and formidable barriers for their talent competitors.
Last 4 years’ research strongly indicates that creating practices, policies, processes and managerial capabilities to build equity, impartiality, reliability, caring, sense of fun at work and ability to attract high quality talent, is the way to go. And thinking through and articulating ‘people philosophy and its nexus to business results’, and systematically institutionalizing these practices phase by phase, will make this journey more success prone.
Prasenjit Bhattacharya is CEO of The Great Place to Work® Institute, India. Views expressed are personal. Prasenjit can be contacted at email@example.com. To participate in “India’s Best Companies to Work For” – 2012 Study or know more how to create a great place to work, write to firstname.lastname@example.org or call at 09920866406.