Employee surveys have been around in the UK for decades, but until fairly recently were largely designed to provide employers with a snapshot of workforce satisfaction. It was generally accepted that a satisfied workforce was a motivated workforce and so, in turn, a more productive one. As a result, surveys tended to be one-off events with no obvious outcomes or significant links to business performance.

The advent of major skill shortages and the scramble to retain talent in the late 1990s, alongside major advances in IT systems, gave employee surveys a new lease of life. Now employers were not looking merely for satisfied staff, but engaged workers who understood where the organisation was going and were prepared to make that extra effort to help get there. Surveys became a means of both measuring employee engagement and understanding what was driving it. The result has been a thriving survey industry with dozens of market researchers and consultancies offering bespoke and off-the-peg products.

However, as hundreds of thousands of jobs disappear, it will be interesting to see how both employers and the survey industry respond. Will the annual staff survey emerge as a nice-to-have or an essential business tool?

Geoffrey Matthews, vice-president of the HR centre of excellence at pharmaceutical business Merck Serono believes firms would be mad to dump their surveys at the first whiff of bad news. “Smarter organisations will figure out that this is exactly the time when they need to be sure people are on board,” he says. “In this way, they can take people with them through the changes and ensure they are fired up when conditions improve. If employers stop talking to them, there is a danger staff will think they are only interested in people during the good times.”

Merck Serono ran its first employee engagement survey last year, 12 months after the business was formed from the merger of German pharma company Merck KGA and Swiss biotech business Serono. “We wanted to see how we had come through the whole process and what we needed to do to get people on the same page,” says Matthews. “We don’t want to be one of the biggest pharma businesses but we do want to be the best, and that means being a great place to work.”

This means tracking engagement levels and Matthews intends to repeat the survey on an annual basis. However, being the best also means knowing how your competitors are doing. To achieve this Matthews had to use a major employee survey consultancy – in this case Towers Perrin-ISR – with the capacity to benchmark Merck Serono’s results against a range of similar organisations. Matthews now knows that the business is roughly 10 per cent ahead of organisations that have been through a similar change, but still has much to learn from other pharmaceutical businesses. “This gives us something to aspire to,” he says.

Merck Serono has used the survey data to develop action plans on a global and country level and by function. But it has not yet linked the results to business performance. Yves Duhaldeborde, regional director of Towers Perrin-ISR, Europe, believes this is only a matter of time. His firm has tracked 40 multinationals over three years, comparing engagement scores with financial results, and found that those with high engagement scores had net profit margins of 3.44 percentage points higher than those with low engagement scores. “Engagement shouldn’t be seen in isolation,” he says.

Indeed there is little point to employee surveys that don’t have a positive impact on the business in some way. This means asking questions that will make a difference which, in turn, means understanding the business context when embarking on a new or repeat survey. “Organisations need to find out what will make a difference to them and what the important points are to measure now,” Duhaldeborde says.

Linda Holbeche, director of research and practice at the CIPD, has followed the development of staff surveys from happy sheets through to more serious research projects and believes that in many cases they have gone beyond mere engagement measures. “Organisations want to know where they can target initiatives that will make a difference and in some cases this has become highly sophisticated,” Holbeche says. She points to Standard Chartered Bank: “It can distinguish between management styles and knows that by changing certain things it can drive up performance in that area of the business.”

Holbeche maintains that most of this good practice has come from a few large organisations that have been through major change. But there is increasing evidence to suggest that the public sector is also keen to use staff engagement data as a means of driving up performance.

Greater Manchester Police (GMP) recently attracted a 62 per cent response rate in its first all-staff survey since 2003. The survey is linked to a major shift in how the organisation intends to measure itself. “We’ve moved from a crime and disorder focus, with its emphasis on logistics and numbers, to a balanced scorecard approach,” says Cathy Butterworth, people and development director. This still includes crime and disorder measures but also assesses force effectiveness, the trust and confidence of local communities and people effectiveness.

As with Merck Serono, GMP is looking to run the survey annually and develop some trend data. Butterworth believes this should feed into two or three areas of the balanced scorecard, including, of course, people and leadership effectiveness but also local trust and confidence and broader force effectiveness. “People make up about 85 per cent of our resources so a huge amount of our organisational capacity is tied up in our people,” says Butterworth.

She is also hoping that the survey will have an impact on the culture of the organisation. Across the pond, US firms developed employee surveys after the first world war as a means of giving staff a voice – at the time they were designed to be an alternative voice to increasingly powerful unions. That’s clearly not where Butterworth is coming from. But she is hoping that the survey will encourage staff to be creative and innovative. “Our organisational structures don’t necessarily lend themselves to creativity,” she says. “We do command and control really well, but this doesn’t have to be the leadership style for every minute of every day. We do want people’s engagement and their ideas.”

Westminster City Council is being even more ambitious, linking its survey closely to the organisation’s – if not individual managers’ – performance. In addition to its annual survey, Your Voice, the council last summer set up a series of quarterly staff surveys. These mirror some of the research work the council carries out with residents into the quality of services and one of the aims of Neil Wholey, head of consultation for the council, is to link these together.

He recognises that it is not enough simply to draw links and announce survey findings– the organisation has to do something with them. “If nothing happens, the surveys will die a death,” he says. As with Merck Serono, managers are expected to develop a set of action plans that feed up through the organisation. Quarterly surveys can be used to check this is happening.

For Merck Serono, GMP and, to some extent, Westminster City Council, surveys are still new and shiny. The test will be in maintaining their current momentum through increasingly difficult business conditions.

It’s the inability to keep the flag flying and lack of continuity that ultimately scuppers most surveys, says Stephen Wood from the Institute of Work Psychology, University of Sheffield. Often surveys depend on a single, usually HR, champion and when he or she moves, the survey stagnates. “It’s not a system but the decision of one person, even in quite large and sophisticated organisations,” he says.

While there is clearly some good practice around, Wood believes that many organisations are still failing to maximise their investment in staff research. He estimates that the average cost of a full staff survey is around £30,000, with many of the large survey businesses charging much more than that. “If organisations invested that sort of money in physical capital they would spend more time thinking about why and how they were doing it,” he says.

Wood argues that while surveys have moved on from assessing satisfaction to assessing engagement, many still measure attitudes rather than behaviours. “Employers need to truly understand what is driving performance in the organisation and they should have this understanding before they decide what they want to measure in a staff survey,” he says.

With at least 600,000 jobs forecast to disappear over the next year, there will be intense pressure to cut costs and concentrate on shorter-term gains. In this environment, a good system of employee research can yield huge benefits to an organisation looking to harness the creativity and commitment of those who remain. But employers need to be aware that it is a time-intensive activity that requires the buy-in of the entire organisation - not only in its first year, but every year.

Vodafone UK’s survey sets engaged tone
The challenge facing Vodafone UK over the coming 12 months is to pull together the different employee research activities that the company runs to get a fuller picture of what employees think about the business.

“In the past we have tended to run a survey and look at the results in isolation, but we have been missing out. We need to look at the whole body of data that we collect,” says Elaine Robertson, employee insights manager. “Our aim is to have a single action plan based on all our information.”

The business currently runs three employee research programmes. A monthly people panel draws on the views of 500 people from across the business. “We use them as a sounding board for ideas on, for example, product branding or HR practices,” says Robertson.

In addition, the company runs an annual engagement survey targeted at all 10,000 UK-based employees. This drills down into what it’s like to work for Vodafone UK, including what staff think of the physical environment, their line managers, the leadership team and the business strategy. The high response rate of 75 per cent is in part down to good internal marketing. It also helps that some staff, such as call centre employees, are given time off to complete the survey – a sign of how seriously senior managers take the study.

Vodafone UK’s final regular piece of employee research is called a brand health tracker. It was only set up last year, and looks at how engaged employees are with Vodafone’s branding and advertising.

Robertson says. “We want all our employees to be advocates for the business but it is hard for them to do this if they don’t rate our branding in the market place.”

She does not believe that declining business conditions will have a significant impact on the level of employee research the company carries out apart from perhaps changing some of the questions. “Our leadership team really does believe that employees will make or break us. So we need to know what they think,” she says.

Making the most of employee research
Following a few basic rules will help you get the most from your survey.
- Know why you are doing a staff survey and what you want from it. Ask questions that will release data of most relevance to the business.
- Decide whether you need an external supplier and, if so, what sort. If you want to benchmark yourself against other organisations, you should probably look to one of the major research firms.
- Secure the buy-in of managers by linking the survey to performance. This could be the performance of the business as a whole or that of individual managers. 
- Plan your research timetable carefully and integrate it into the business cycle. To develop a meaningful action plan, results need to be out in time for the budgeting round. 
- Set up a system for feeding the data back to staff. This needs to be ready to go as soon as the results come in. The results are what they are and if you hold back you will lose credibility.
- Be prepared to develop an action plan based on the data findings. This should be a company-wide initiative but you could also insist that individual departments and units develop their own action plans.