Employee Engagement & Retention in Vietnam: February 2011

Employee Engagement & Retention in Vietnam Summary
February 2011
Presentation to the American Chamber of Commerce by Dr. Brent Ruge
2010 Towers Watson. All rights reserved.
Food for Thought

The Vietnam economy continues to grow quickly, and this is driving a war on talent. What effect do you think this will have on:
z z
Employee Turnover? Employee Engagement?
What factors do you think would drive turnover intentions higher?

z z z z
External pay perceptions Benefits Plentiful opportunities for employment at other companies Career opportunities
What about the business aspect? Do you think that Vietnamese employees sense that their companies are doing well on the following business imperatives:
z z
Innovation Market responsiveness

2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
z Strategy towerswatson.com
Summary
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Engagement & Employee Turnover: Currently, employee engagement levels in Vietnam are higher than in the Asia Pacific Region, but employee intent to stay is lower.
Possible causes for lower employee intent to stay

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In general, many areas of employee opinion in Vietnam have remained stable over the 5-year period (2006 2010), and most of these opinion areas are currently more positive than in the Asia Pacific region, except for:
z z z z
Stress, Balance, & Workload excessive workload and job pressure Pay & Rewards internal pay equity and matching pay to performance Benefits suitability and superiority of benefits program External Job Opportunities
Although employee opinion on Competitiveness in Vietnam is currently more positive than in the Asia Pacific Region, it is on a declining trend in the past 2 years, and this includes competitiveness on:
z z
Quality of products/ services and customer service Development of new products/ services, and responding to market changes
towerswatson.com
Summary
Possible causes for higher employee engagement
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Other areas in which employee opinion in Vietnam is currently more positive than in the Asia Pacific region include:
z z z z
Top managements strategy & direction Employee perceptions of Company Image Effective performance evaluations Empowerment via an innovative climate and involvement in problem solving Increased sophistication in company systems and practices
towerswatson.com
Vietnam Employee Engagement & Retention Levels
Engagement Model: Leveraging business outcomes through employee engagement

To be fully engaged, employees must:
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THINK Rational / cognitive understanding of the organisations strategic goals, values, and how employees fit FEEL Emotional / affective attachment to the organisation ACT Motivation and willingness to invest discretionary effort to go above and beyond
Think
Feel
Engagement
Act
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Bottom Line: Evidence that employee Engagement drives company performance

12-Month Study of 50 Global Companies
40 30
3-Year Study of 40 Global Companies

5 4 3 2 1 0 -1
27.8 19.2 13.7
3.74 2.06
P e rc e n t C h a n g e
20 10 0 -10 -20 -30 -40
-3.8 -11.2
-2 -3 -4
-2.01
-1.38
-32.7
12-Month Change in Operating Income 12-Month Net Income Growth Rate 12-Month EPS Growth Rate
-5
Operating Margin
Net Profit Margin
High Engagement Companies

towerswatson.com
Low Engagement Companies
Cultural Context: National culture has a huge effect on employee perceptions

% PERCENT FAVOURABLE RESPONSE
Switzerland Thailand Norway Philippines Brazil Indonesia Austria Netherlands Canada New Zealand Vietnam Germany Spain United States Australia South Africa Ireland Malaysia Italy Sweden India France Greece Poland United Kingdom Singapore Korea PRC Taiwan Hong Kong Japan towerswatson.com
78
77 75 74 73 73 71 71 69 69 68 65 65 65 63 62 61 61 60 60 59 57 57 55 55 54 54 48 48
Actual Actual Data Data
"Taking everything into account, how satisfied are you with your company as a place to work?"
44 43 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
About the Vietnam National Norm

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Global Norm Strength: Towers Watson maintains one of the worlds largest employee opinion databases, populated with data updated on a regular basis from surveys of nearly 4 million employees working for a cross-geography, cross-industry group of companies Vietnam Norms: The norm is developed from surveys of employees working in client organisations in Vietnam, and the current version of the norm includes 28 companies* and data from 3,722 employees Content: This presentation summarises major changes in the norm over the past 5 years (2006 2010), and describes the major topic areas driving employee engagement and retention The Asia Pacific Norm: Newly created in 2010, so no trends are available for this benchmark
* Includes companies such as Alticor, AREVA, AstraZeneca, Baxter Healthcare, British American Tobacco, Citibank, Groupe Danone, KPMG, Lloyds, Maybank Group, Merck, Moet Hennessy, Novartis, Schindler, Tetra Pak, Thomson Reuters, & TNT
towerswatson.com
Employee Engagement in Vietnam: Holding steady over past few years, and currently ahead of the Asia Pacific Region
Employee Engagement
90%
% Favorable Opinion
80%
78%
77%
77%
78%
74%
70%
60%
2007 Vietnam
2008
2009 Asia Pacific
2010
towerswatson.com
Employee Intent to Stay in Vietnam: Holding steady over past 4 years, but currently lagging behind Asia Pacific Region
At the present time, are you seriously considering leaving this company?
70%
61%
% Favorable Opinion 60% 54% 55% 53% 54%
54%
50%
40%
2006
2007 Vietnam
2008
2009 Asia Pacific
2010
towerswatson.com
Vietnam Employee Opinion Trend Highlights & Comparison to Asia Pacific Region
Largest Regional Gaps: Employee Opinion Items with the largest positive differences against Asia Pacific Region
Top 10 Differences From Benchmark
Strategy & Direction Image Performance Evaluation Supervision Empowerment
Total Favorable
Tot Fav Diff
I believe top has a well business I believe top management management has: A well formulated 40a. strategy for the present strategy for the present formulated business
This company is highly regarded by: The general 23a. company This is highly regarded by public the general Public
86 89
Total Good
17 * 17 *
Tot Fav Diff
How do you rate your last performance How do you rate your last performance review on the following: 51a. review on you the following helping you identify Helping identify your strengths and weaknesses your strengths and weaknesses My supervisor involves inproblems solving My supervisor involves me in:me Solving related to our 61b. work problems related to our work
This company has established a climate where: Innovative ideas This 46b. company has established a climate can fail without penalty to the originating person or group where innovative ideas can fail without penalty to the originating person or group
69
17 *
Tot Fav Diff
Total Favorable
93 68
16 * 16 *
Progressive Employee Practices Could be Driving Up Perceptions of Company Image

towerswatson.com
* indicates a statistically significant difference
Largest Regional Gaps: Employee Opinion Items with the largest gaps (negative differences) against Asia Pacific Region
Bottom 10 Differences From Benchmark
Total Favorable
Tot Fav Diff
Stress, Balance, & Workload Intent to Quit
53. I am often bothered by excessive pressure on my job. (N)
I am often bothered by excessive pressure on my job
24 33
No
-15 * -7 *
Tot Fav Diff
I think my workload is excessive. (N) 54. I think my workload is excessive
105.
At the present time, are you seriously At the present time, are you seriously considering leaving this company? considering leaving this company?
54
Total Good
-7 *
Tot Fav Diff
38a.
Pay & Rewards
Regarding pay, how good a job do you Regarding pay, how good a job do you feel the company is doing in the following areas: Matching pay to performance feel the company is doing in the following areas: Matching pay to performance
28
-3 *
Tot Fav Diff
Total Favorable
Compared with other people Compared with other people working here,working I think I am paid fairly. 36. here, I think I am paid fairly
46
-2
High Stress + Lower Perception of Rewards => Strain on the Employee Value Proposition
towerswatson.com
(N) indicates 'Disagreeing' is the Favorable Response
* indicates a statistically significant difference
Declining Pay Perceptions: Employee opinion on Pay & Rewards in Vietnam on slight decline over past 5 years, but still comparable to Asia Pacific Region in 2010
Pay & Rewards
60%
% Favorable Opinion
50%
46%
40%
40% 40% 39% 38%
38%
30%
2006
2007 Vietnam
2008
2009 Asia Pacific
2010
towerswatson.com
Steady Stress Levels: Employee opinion on Stress, Balance, & Workload in Vietnam stable over past few years, and comparable to Asia Pacific Region in 2010
Stress, Balance, & Workload
60%
% Favorable Opinion
50% 44%
40% 40%
41%
41%
42%
30%
2007 Vietnam
2008
2009 Asia Pacific
2010
towerswatson.com
Employee Opinion on Benefits: On a slight decline since 2008, but still comparable to Asia Pacific Region in 2010
Benefits
70% 65% 62% 60% % Favorable Opinion 60% 59%
59%
57%
50%
40%
2006
2007 Vietnam
2008
2009 Asia Pacific
2010
towerswatson.com
Employee Opinions of Competitiveness in Vietnam: On the decline since 2008, but ahead of Asia Pacific Region in 2010
Competitiveness
70%
60% % Favorable Opinion 60%
61%
62%
56%
53%
50%
49%
40%
2006
2007 Vietnam
2008
2009 Asia Pacific
2010
towerswatson.com
Summary & Conclusions
towerswatson.com
Stress Time away from family Lack of authority Lack of freedom Security Money Benefits Accomplishment Self worth
towerswatson.com
Conclusions
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Perceptions of Pay & Reward: Are becoming more negative, but internal pay practices are having a bigger effect than whats going on in the external environment. Stress and Workload: Perceptions are becoming more negative over time, but most of this is not due to staffing issues. Benefits: There is a slight decrease in perceptions that benefits fit peoples needs, but a slight increase in perceptions that company benefits are as good compared to the local labour market Competitiveness: People feel as if their companies are doing a better job of developing new products and services, but there is increased negativity regarding the quality of these products and services.
towerswatson.com
Recommendations
Pay Attention to the Overall Employee Value Proposition:
z
Balancing Effort & Reward: As stress levels are increasing, people need to feel that what they get in return is commensurate Differentiating Performance: Ensure that internal pay practices are fair and effectively differentiate high performers from lower performers Focus on Talent: Ensure that there is a strong link between pay and superior performance Rewards Benchmarking: Ensure that pay and benefits have been benchmarked against local market practices Consider Quality Before Products are Launched: Build quality considerations into initial development process for new products and services Get Employee Input Regarding Quality: Ensure that employees have proper input on quality issues before new products go to market Rewarding Quality: Reward employees for improvements on product and service quality
Competitiveness:
z
towerswatson.com
Introducing: The Vietnam Engagement Indicator Survey
Towers Watson Surveys Background

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Who we are: We are a world leading employee survey business Who we work with: We work with some of the worlds largest and most successful organisations What we do: We advise our clients on how to become high performance organisations How we do it: We help them ensure their people cultures support their business strategies Who we work with: In 2009 we surveyed 4.1 million employees for 375 different organizations in over 35 languages, 140,000 manager reports and 957,000 verbatim comments Our advantage:
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Cutting-edge analyses and technology pinpoint the actions that drive the most change We maintain the largest database of employee opinions available, and provide our clients access to national, industry, functional and performance norms
towerswatson.com
Survey Design & Administration

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Population: Up to 1000 employees from your company Questionnaire: 54 opinion questions that measure over 16 key workplace topics (15 minutes to complete) Languages: Questionnaire in English and Vietnamese Coding: 4 coding questions (e.g.. Job level, age, tenure, department/function) Key Driver Analysis: 1 Key Driver Analysis to determine priority areas having the greatest impact on Employee Engagement Benchmarks: Comparison with 2 benchmarks (1 industry and 1 national), for setting clear priorities within the proper context Administration: Towers Watsons server to support the on-line administration of survey and reminders Normal Cost: US$4700 Limited-time Discounted Cost: US$3000
z z z
z z
towerswatson.com
The Engagement Indicator Survey Content

z z
Contains 54 questions over 16 categories Key workplace factors measured are:

z z z z z z z z
Leadership Strategy & Direction Supervision Communication Organisational Change Working Relationships Empowerment Training
z z z z z z z z
Work Tools and Conditions Stress Balance & Workload Training Engagement Pay & Reward Quality Customer Focus Organisational Culture
towerswatson.com
Benchmarking Clarifies Data Interpretation

Should Management be concerned with Pay or Working Relationships?
Total % Favourable
PAY (Demo data) Pay as good as or better than the pay in other organisations.
35
0 20 40 60 80 100
45
Total % Favourable
WORKING RELATIONSHIPS Good cooperation between departments.

55
70
0 20 40 60 80 100
towerswatson.com
Unparalleled global database of benchmark norms

Over 250 National, Sector, Function and Performance Norms
Country/Region
Argentina Austria Australia Belgium Brazil Bulgaria Canada Croatia Czech Republic Denmark Finland France Germany Greece Hong Kong Hungary India Indonesia Ireland Italy Japan Kazakhstan Korea Latvia
towerswatson.com
Lithuania Malaysia Mexico Netherlands New Zealand Norway Philippines Poland Portugal P.R. China Romania Russia Singapore Slovakia South Africa Spain Sweden Switzerland Taiwan Thailand Turkey Ukraine United Kingdom United States Vietnam
Performance Norms Transitioning Companies High Performing Companies

Senior Management Management
Job Level Norms Senior Management Management Hourly Union and Non-Union
Job Function Norms Research and Personal Demographics Development Race/Ethnicity Call Centers Gender Manufacturing Functions Age Human Resources Information Technology All norms are updated annually Finance Sales Marketing 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
Industry Norms Energy Airlines Manufacturing Telecommunications Government High Technology Pharmaceutical Professional Services Financial Services Consumer Goods Construction & Engineering Oil & Chemicals
Results Generated
Report: Active XL Interactive tool to drill down specific issues within demographic groups and to easily export to PowerPoint Advanced Analysis: Key drivers analysis determines the areas most likely to impact your employees engagement within the context of your company, strategy, and current initiatives Expert Recommendations: Tailor-designed PowerPoint presentation pack of your organisations results with specific consultant recommendations Results Presentation: A face-to-face presentation and facilitated discussion with your leadership group
towerswatson.com
Towers Watson Expertise

z
Full Project Management Support: Assistance and coordination during survey design, coding, administration, results and follow up
Flexibility: Ability to amend aspects of package to suit your organisation
Expert Advice: Masters/PhD qualified Consultants to facilitate process and workable solutions
towerswatson.com
Timeframe for Engagement Indicator Survey 2011

z z z
This is a time-limited opportunity Survey launched on March 28th Results ready within one month of survey close
March 28-April 22 Survey Launch and Administered
May Results generated
May-June Results presentation delivered
towerswatson.com
Act Phase: Turning results-into-action
towerswatson.com
Implementing Real Change: Towers Watson a range of consulting solutions to help address your engagement gaps and create positive change
Example Survey Insights
z
Towers Watson Solutions

z z z z
Senior management not sincerely interested in employee well-being
Leadership development Communication strategy Deal alignment Employee Advisory Team to leadership Learning and development strategy Competency development Career maps / Communication on career framework Performance management Role/job design Manager capability Governance Organisational culture Role/job design Communication strategy Alignment of pay systems & PM systems Manager capability
Havent improved my skills and capabilities over the last year
z z z
No input into decision making in my department
z z z z
Organisation doesnt quickly resolve customer concerns
z z z z
Insufficient career advancement opportunities
towerswatson.com
Talent management z Career ladders z Competency development 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. z Workforce planning
z
Contact Information
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Jessica Lu Managing Consultant Suite 808, 8th Floor, Sun Wah Tower, 115 Nguyen Hue Blvd., District 1 Ho Chi Minh City, Vietnam +84 8 3821 9488 ext. 368 jessica.lu@towerswatson.com
Kieu Thi Phuong Dung Consultant Suite 808, 8th Floor, Sun Wah Tower, 115 Nguyen Hue Blvd., District 1 Ho Chi Minh City, Vietnam +84 8 3821 9488 ext. 268 dung.kieu@towerswatson.com
towerswatson.com
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Employee Engagement & Retention in Vietnam Summary

2010 Towers Watson. All rights reserved.

Food for Thought

Employee Turnover? Employee Engagement?

What factors do you think would drive turnover intentions higher?

Innovation Market responsiveness

Possible causes for lower employee intent to stay

Vietnam Employee Engagement & Retention Levels

2010 Towers Watson. All rights reserved.

Engagement Model: Leveraging business outcomes through employee engagement

Bottom Line: Evidence that employee Engagement drives company performance

3-Year Study of 40 Global Companies

27.8 19.2 13.7

20 10 0 -10 -20 -30 -40

Net Profit Margin

High Engagement Companies

Low Engagement Companies

Cultural Context: National culture has a huge effect on employee perceptions

Actual Actual Data Data

About the Vietnam National Norm

2009 Asia Pacific

2009 Asia Pacific

2010 Towers Watson. All rights reserved.

Strategy & Direction Image Performance Evaluation Supervision Empowerment

Tot Fav Diff

Progressive Employee Practices Could be Driving Up Perceptions of Company Image

* indicates a statistically significant difference

Stress, Balance, & Workload Intent to Quit

53. I am often bothered by excessive pressure on my job. (N)

I am often bothered by excessive pressure on my job

I think my workload is excessive. (N) 54. I think my workload is excessive

Pay & Rewards

* indicates a statistically significant difference

2009 Asia Pacific

2009 Asia Pacific

2009 Asia Pacific

60% % Favorable Opinion 60%

2009 Asia Pacific

Summary & Conclusions

2010 Towers Watson. All rights reserved.

Introducing: The Vietnam Engagement Indicator Survey

2010 Towers Watson. All rights reserved.

Towers Watson Surveys Background

Survey Design & Administration

The Engagement Indicator Survey Content

Contains 54 questions over 16 categories Key workplace factors measured are:

Benchmarking Clarifies Data Interpretation

WORKING RELATIONSHIPS Good cooperation between departments.

Unparalleled global database of benchmark norms

Performance Norms Transitioning Companies High Performing Companies

Towers Watson Expertise

Flexibility: Ability to amend aspects of package to suit your organisation

Timeframe for Engagement Indicator Survey 2011

March 28-April 22 Survey Launch and Administered

May Results generated

May-June Results presentation delivered

Act Phase: Turning results-into-action

Towers Watson Solutions

Senior management not sincerely interested in employee well-being

Havent improved my skills and capabilities over the last year

No input into decision making in my department

Organisation doesnt quickly resolve customer concerns

Insufficient career advancement opportunities