For this month’s column I would like to kick off by focusing on a couple of data points.
The Internal Affairs and Communications Ministry predicts that Japan’s working-age population will decline by about 14 percent, or 11 million people, by 2030. This will outstrip the 9.6 percent fall in that segment of the population between 1995 and 2013.
Daiwa Institute of Research predicts that if the government regulates to curb overtime to a maximum of 720 hours per year, it will require an additional 2.4 million workers to compensate for overtime that cannot be legally worked.
According to a survey by NPO Fathering Japan, 91.8 percent of Japan’s middle and senior management do not believe they are getting adequate support from their company in implementing new work-style reforms being pushed by the government.
In a sellers’ market, Recruit Career reports that the percentage of new graduates who turned down job offers climbed above 60 percent.
The Edelman Trust Barometer found that only 40 percent of Japanese say they trust the company they work for. This is the lowest percentage in the world and 8 points below the next lowest country — Russia. It suggests that the highly committed, samurai-spirited salaryman may be a thing of the past.
This data paints a very bleak picture for companies in Japan: A shrinking workforce that feels unsupported and does not trust its employer while recruitment of new talent becomes increasingly difficult in the tightest labor market in several decades.
This disengagement and perceptions of lack of support on the part of the employee can be attributed to the onslaught of more complex economic conditions since the financial crisis. It could also be the result of ongoing globalism in which employees suddenly find themselves having to conduct meetings in English or that their new boss is not a Japanese.
But by far the root cause seems to be that companies are not investing enough in strategic employee communications. Just the fact that you are a well-known company with some really good products and you pay your employees well is not enough to produce an engaged workforce.
And in a changing world in which there is an imperative for companies to continually evolve their corporate culture, it is no coincidence that in many of the recent crises being experienced by Japanese companies, corporate culture is being blamed as a root cause.
This is important for business. Gallup in 2017 reported that business units in the top quartile of employee engagement outperformed bottom-quartile units with 17 percent higher productivity, 20 percent higher sales and 21 percent higher profitability. McKinsey Global Institute reported productivity increases of 20 to 25 percent when employees are connected with effective communications channels.
And both in Japan and globally, employees are now more trusted as sources of information about a company than the chief executive officer or analysts. The old dynamic of producing good external news about your company that will be read by employees and install confidence and pride has been upended, with companies now needing to leverage employees as spokespeople to create positive external news.
So, what makes for good employee engagement? Is it a great company newsletter? How about a regular town hall meeting? Or, the latest is to use chatbots to allow employees to access company information in the same way that employees use chat apps with their family and friends.
These tactical platforms can all be a very important part of the employee engagement mix, but the key is to implement a construct that spurs on three types of behavior.
They are, first, focused behavior so that employees understand and are focused on delivering on the strategy. Do they feel an emotional connection to your purpose and are they inspired to deliver the best?
Second, aligned behavior so that employees are empowered to support each other to succeed. Are they a mobilized workforce with a shared purpose who share ideas to drive innovation and progress while ready to tackle challenges and underperformance?
And third, advocacy behavior. Employees understand what your clients and customers want and they deliver great service to enhance your brand. They are proud to promote your products and services and attract qualified new colleagues to your company.
Employee engagement cannot be simply about the company sending information to employees. It must be a dynamic of employees with company, employees with employees, and employees with the world. Only if it functions on building trusted connections at those three levels can it have a chance at producing the true benefits of engagement.
Behind this construct are some key principles that are the backbone to a successful employee engagement initiative. First, it must come from the top. Senior leaders must understand, support, and clearly and consistently model and message the desired culture and behaviors. What senior management says is mirrored in importance by what they do.
Second, it needs to be real and help managers and employees connect with abstract statements by defining the specific behaviors needed for success — with measures, programs and incentives to reinforce and reward those behaviors.
It also needs to articulate the desired culture or behavior in a compelling way. Not just a dry corporate statement. Leaders need to be equipped as storyteller and managers as communicators.
And finally, it needs to ensure relevance. It must connect with employees and apply desired behaviors at every key touch point across the employment life cycle. Employees need to clearly understand what is in it for them, what to expect and what’s expected in return, and why it matters.
In today’s complex world where trust is low, and companies are competing with social media and other distractions for the attention of their employees, just sending out a few announcements and hoping employees will read them is clearly not cutting it. Employee trust of their workplace in Japan is the lowest in the world. In the present employment environment, it is imperative for companies to invest in communications with employees and raise levels of engagement. The return for this investment is increased productivity, easier recruitment and retention, and better profitability.
Ross Rowbury is president and CEO of the PR agency Edelman Japan. He advises senior business executives on issues ranging from corporate branding to media strategy and internal and external communications strategy.