Wages used to be the greatest incentive to keep employees in a good mood. But Kinnarps' Trend Report shows that soft values, such as influence, affirmation and commitment are now ranked higher.
Maybe it was easier for employers before when tangible, perk-based working environments were the norm: a few extra pounds a month, a yuppie phone and a company car, access to a holiday home close to a ski resort.
When a new generation enters the labour market and there is a transition from the industrial age to a thought economy, the relationship between companies and employees is altered in many ways:
• The issues that motivate an employee are becoming more personal, which in terms of awareness places increasing demands on employers.
• Abstract perks are valued increasingly higher.
"Soft values are becoming more and more important. And they have a decisive effect on companies being able to generate revenue and make profit in the long term," says Thomas Fürth, Research Director at the research and consulting company Kairos Future.
According to an international survey conducted by Kairos Future, the most important conditions for making people feel happy with their work are the ability to influence the working situation, to get affirmation and feedback from managers and colleagues so that they feel committed to the job and enjoy it.
Every year, the best workplaces in 45 countries the world over are ranked by the research and management consulting company Great Place to Work.
Two-thirds of the assessment is based on staff experiences of their workplaces while the remaining questions are put to the company's HR department or management team.
In the Large organisation category, Microsoft has topped the list of Sweden's best workplaces three years running. The American computer giant is not trying to compete by offering most employee incentives; the greatest incentive is to have a job that is fun and where there is an opportunity for development. Swedish employees are for instance allowed to work with non-profit projects for three days every year and still get paid. One person has decided to donate stem cells, another has provided support to a relative with alcohol problems, while a third person has provided IT training in schools and nursing homes.
Between 2007 and 2010, SAS Institute, the world's largest privately owned software company topped the list of the best workplaces in Sweden. Company employee incentives are not based on generous bonuses but instead on flexible working hours, freedom with responsibility, a 35-hour working week and support for working from home.
Staff turnover at SAS institute has remained at two per cent for an extended period of time, compared to the industry figure of 20 per cent.
"Things which are important to employees are also important to employers. Employees that are happy are more loyal and committed, which brings clear financial benefits for employers," says Beata Osiecka, Managing Director at Kinnarps Poland and continues:
"Employers know that their employees are their most important asset, or perhaps they are more than that, they are the heart of the company. They therefore do everything to attract them and hold onto them."
Yet it is rather odd the gap that still exists between how managers and employees look at perks.
A survey found that 65% of managers think that money is the most important motivator for employees, but in reality that view is only shared by 18% of employees. Those employers who succeed in identifying the individual employee's wishes in terms of influence, affirmation and commitment have, in other words, the opportunity to have more motivated and happier employees, as a well as save money.
The trend toward softer values being more appreciated is in line with social development as a whole.
The search for meaning, authenticity and higher values other than those accounted for on the bottom line in the annual report are trends that are gaining more and more of a foothold. In our part of the world, which may be the most secularised, the need is possibly even greater for employers to represent more than maximum profits; work is no longer a place we go to, but something we want to believe in. For today's employees, personal gain is therefore not all that matters. The company's values and social responsibility have over time increased in significance and Corporate Social Responsibility has in a matter of years been transformed from an exclusive after shave to a hygiene factor. This is as a result of employees, and customers, more and more requesting softer values. Tim Oldman, CEO at Leesman Index which analyses workplaces, concludes:
"We are making progress in understanding what effect soft values have on business. In principle, soft values can be converted into business values."
Did you know that…
...Daniel Pink, author and former speechwriter for Al Gore has carried out studies that show that different types of tangible motivators can reduce intrinsic motivation, degrade performance, kill creativity and crowd out good behaviour. Tangible rewards can encourage unwanted behaviours such as cheating and fraud, leading to dependency and short term thinking.
…only 31 per cent of employees felt they were committed to their job according to the Employment Engagement study carried out by the BlessingWhite consulting firm.
...90 per cent of young Swedes think that personal development is the most important aspect of a career.