Employer of Choice – Staff Perspectives Dr Rob Gill Public Relations and Communications, Faculty of Higher Education Swinburne University of Technology Melba Avenue, Lilydale, Victoria 3140, Australia Telephone +61 3 9215 7325 Email: rgill@swin.edu.au Abstract “Employer of Choice” (EOC) is an evolving principle for Australian business. EOC reflects the value and importance organisations place on their key stakeholders - their staff. This paper aims to define employer of choice for Australian business conditions, demonstrate the link between EOC and “Corporate Social Responsibility” (CSR), expand on the valuable contribution staff add to organisational “Reputation and Risk Management”, and illustrate how “Information and Communication Technology” (ICT) can provide the ideal platform for educating a large office-based staff about their organisation’s EOC program. Increasing numbers of Australian organisations are paying greater attention to motivating and effectively utilising the skills of their employees. The current climate of buoyant employment in Australia enables employees and job-seekers to look beyond monetary incentive in employment to include aligning work culture with their individual beliefs on corporate, environment and social responsibility. Many organisations are working hard to acquire EOC status, as EOC programs are one way of addressing employee requirements. This paper suggests “Computer Assisted Learning” (CAL), which embraces the constructivists’ principles of adult learning, enables individually-tailored education for large office-based staff on their organisation’s EOC programs, enhancing opportunities to reflect an organisation’s brand and desirable culture. 1 Introduction This paper aims to define Employer of Choice (EOC) for Australian business conditions, demonstrate the link between EOC and Corporate Social Responsibility (CSR), expand on the valuable contribution staff add to organisational Reputation and Risk Management, and illustrate how Information and Communication Technology (ICT) can provide the ideal platform for educating a large office-based staff about their organisation’s EOC program. Central to this paper is the belief that CSR is not only an ethical obligation for organisations, but fundamental for business sustainability, and directly relates to employee engagement and opportunities, which are critical to the reputation and success of an organisation. The paper examines how employee education, in keeping with Contructivism theory, on their organisation’s EOC program can positively contribute to this success. Herman & Gioia (2004) have observed that Employer of Choice (EOC) has gained popularity since the year 2000, representing a whole new design of corporate culture and human capital management. Their observation is supported by research which demonstrates that gaining EOC status is an emerging and critical part of successful businesses in terms of external reputation and employee satisfaction (see, for example, EPA Victoria, 2005; Kahler, 2005; Fracaro, 2005; Hewitt, 2003; Human Resources, 2005; IBM, 2005; PriceWaterhouseCoopers, 2002). In Australia, workers are demanding enhanced employee opportunities, Corporate Social Responsibility (CSR) and environmental awareness from their employers (IBM, 2005; PriceWaterhouseCoopers, 2002; Suggett and Goodsir, 2002). Such demands are influenced by a range of factors, for example: (a) global business trends regarding accountable and transparent behaviour towards employees, (b) Australian government legislation and regulation, and (c) a workforce with the capacity to exercise greater choice in employment. Increasingly, organisations have to find meaningful ways of responding to such employee demands along with remaining “ahead of the pack” in terms of human capital management as a means of becoming and retaining EOC status. Education about an organisation’s EOC program is seen as vital for retaining staff, attracting quality job applicants and enhancing a business’s reputation (Hewitt, 2003). Information and Communication Technology (ICT) is the most accessible and available vehicle for communicating with external and internal stakeholders of large organisations (Harrison, 2007; Euneson, 2005), and can be effectively used as a means of educating staff about their organisation’s employee benefits and ‘good’ employer practices (Reiser, 2001a; Reynoldson & Vibert, 2006). However, for ICT to be helpful in this education process, consideration must be given to pedagogical design in keeping with Constructivism (learning through activity that builds on prior knowledge) and adult learning principles, as well as the objectives of the EOC program. This paper focuses on teasing out the parameters of EOC within the Australian context and outlining how ICT can be used to educate staff about their organisation’s EOC program. Defining EOC In Australia, the term “Employer of Choice” has typically been associated with recruitment and strategies to attract and retain staff (Herman & Gioia, 2004; Leary-Joyce, 2004; Drucker, 1999). More recently, EOC has been viewed as best practice for employment conditions, including: employee opportunities, sustainable culture, public reputation and desirable 2 qualities like facilities and support networks that make organisations attractive employers (PriceWaterhouseCoopers, 2002; Hewitt 2003; Hull & Read, 2003). In order to obtain a holistic definition of employer of choice for the uniformity of Australian business, this paper investigated contemporary research, studies, and surveys and awards related to the employer of choice theme, and government legislation and regulation related to employee management (see appendix one). Primary issues common to global surveys and international studies (listed in appendix one) relating to good human capital practices and corporate responsibility include: effective people policies for leadership and management, external relationships, occupational health and safety, learning opportunities, community involvement and environmental conscience. Forums for public communication relating to employer of choice already established are performance awards, ratings and citations. The criteria for these awards were investigated to establish common criteria used to assess successful employer of choice programs (see appendix two). In light of global and national surveys, recent research and industry awards, employer of choice strategies need to focus on the following criteria: leadership and inter-relationships, safety, wellbeing, staff development, opportunity, inclusion, community involvement, and sustainable practice. Compliance for government and industry regulation regarding employee conditions is building, with the Australian government reviewing and implementing legislation regarding employer obligations to employees and corporate responsibility. This is supported by a number of associated industry requirements (see appendix three). This (appendix three) legislation and regulation reaffirms Australian employer responsibilities to employee safety, equal opportunities, freedom from discrimination, environmental responsibility, social responsibility and good governance. Superannuation One particular issue for Australian workers not given due consideration in the researched studies and awards regarding EOC criteria is concern for financial planning and wealth protection regarding Australia’s unique superannuation and retirement planning structures legislated by the Federal Government. The Superannuation Guarantee Act 1992 and the introduction of “Choice of Super” legislation which commenced on 1 July 2005 ensure that retirement saving through superannuation currently applies to more than 90 per cent of the Australian workforce (Rainmaker Information, 2003/4, p. 7). Making an informed choice on superannuation to ensure financial security and wealth protection requires a degree of fiscal sophistication. Employers have a legislated responsibility to equip employees with accurate knowledge so they may make informed decisions regarding their retirement savings and financial protection (Bailey, 2005, p. 14; Simioni, 2005: 5; Wilkinson, 2005, p. 20-22). Superannuation, due to compulsory employer contributions, is directly associated with employee opportunities. EOC criteria for Australian Business The central pivot on which good workplaces are founded are quality working relationships underpinned by workplace leadership and clear values, along with having a voice and being 3 safe (Hull & Read, 2003, p. 3). Common themes to emerge from the above research emphasised good human capital management for Australian organisations to be based on: strong leadership and governance, opportunity for future development, financial and job security, sustainable business practices, work-life balance, safety and acceptance of diversity. “Today’s employees want their companies to possess a strong sense of social responsibility. They insist upon ethical business practices, financial stability, community leadership, fair treatment and a healthy working environment,” (Herman & Gioia, 2000). The Link between CSR and EOC Employer of choice and corporate social responsibility are intertwined. EOC can be viewed from two perspectives: the employer’s perspective, i.e. CSR strategies safeguarding effective operations for a business, and the employee’s perspective, i.e. CSR strategies securing an employee’s commitment to the business. EOC encompasses the internal policies and practices that ensure the organisation’s culture is corporately responsible for its operations and the resulting effects on all stakeholders, including customers, shareholders, government and the organisation’s primary asset - employees (Abbott, 2003; Fels, 2003). As many academics and industry experts have researched CSR for Australian conditions this paper doesn’t seek to define CSR. However, CSR has recently been identified as modern business meeting obligations from increasingly demanding ethical, environmental, legal, commercial and public standards, as defined by wider society (Crane et al. 2007). The fundamental idea behind CSR is that business has an obligation to work for social betterment (Haugland Smith & Nystad, 2006, p. 4). A commonly accepted understanding of CSR practice can be drawn from the five pillars of CSR strategy, which include: business ethics, employee relations, human rights, community investment and environmental sustainability (ExperienceCSR, 2003). How these five pillars are applied internally make up the foundation of a solid corporately responsible organisation. The internal management of these strategies is an organisation’s employer of choice program. Business ethics theorist Peter French (1984) argued that recognising the business as a moral agent is the concept of internal decision making being drawn from identifiable and collective identities associated with the organisation, as opposed to individual ethics governing decision making. In a sense, an organisation’s decision making is made on the grounds of remaining commercially sustainable and remaining ethically engaged with the community. Haugland Smith and Nystad (2006) explain CSR in terms of the ethical perspective – companies accept social and environmental responsibility as an ethical obligation to create a good society, and in terms of an instrumental perspective – focusing on achieving economic objectives through social activities. The intrinsic value of the ethical motive and the economic value of the instrumental motive are mutually linked and beneficial to the organisation. Globalisation, corporate governance, accountability and citizenship are becoming part of mainstream policy and management as companies search for ways to understand the boundaries of their non-market accountabilities and responsibilities, and to engage with those stakeholders that matter to their business (Suggett & Goodsir, 2002, p. 8). Many Australian companies produce CSR/sustainability reports, post internet statements and/or circulate press releases to indicate their practices, policies and procedures relating to social responsibility, sustainability and employer of choice practices (Suggett & Goodsir, 2002). The Australian Government has taken a number of important steps to encourage the production of sustainability reports, through releasing publications, developing external programs with 4 industry organisations, and by holding roundtable discussions (Department of Environment and Heritage, 2004, p. 1). The focus on transparency and accountability through external reporting has encouraged organisations to review their internal management policies and practices. It has also forced companies to develop human capital strategies, applied through employer of choice programs, in order to support their corporate responsibility agenda (Bramner and Pavelin, 2004, p. 704). Business Reputation An organisation’s reputation is an important asset that needs to be protected. Reputation is based on ethical, financial and environmental perception of performance in relation to external goals (Birch, 2003, p.11). Fombrun and Shanley’s seminal model (1990, p. 235) hypothesises that corporate reputations represent the public cumulative judgements of organisations over time, which in turn effect the organisation’s relative success in fulfilling expectations of multiple stakeholders. Business reputation extends beyond financial performance for shareholders (Fombrun, 2005) and incorporates all stakeholders, including employees, government, community and consumers/clients (Suggett & Goodsir, 2002; GRI, 2002). Australian companies recognise the importance of business reputation and how it can be protected by providing a solid foundation in EOC policy and practice when addressing human capital issues. Internal employer of choice programs can deliver intangible benefits of brand enhancement and better staff morale, fortifying corporate responsibility and strengthening business reputation externally (Bright, 2005). A strong reputation as an EOC business can have a profoundly positive effect on stakeholder opinion (GRI, 2002, p. 2). The past few years have seen more global campaigns for open and accountable behaviour from organisations, resulting in increased government regulations. At the same time, Australia is experiencing falling unemployment rates and employee burnout. All these are driving the need for improved education and communication with regard to employer of choice strategies, policies and practices (Hewitt, 2003; Hull & Reid, 2003; Human Resources, 2005; Work Safe Victoria, 2004). Risk Management Two key risk considerations for the current Australian workforce are low unemployment rates and employee burnout. Pfeffer (1998) in his book ‘The Human Equation: Building Profits by Putting People First’ concluded that a global study of human resources practices directly equated to higher revenue and growth with better employee policies. “Attracting, motivating and retaining knowledge workers have become important in a knowledge-based and tight labour market, where changing knowledge management practices and global convergence of technology has redefined the nature of work,” (Horwitz et al. 2003, p. 23). An informed and secure human capital source is a significant element in organisational success. The Australian unemployment rate in February 2008 of 4.3 per cent was at a thirty-year low (ABS, 2008), resulting in a ‘job-seekers’ market. Such a job-seekers market allows the Australian workforce to exercise a greater choice and to consider a broader range of issues when contemplating employment (Fracaro, 2005). Annual staff turnover in Australia has leapt from between 11 to 13 per cent in 2005, to more than 18 per cent in March 2008 (Schneiders, 2008). However, the retention and attraction of effective staff can be more successfully managed through providing a working environment conducive to employee needs and 5 preferences (Clarke, 2001). Such a working environment requires staff to be knowledgeable of their employment EOC policy and practices. Another trend that requires proactive attention is employee burnout, which is eroding the bottom-line of Australian businesses and is generating serious implications for organisations (Human Resources, 2005). A recent Hudson survey of more than 7,800 employers found 32 per cent of managers are witnessing burnout among their employees and a 29 per cent increase in the number of sick days being taken. Burnout has also resulted in an increasing number of employees leaving organisations (Human Resources, 2005, p. 21). Ashridge Centre for Business and Society director, Andrew Wilson, states employee options that include a broad range of work-life initiatives, such as flexible working options, remoteworking opportunities, tele-commuting, time-off policies and wellbeing programs, provide the tools for coping with any extra work demands that may impact on employees’ lifestyles. Future relevant issues might include religion in the workplace, employee privacy, HIV/AIDS, sexuality and benefits for domestic partners. In the ‘war for talent’ it is often argued that such options can be crucial in attracting and retaining the best talent as companies strive to be seen as desirable places to work (2004, pp. 16-17). Making staff your reputation champions Organisations that promote significant employee opportunity not only reduce staff turnover, but enhance staff loyalty (Herman and Gioia, 2000). “Organisational wealth is increasingly attributable to ‘soft forms’ of capital - reputation, trust, goodwill, image and relationships,” (Post, 2004, p. 13). These “intangible” assets, which originate from the organisation's internal policies and practices, undeniably deliver value to the company according to 96 per cent of executives polled in an Accenture Survey (Post, 2004, p. 14). Such intangible considerations, relating to CSR from an instrumental perspectives, make it all the more imperative that organisations put a lot of thought and effort into designing their EOC programs and educating their employees about them. Staff who are comfortable with their organisation’s values and work practices from an ethical perspective are important assets in enhancing their employee’s reputation. According to Harris and de Chernatony (2001, p. 441) employees constitute the interface between a brand’s internal and external environments and can have a powerful impact on consumers’ perceptions regarding the brand and the organisation. In a sense, employees are recognised as brand ambassadors through their emotional interactions with other stakeholders: as a source of information, a service, at the point of sale and as a provider (Harris & de Chernatony, 2001, p. 441). A critical element to a reputation platform is the mode of behaviour for the organisation. This is reflected in how the organisation creates value for, deals fairly with, and fulfils its obligations to its various stakeholders, i.e. embedding a socially and financially responsible culture (Dowling, 2006, p. 89). Dowling (2006) refers to communicating corporate reputation through a narrative that explains the behaviour of an organisation through its mission and morality; the way it creates an emotional bond with and fosters trusts and support with key stakeholders. These “stories” are told everyday through the way employees internally and externally interact with stakeholders. It is the responsibility of the organisation to align employees’ values and behaviour alongside the desired brand values (Harris & de Chernatony, 2001, p. 442). Achieving the desired brand values is instrumental in the 6 organisation’s performance, but is dependent upon employees ‘living’ these values through their work behaviour. Australian companies which embrace “good” EOC policies and practices and corporate responsibility are laying the foundations for ongoing positive reputation transmitted through their key stakeholders, especially from within. Companies with a strong and developing employer of choice program are well placed to reap the immense advantage associated with making their employees their reputation champions (Campbell, 2004). Employee Education on EOC According to Drucker (1989) the knowledge worker is a powerful resource in terms of increasing the intellectual capital of an organisation and improving the productivity and viability of the operation. Staff education is fundamental in terms of safety, productivity, lifelong learning, communication, and effective people policies (Work Safe Victoria, 2004; Harrison, 2007). These issues play an important role in the operations of a company and are core to an EOC program. Many issues associated with office education, including: large numbers, motivation, time, access, capabilities and relevance to a broad audience, can be addressed through online education or computer-assisted learning (CAL). An online resource used to facilitate the development of an EOC education program utilising contemporary information and communication technology has the ability to be a cost-effective educational tool that can operate successfully under office conditions in large organisations. The online resource will not only provide EOC information for users, but also have the capacity to pinpoint areas requiring further development (Ross, 2000). This can lead to a more complete and progressive EOC education program. A CAL tool is time-flexible and cost-effective for the office as it can easily be uploaded to the in-house drives and is available at convenient times for staff with access to computers. The majority of office staff have access to, and are capable in, the basic principles associated with computer operations (Barker, 2003). ‘Those who undertake formal learning are also those individuals likely to use ICT,’ according to Gorrad et al. (2005, p. 84). Most office workers are trained, capable and comfortable working with computers. Justin O'Brien, Director of High Performance People Group captures its essence when he notes that “The benefits of online learning systems compared to face-to-face training for large staff numbers are many. Such systems are cost-effective, transportable, adaptable, and can be programmed to reflect the culture of the company” (2008). Reynoldson and Vibert have identified seven distinctive capabilities of ICT-enabled education, which complement an office environment. These are: flexibility, customisation, practicable lifelong learning, borderless education, visualisation and simulation, business-inthe-classroom, and theory-practice nexus (2006, p. 7). These capabilities complement the demographic characteristics of Australian office workers including: information technology capabilities (Reeves & Reeves, 1997), variety in learning styles (Fuller and Unwin, 205, p. 21), a need for lifelong learning and transferable knowledge (Arnold, 2008) and practical application (Reiser 2001a). The content should typically contain information on the criteria for being an employer of choice for the host business. This classification should address people management issues regarding effective people-policies relating to: internal and external relationships, 7 occupational health and safety, learning, community involvement, environmental conscience, and financial security (Herman & Gioia, 2000; Hull & Read, 2003; Looi et al., 2004). It links with the policy and procedures for that organisation, and should permit access to external websites for expanded information, allowing for individual interpretation and aiding life-long learning (Arnold, 2008). It is important that the education tool can create authentic activities in keeping with the values and ethics associated with the employer of choice principles of particular companies. This is consistent with Constructivism theorists (Vygotsky, 1962; Dalgarno 2001; Reiser, 2001b) who believe learner-centred education is the most effective way to learn. Constructivists base learning on building upon prior knowledge, presenting information within a context in order to relate to prior experience and learner activity rather than teacher instruction (Dalgarno, 2001, p. 184). Reiser (2001b), citing Dick, points out that authentic learning tasks that echo the complexity of the real world environment in which learners will utilise their skills need to be reflected in instructional design and adaptation of online learning management systems. Conclusion This paper’s main aims have been to determine what constitutes EOC within the Australian context, why EOC is important to Australian organisations and to show that ICT through CAL can be a valuable tool for educating a large organisation’s employees about their EOC program. Employer of choice reflects the value and importance an organisation places on its key stakeholder - its staff. It is clear that organisations that invest in their people are perceived to be better places to work and are more likely to retain key staff and outperform other organisations on financial measures (Hewitt, 2003). EOC reflects the CSR principles of the organisation from an employee’s perspective, in terms of its ethical commitment to staff. This commitment has the mutual benefit of encouraging staff loyalty and commitment, which, in turn, is reflected through staff engagement with stakeholders. Such commitment has instrumental value to the organisation through improved motivation and reputation. There is a business need in Australia for an effective program that educates staff, management and business-policy designers about employee opportunities and makes the most out of an organisation’s culture. The first step to developing and articulating an EOC brand is internally, through an organisation’s greatest ambassadors - their staff (Australian Institute of Management, 2004). Using the information technology already available in an office environment, computerassisted learning represents an ideal tool for facilitating staff education concerning an organisation’s employer of choice program, in keeping with Constructivism principles regarding lifelong learning. 8 References: Abbott, B. (2003). SRI Investments Sustain Strong Growth, Money Management, 17 (20), 18-20. Arnold, J. (2008). Lifelong Learning. Unpublished Paper. Swinburne University of Technology. Ashridge Research. 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Melbourne: Victorian Work Cover Authority. 11 Appendix One – EOC associated studies Title PriceWaterhouseCoopers Global Human Capital Survey Good Employee Practices Are Good For Your Business - Report by Department of Labour, NZ Title The State of Corporate Citizenship in the United States - Centre for Corporate Citizenship Strategic Plan for Addressing the Communication for Employer of Choice - University of Idaho Management Challenges in the 21st Century – Ashridge Centre, UK Year 2002/03 Research Global survey 2003 Questionnaire survey Year 2003 Research Survey 2000 Literature research 2004 Questionnaire The New Business Responsibilities – Ashridge Centre, UK 2001 Questionnaire The IBM Global Human Capital Study 2005 Survey and interviews KPMG International Survey of Corporate Responsibility Reporting Simply the best - workplaces in Australia - University of Sydney 2005 Standard questionnaire Field study and open-ended question checklist 2003 Key Objective Effective people management policies More competitive business through staff retention Key Objective Examination of attitudes, expectations, and commitment towards corporate citizenship Criteria for “employer of choice” education Management and organisational challenges, personal challenges for management, and learning development trends Personnel policies and practices, pay and benefits, recruitment, staff satisfaction and training Human capital practices for successful organisations Analysis of social issues in the workplace Fifteen key drivers were present in each of the leading workplaces 12 Appendix Two – EOC associated Awards and Ratings Agency “Great Place To Work” Institute Award 100 best companies Country US, UK and Europe Hewitt and Associates Best Employers Australian Government’s Equal Opportunities for Women in the Workplace Agency “Employer of Choice for Women” (EOCFW) citation Australia & New Zealand, Asia, Canada, Europe, India and Latin America Australia HR Awards – Human Resources Magazine Employer of Choice Award Australia Key Criteria Relationship between employees and management, employees and their jobs/company, and employees and other employees Company and strategy, solid senior leadership, compelling promise to employees, alignment of people practices to support high performance culture, and measurement and employee engagement Policies for support of women in the organisation, and have rights and obligations in place regarding sex-based harassment, diversity, transparency, inclusive organisational culture, and people development Employee-centric culture, career opportunities, marketplace success, the link between HR and business strategy, personal development opportunities, performance management and measurement processes, and recognition of people as a competitive advantage 13 Appendix Three - Government and industry regulations and initiatives regarding employee management Title Corporations Act Amendment Bill 2004 for the Corporations Act of 2001 (Treasury, 2005) Commonwealth of Australia Joint Parliamentary Inquiry into Corporate Social Responsibility 2005 (Corporate Public Affairs, 2005) Australian Stock Exchange (ASX) Corporate Governance Council Type of regulation Government Act CLERP 9, the Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (ASIC, 2005) Australian National Contact Points (ANCP) for the OECD “Guidelines for Multinational Enterprises” Financial Services Reform Act 2000 (ASIC, 2003) Government Act Occupational Health and Safety Act 1991 (OHSrep, 2005) Covers all Commonwealth Government departments and business enterprises OHS State Acts (e.g. Victorian OHS Act 1985) Australian Competition and Consumer Commission (ACCC) State Government Acts Industrial Relations Reform (Parliamentary Library, 2008) Government Inquiry Recommendations, must be addressed by ASX listed companies Government Obligation Government Act Independent Commonwealth statutory authority formed in 1995 to administer the Trade Practices Act 1974 The Australian Labor Government legislation Relates to: International law and the evolving legal environment for corporate social responsibility Proposed to encourage using the Principle 7 ASX Corporate Governance Council guideline as a vehicle for greater environmental and socially responsible behaviour Developed a set of 10 guidelines, Principles of Good Corporate Governance and Best Practice Recommendations Holds chief executive officers and board members more accountable for their business practices Australia’s obligation to ensure the effective implementation and promotion of the guidelines The inclusion of information relating to labour standards and environmental, social and ethical factors in the product disclosure statements (PDSs) of investment products (Policy Statement 168) An employer must take all reasonably practicable steps to protect the health and safety at work of employees Ensure the safety and health of all employees Includes reference relating to EOC including: consumers, suppliers, personal injury, severability, breaches of confidence and competition Introduce wide-ranging industrial relations reforms counteracting Australian Workplace Agreements 14