New Engagement Survey Metric Uncovers More Risk For Employers Who Want To Keep Their Top Performers
HR departments typically track dozens of metrics, many of which are ignored by CEOs. But Leadership IQ has developed a new HR metric that links employee engagement survey scores with performance appraisal ratings. And itís quickly capturing executivesí attention, with articles and commentary across every major business information medium.
Leadership IQ researchers linked employees' scores on their annual engagement surveys with the scores they received on their annual performance appraisals at 207 companies. And then, by identifying statistical relationships between engagement and appraisal scores, Leadership IQ is able to make predictions and recommendations about high performer turnover, low performer accountability, middle performer development, and much more.
In the latest example of this metric, Leadership IQ identified that in 42% of the companies, low performers are MORE engaged than high and middle performers.
Leadership IQ's study, titled "Job Performance Not a Predictor of Employee Engagement" also detailed a 1,000-person technology-services firm, where low performers were more engaged than high performers. The annual appraisals at this technology firm use a 4-point scale, ranging from Unacceptable to Superior. According to the companyís 2012 statistics, 18% of employees can be considered low performers, 20% are considered high performers, and 62% are considered middle performers.
After Leadership IQ administered an employee engagement survey, it found Ö
Low performers were significantly more motivated to give 100% effort at work than high performers
Low performers were significantly more likely to recommend the company as a great organization to work for than high performers
Low performers were significantly more likely than high performers to believe that leadership holds people accountable for their performance
Low performers were significantly more likely than high performers to feel that all employees live up to the same standards
Examining these findings, the firm then expanded the review across more than 200 companies and the results were amplified. There are ample reasons why these findings put organizations at risk. One of them is the fact that high performers, who thrive on being highly engaged, donít tend to stick around very long if they arenít engaged. Itís disturbing news for any company that believes their people are their most important asset.
The best leaders are responding by learning the facts and taking action. They discover and act on the factors pushing valuable employees out the door and build on the factors that tug at them to stay. They take action to make all employees more mentally and physically accountable.
Great organizations also identify the key attitudes that define their success and failure so their leaders can accurately identify, reward and correct behavior according to actual employee performance. They make sure employees, especially high performers, understand the company vision and they recognize that what defines most low performers is the wrong attitude (not a lack of skill).
Lower Expectations for IT Spending as Sequester & Global Economic Uncertainty Impact Business Confidence
According to the just released International Data Corporation (IDC) Worldwide Black Book (Version 1, 2013), IT spending was slightly below expectations in the second half of 2012 and first quarter of 2013. Economic uncertainty surrounding the U.S. government sequester, European debt crisis, and weakening GDP in China has resulted in volatile spending patterns across most segments of the market, with many IT vendors reporting difficulty closing deals at the end of Q1 2013. IDC now projects worldwide IT spending growth of 4.9% this year in constant currency, down from the previous forecast of 5.5% growth and representing a slowdown from the 5.6% growth recorded in 2012. As a result, worldwide IT spending is forecast to reach $2.06 trillion in 2013. Worldwide ICT spending, which includes telecom services spending, will increase by 4.5% to $3.7 trillion.
The strength of the U.S. dollar may continue to have an adverse impact on the reported revenues of U.S.-based IT vendors. In 2012, IT spending increased by just 2.9% in U.S. dollars, a significant downturn from 9.5% U.S. dollar growth in 2011. Based on average exchange rates from Q1 2013, this year's growth is on track to increase by 4.2% in U.S. dollar terms.
Deteriorating PC Shipments
The reduction in IDC's overall forecast for 2013 is largely driven by rapidly deteriorating PC shipments since the second half of 2012. According to the new report, IDC now expects PC spending to decline by 3% in constant currency this year, representing a third successive year of declining PC revenues. The shift to mobile devices remains a key driver for overall tech spending growth. Excluding mobile phones and tablets, worldwide IT spending increased by only 2.8% in 2012 and is forecast to grow by just 2.6% this year. Worldwide spending on smartphones will increase by 17% in 2013 while tablet spending will grow by 32%.The combined growth rate for PCs and tablets, meanwhile, will remain stable in the range of 4-5%.
Cloud Services Cannibalizes Software and IT Services
Just as tablets are cannibalizing PC spending, so the growth of cloud services continues to cannibalize commercial software and IT services. Software spending in the U.S. grew slightly slower than forecast in 2012, and IDC has consequently reduced the U.S. software forecast to 6% growth for 2013 (from 7%). IT services demand remains stable, but the pass through from capital spending and software deployment remains tepid by historical standards. IDC now forecasts growth of 5.6% in worldwide software spending in 2013 (constant currency), and 3.8% in IT services.
Decline in Server Revenues
Meanwhile, the report suggests a decline in overall server revenues while storage infrastructure spending will cool somewhat after the major spending cycle of 2011/2012. IDC now projects 2.4% growth in worldwide storage hardware revenues this year, down from 6.1% growth in 2012. Network infrastructure investment was strong in 2012, as many carriers invested in the deployment of LTE networks, but this will also cool in 2013. Service provider spending on network equipment will increase by 1.1% this year, compared to 5.8% in 2012. Enterprise network spending should remain more stable, projected to post growth of 6.8%.
Emerging markets are still the engines of growth for worldwide IT spending, with strong trends continuing in markets such as India and Brazil in recent months. The weakest performing geographies will be Western Europe and Japan, where slow economic growth is inhibiting IT spending while the U.S. market remains fragile in the context of political uncertainty.
Consumerization, Systems of Engagement Driving Business Spend on Technology
Less than 10% of business decision-makers outside of IT are not spending their own budget on technology services, and of the 90% that are, almost a quarter of them earmark 21% or more of their unit's expenditures for IT, according to new research from Forrester. Interestingly, this group, which Forrester calls "high spenders," has good relationships with IT and views the CIO and his/her office more positively than lower-spending business leaders.
Twenty percent of high spenders say that their use of consumer technology has changed their expectations of how technology should be used. This group is also opening its wallet to systems-of-engagement-focused technologies: They are three times more likely to be hiring their own IT staff than low spenders -- the 30% that spend 1% to 5% of their budget on IT -- and two times more likely to be investing in smartphone apps and analytics.
Forrester's Forrsights Business Decision-Makers Survey, Q4 2012, found that:
Financial services firms do the most business buying of any industry vertical. Ninety-five percent spend their own money on technology, and 38% fall into the high-spender category.
BYOD is not about attracting younger employees ó it's about executives. Thirty percent of senior managers are high spenders.
More business buyers are increasing their spending budget than IT. Business buyers are 20% more likely to increase their spending in technology in comparison with IT decision-makers. High-spending business leaders are 50% more likely.
Gartner: Half of Employers will Require Employees to Supply Their Own Device for Work Purposes by 2017
As enterprise bring your own device (BYOD) programs continue to become more commonplace, 38 percent of companies expect to stop providing devices to workers by 2016, according to a global survey of CIOs by Gartner, Inc.'s Executive Programs
Gartner defines a BYOD strategy as an alternative strategy that allows employees, business partners and other users to use a personally selected and purchased client device to execute enterprise applications and access data. It typically spans smartphones and tablets, but the strategy may also be used for PCs. It may or may not include a subsidy.
BYOD drives innovation for CIOs and the business by increasing the number of mobile application users in the workforce. Rolling out applications throughout the workforce presents myriad new opportunities beyond traditional mobile email and communications. Applications such as time sheets, punch lists, site check-in/check-out, and employee self-service HR applications are just a few examples. Expanding access and driving innovation will ultimately be the legacy of the BYOD phenomenon.
While BYOD is occurring in companies and governments of all sizes, it is most prevalent in midsize and large organizations ($500 million to $5 billion in revenue, with 2,500 to 5,000 employees). BYOD also permits smaller companies to go mobile without a huge device and service investment. Adoption varies widely across the globe. Companies in the United States are twice as likely to allow BYOD as those in Europe, where BYOD has the lowest adoption of all the regions. In contrast, employees in India, China and Brazil are most likely to be using a personal device, typically a standard mobile phone, at work.
How a well-managed BYOD program subsidizes the use of a personal device is critical, and can dramatically change the economics. Today, roughly half of BYOD programs provide a partial reimbursement, and full reimbursement for all costs will become rare. Gartner believes that coupling the effect of mass market adoption with the steady declines in carrier fees, employers will gradually reduce their subsidies and as the number of workers using mobile devices expands, those who receive no subsidy whatsoever will grow.
BYOD does increase risks and changes expectations for CIOs. Unsurprisingly, security is the top concern for BYOD. The risk of data leakage on mobile platforms is particularly acute. Some mobile devices are designed to share data in the cloud and have no general purpose file system for applications to share, increasing the potential for data to be easily duplicated between applications and moved between applications and the cloud.
However, in general, IT is catching up to the phenomenon of BYOD. More than half of organizations rate themselves high in security of corporate data for enterprise-owned mobile devices. This new confidence in the security posture to support BYOD is a reflection of more-mature tools and processes that address myriad needs in the security area.
Salesforce.com passed SAP as the lead vendor in the worldwide customer relationship management (CRM) software market in 2012, according to Gartner, Inc. Total worldwide CRM software revenue totaled $18 billion in 2012, up 12.5 percent from $16 billion in 2011.
Vendors benefited from strong demand for software as a service (SaaS), which represented nearly 40 percent of CRM total software revenue in 2012, as organizations of all sizes sought easier-to-deploy alternatives to replace legacy systems, as net-new applications or to provide alternative complementary functionality.
The top five CRM vendors accounted for nearly 50 percent of CRM software revenue in 2012. Salesforce.com replaced SAP as the largest vendor in the CRM market as its direct sales pushed its CRM revenue to more than $2.5 billion. Second-place SAP's growth was less than one percent in USD terms, largely because currency headwinds were stronger in 2012 and the euro was weak. While SAP was not the worldwide leader in CRM for 2012, it was still the largest vendor in terms of revenue in Western and Eastern Europe.
North America and Western Europe remained the largest regions for CRM, accounting for more than 80 percent of total software revenue, but all regions saw growth. Western Europe's growth was less than one percent, due in part to the strong dollar, which made overall comparisons with prior years difficult. Overall spending in the IT market in Western Europe has been muted because of economic reasons. Areas of growth continued to be in Eastern Europe, Eurasia, and the Middle East and Africa, which saw IT spending for the modernization of countries' infrastructure (utilities, telecommunications, banking and government).
In 2012, vendors continued to expand their offerings with new features and functionality, often through acquisition. The wave of consolidation activity that began flowing through the market in 2009 continued throughout 2012, with more than 50 acquisitions, resulting in increased competition at the top end of the market, with the real start of the global sales forces kicking in some sales. Marketing has been the focus for investment in the past couple of years, growing at more than four times the software industry forecast norm in 2012. Marketing was also the target area for acquisitions by IBM, Microsoft, Oracle and others as analytics, lead quality and multichannel support for social and mobile technologies continue to lead the list of requirements by line-of-business buyers.