Executives Report Barriers to Improving Worker Experience

Executives Report Barriers to Improving Worker Experience

While executives say they understand the importance of worker experience and its impact on customer experience—and, thus, on customer loyalty and revenue—many business leaders struggle to fully implement programs that create meaningful links between worker experience and customer experience, according to a study conducted by Forrester Consulting on behalf of global services company Appiro.

The results of the study are based on interviews and an online survey carried out between February and April 2017 of 450 business leaders at the manager level and above in the United States, the United Kingdom, Germany, France, Japan, and Australia. The findings indicated that 90% of the business leaders surveyed believe engaged workers are able to provide superior customer service, and that 88% believe that worker experience directly affects their company’s bottom line, including revenue and the overall return on investment of business objectives.

However, 87% of the executives surveyed reported that they face hurdles when trying to improve worker experience in meaningful ways. Researchers also observed that many leaders lack focus in their approaches to improving worker experience: 70% of respondents identified more than eight solutions for improving worker experience, and 48% admitted that they address worker experience in an ad hoc way that results in less substantial implementation.

The findings further suggested that worker experience is not an implementation priority for most executives: only 26% of the business leaders surveyed said their company has a formal, dedicated worker experience program, and 20% admitted to doing nothing to address worker experience directly.

Researchers also pointed out that while there is a growing belief that worker experience affects customer experience and the bottom line, relatively few companies evaluate worker experience by assessing improvements in their customer experience rates. When the executives were asked what metrics they use to evaluate the success of worker experience efforts at their company, the top responses were worker productivity (56%), worker retention (46%), engagement with work (44%), and profitability (43%). By contrast, the respondents were less likely to say they use customer experience scores (42%) and customer retention (32%) to measure the success of worker experience initiatives.

The survey results also indicated that more than three-quarters (79%) of the respondents acknowledge that their business faces challenges in delivering a superior customer experience, several of which are related to worker experience. When asked to identify the sources of these problems, 29% said organization structures prevent the business from delivering the intended customer service, 28% admitted that workers aren’t empowered to fix the customer experience when they find problems, 26% said the business lacks the technology it needs to properly support customers, and 26% acknowledged that workers’ goals don’t reflect the business’ customer experience goals.

From Benefit Trends Newsletter, Volume 60, Issue 8

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2017 Liberty Publishing, Inc. All rights reserved.

Many Executives Are Flying Blind When Choosing Innovation Strategies

Many Executives Are Flying Blind When Choosing Innovation Strategies

While global executives value innovation, many lack confidence in their ability to innovate, and are facing challenges in aligning their innovation efforts with their business strategies, according to a report recently released by professional services firm PwC.

The report’s results and insights are based on a survey of over 1,200 executives and business leaders from 44 countries and all major sectors conducted between September 12, 2016 and January 27, 2017. More than half (54%) of respondents reported that they struggle to bridge the gap between their business and innovation strategies, and are thus flying blind as they place bets on innovation.

Most of the respondents also indicated that they have low levels of confidence in their company’s innovation prowess, with just over one-quarter saying they believe they lead their competitors in innovation. However, 20% of these innovation leaders, but only 13% of the remaining respondents, said they expect their company to grow by more than 15% in the next five years.

When asked about the metrics they use for measuring the success of their company’s innovation strategies, the top response was sales growth (69%), followed by customer satisfaction ratings (43%), number of new ideas in the pipeline (40%), market share (36%), number of new products in the pipeline (31%), the net value of the innovation portfolio (28%), and time to market (24%).

The survey findings suggested that companies are becoming more inclusive, and are increasingly adopting open innovation models that bring more voices to the table, including employees and customers. When asked to name the most important internal and external partners for innovation at their organization, 60% of respondents cited internal employees, 50% mentioned technology partners, and 35% cited customers via focus groups, data mining, and other forms of feedback. Moreover, when asked what operating models their organization currently uses to drive innovation, the respondents were most likely to cite an open innovation model (61%); followed by design thinking (59%) and co-creating with customers, partners, and suppliers (55%). By contrast, only around one-third (34%) of respondents cited traditional R&D.

In addition, the report looked at what types of companies are more focused on incremental change, and what sectors are more focused on breakthrough innovation, or making significant innovations that result in the development of major new technological or market applications. The survey results showed that the companies that are most likely to be focused on breakthrough innovation are in the technology sector (58%); followed by in the pharmaceutical and life sciences (51%), health services (47%), communications (45%), and automotive (43%) sectors.

From Benefit Trends Newsletter, Volume 60, Issue 6

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2017 Liberty Publishing, Inc. All rights reserved.

Effective Compliance Risk Management Starts at the Top

Effective Compliance Risk Management Starts at the Top

Companies seeking to embed compliance risk management into both their strategy and everyday operations should set the right tone at the top, assess their compliance and ethics risks in collaboration with other risk functions, and build governance and oversight structures that effectively monitor regulatory matters, an annual report on compliance prepared by professional services firm PricewaterhouseCoopers recommended.

Released on September 14, the findings of the report on the state of compliance are based on a survey of more than 800 global executives, most of whom are legal counsel or compliance officers. The survey showed that while 98% of the executives surveyed believe that their company’s senior leaders are committed to compliance and ethics, 55% reported that senior leaders provide only ad hoc program oversight or delegate most compliance and ethics oversight activities. In addition, just 48% of respondents reported that their organization assesses its “tone at the top,” or whether executives consistently communicate and model a commitment to compliance and ethics; and only 36% of respondents indicated that compliance officers are inherently integrated into or play a key role in strategic planning.

Moreover, while 77% of the executives surveyed reported that there is an enterprise risk management (ERM) process at their organizations, and 88% of these respondents said that the ERM process covers compliance and ethics-related risks; just 54% of these respondents indicated that the framework their company uses for compliance and ethics risk assessment aligns with the framework it uses for its ERM process, and another 54% reported that they needed to conduct at least some additional compliance and ethics-specific risk assessment activities in order to fully address their organizations’ compliance and ethics risks.

The report’s authors further noted that although compliance and ethics teams rely heavily on the top of the organization when conducting risk assessment activities, they may be neglecting to obtain valuable information from middle management and rank-and-file employees: while majorities of the executives surveyed indicated that their organization includes interviews with management (59%) and/or board/management input (55%) in their compliance and ethics risk assessment process, only 21% said their company includes employee surveys.

The survey also asked respondents about how their company’s reporting structure supports its compliance and ethics oversight responsibilities and accountabilities. While nearly two-thirds (65%) of respondents indicated that an audit committee oversees most compliance and ethics programs at the board level, just 20% said that their company’s board of directors had formed a separate, stand-alone compliance/ethics committee to provide oversight of the compliance and ethics program. However, 72% reported that their company has a dedicated business unit or business area compliance officers.

From Benefit Trends Newsletter, Volume 59, Issue 10

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2016 Liberty Publishing, Inc. All rights reserved.

Executive Roles with a Digital Focus Show Signs of Expanding

Executive Roles with a Digital Focus Show Signs of Expanding

Companies are responding to an increasingly digital market environment by adding executive roles with a digital focus or changing traditional roles to have a digital orientation, but are also finding that a digital company does not necessarily have to be led by technologists, the results of a global survey of managers and executives conducted by MIT Sloan Management Review and Deloitte indicated.

The survey, conducted in the fall of 2015, captured insights from more than 3,700 business executives, managers, and analysts from organizations of various sizes in 131 countries and 27 industries. The findings revealed that the list of “digital” business roles and functions is extensive and growing: for example, there are now digital strategists, chief digital officers, digital engagement managers, digital finance managers, digital marketing managers, and digital supply chain managers.

Researchers noted, however, that despite the proliferation of digital roles and responsibilities, most of the executives surveyed recognize that their company is not adequately preparing for the industry disruptions they expect to emerge from digital trends, and report feeling constrained in preparing for a digital future by a lack of resources, a lack of talent, and the pull of other priorities. Nearly 90% of the survey respondents said they anticipate that their industry will be disrupted by digital trends to a great or moderate extent, but only 44% said their organization is adequately preparing for the disruptions to come.

The survey also found, however, that a group of “digitally maturing” companies are transcending these constraints, achieving digital capabilities that cut across the enterprise. Based on how the respondents rated their company’s progress in adapting to digital technologies, their organization was classified as early, developing, or maturing. Close to 90% of the executives surveyed at digitally maturing organizations reported that they are integrating their digital strategy into the company’s overall strategy.

In addition, the survey showed that more than 75% of respondents at digitally maturing organizations provide their employees with resources and opportunities to develop their digital acumen, compared to only 14% of respondents at early-stage companies.

Yet researchers observed that some companies are experimenting with new approaches to performance management: for example, rewards can be allocated based on real performance data or survey data from all of an employee’s project leaders, or employees can determine rewards for one another in a crowdsourced approach.

From Benefit Trends Newsletter, Volume 59, Issue 9

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2016 Liberty Publishing, Inc. All rights reserved.

Tech Executives Express Optimism about Revenue and Employment Growth

Tech Executives Express Optimism about Revenue and Employment Growth

While technology executives report that they are ramping up deployment of automation and machine learning across several functions of their company, they also claim they are planning to hire more people over the next several years, according to the results of a survey of U.S. technology CEOs by accountancy firm KPMG.

Released on July 11, the findings of a survey of 138 U.S. technology industry chief executives from internet, hardware, software, cloud, and IT services companies showed that around three-quarters of the respondents believe that automation and machine learning are likely to replace at least 5% of their manufacturing, technology, sales, and marketing workforce over the next three years. At the same time, more than half (55%) of respondents said they expect their company’s headcount to grow at least 6%.

Almost 60% of the CEOs surveyed said they expect annual revenue growth for their organization over the next three years of between 2% and 5%, while 17% said they anticipate growth of between 5% and 10%. The findings also indicated that 97% of the CEOs surveyed are confident about U.S. revenue growth prospects over the next three years, and that nearly 90% are confident about global growth as well.

When asked about their strategic priorities in the coming 36 months, the top response of the CEOs surveyed was digitization of their business, followed by a stronger client focus, implementing disruptive technology, minimizing cyber security risk, and talent development.

The survey also found that almost half of the respondents describe their approach to innovation as accelerated. When asked how they plan to accelerate the execution of their strategies, 80% of the CEOs surveyed said they are using disruptive technologies to improve products and services, 60% said they are hiring new talent, and 49% said they are forming new partnerships and alliances. The findings further indicated that around 80% of the executives polled see growth through partnerships or collaboration with other companies as the way to drive shareholder value for the next three years.

In addition, the results revealed that the leading concerns of the tech CEOs surveyed are product relevancy three years from now, the impact of global economic forces on their business, and how millennials and their differing wants/needs will change their business. When asked about risk, the CEOs polled said they are most concerned about cyber security, regulatory risk, and reputational risk. However, 90% of the respondents agreed that the need for security is generating innovation in products and services.

From Benefit Trends Newsletter, Volume 59, Issue 8

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2016 Liberty Publishing, Inc. All rights reserved.

Financial Executives Report Slightly Lower Pay Increases In 2016

Financial Executives Report Slightly Lower Pay Increases In 2016

Pay raises for financial executives at both public and private companies in the U.S. are set to rise at a healthy rate of 4% in 2016, but are down slightly from the previous year, according to the results of a survey conducted by Grant Thornton LLP and the Financial Executives Research Foundation (FERF).Â

The survey of 363 active Financial Executive International (FEI) members from October 2015 through January 2016 found that the average salary increase for senior-level financial executives at both public and private companies is expected to decline slightly in 2016 compared to the previous year. For 2016, respondents at public companies reported an average salary increase of 3.7%, down from 3.9% a year ago; while respondents at private companies reported a 4.1% increase, compared to 4.4% in 2015.

Researchers noted that these numbers are consistent with broader market data, and are higher than the projected across-the-board average pay increases of 3.1%. However, of the financial executives surveyed, 26.5% said they received no salary increase for 2016, up slightly from 24.2% in 2015.

The findings for 2016 indicated that among public companies the average base salary of a chief financial officer is $303,975, and the average base salary of a corporate controller is $229,895; while among private companies the average base salary of a CFO is $217,509, and the average base salary of a corporate controller is $161,374.

Of the respondents at companies that offer a sign-on bonus, the most common offering reported is a cash bonus (46%), followed by stock options or restricted stock (28%), and a combination of cash and restricted stock or options (26%). The results also showed that more than half (60%) of the respondents have a target bonus opportunity in 2016, and that the median level on bonus percentages for the top finance position at private companies is slightly higher than at public companies.

The financial executives surveyed were also asked about the long-term incentives they are offered. Most (89%) of the public company respondents said they receive some form of stock-based incentive compensation, while just 35% of the private company respondents reported receiving some type of stock-based incentive compensation. By contrast, less than one-quarter (22%) of respondents reported that they are eligible to receive long-term cash incentives.

 

Among the executives surveyed who are eligible for long-term incentives and whose awards have a performance or market condition for vesting, the most common measures for determining payouts cited are company strategic goals/objectives (19%), followed by more specific company financial performance measures like EBITDA (15%).

Nearly all (95%) of the respondents said they have access to a defined contribution plan, while 23% said they have access to a defined benefit plan. However, nearly half (47%) of respondents at companies that provide a defined benefit plan said the plan restricts new entrants or has frozen benefit accruals.

When asked who at their company is responsible for making pay decisions, 45% of respondents said the CEO/management makes all compensation decisions, while 44% reported that their company’s board of directors makes the pay decisions for senior executives.

Benefits Trends, Volume 59, Issue 7

The information contained in this post is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. The information in this post is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2016 Liberty Publishing, Inc. All rights reserved.