Half of the world’s employees hate their jobs.
That’s according to a Gallup poll shared by Motley Fool co-founder, Tom Gardner in late 2013. Unfortunately, the statistic hasn’t gotten better with time. A more recent poll showed that 85% of employees are either not engaged, or actively disengaged at work. In Singapore, a survey showed that 51% of employees have been with their employer for less than two years.
Picture this: If the ten employees were in a dragon boat, less than two are rowing. That’s the shocking state of companies around the world. We could be investing in these same companies too.
Half Full Or Half Empty
There’s always two sides of the coin. What is an alarming statistic could also represent one of the most untapped opportunities for Singapore enterprises.
Gallup’s data suggests that a flawed performance management is the root of what it calls an employee engagement crisis. In other words, companies have the opportunity to get more employees rowing in the right direction if employee performance is better managed. As investors, we can hunt for clues in the company’s performance and compensation system.
As an example, I had the chance to speak with HRnetGroup Ltd’s (SGX:CHZ) executive director, Adeline Sim, recently. The group is the largest recruitment agency in Asia (ex-Japan).
HRnet has designed an employee performance system that it believes will get its employees to behave like owners of the company, rather than just employees. Under the company’s 88GROW and 123GROW program, HRnet employees can literally become co-owners of the company.
Participation in these programs has to be earned.
To qualify for the 123GROW program, for instance, the prospective staff has to show that he or she can generate three times their individual payroll in gross profits (also termed “productive headcount”) for a period of twelve months. Sim said that the amount of gross profit for each project is transparent to its staff, driving the employees to think like owner on where best to invest their energy.
Program participants who continue to meet their goals will be awarded with, among others, shares of HRnet, effectively making them part owners of the company. Trivia: the employee’s name card would also list them as co-owners of the company, a nice touch.
The programs have tangible results to show.
Based on its 2018 first quarter results, HRnet reported that 70% of its entire sales employees are considered productive headcounts, up from 66% in 2017. HRnet also estimates that its 88GLOW program in boosting its PATMI (profit after taxes and minority interests) by 8.6%.
To be sure, HRnet’s approach is not for everyone.
The training regime can be demanding, and attrition can be high for the first couple of years. But the ones that persevere tend to stay with the HRnet for the long haul. The company boasts 154 leaders with an average length of service of at least nine years.
A Foolish Take Away
“Culture eats strategy for breakfast.”
That’s a quote from Peter Drucker, highlighted by Tom. How true. At the Motley Fool Singapore, we go beyond a company’s financial figures to look for clues within a company’s culture. We interview management teams, and look for the ones that can guide their companies forward in an increasingly uncertain business landscape.
If you want to know which companies we believe are the very best companies in Singapore and abroad, with the best potential to beat the market over the coming years, take a look at our flagship newsletter Stock Advisor Singapore.
A version of this article first appeared in the 13 July 2018 edition of Take Stock Singapore.
The Motley Fool’s purpose is to help the world invest, better.