The Dimensional 2020 Global Advisor Study aimed to shed light on the employee experience of participating firms by inviting them to complete a designated Employee Experience module. In this article, we share some noteworthy findings and overarching themes drawn from data collected in this module. The focus on human capital was particularly salient, given that total compensation often represents the single greatest expenditure for firms, averaging 47% of total revenue in the study last year. Loss of talent can mean loss of revenue, as firms in the study cited the loss of an advisor among the top three reasons for lost clients.
Our analysis compared high-retention firms, which averaged a 1% loss in total headcount, to low-retention firms, which averaged an 18% loss, in areas including employee and leadership development, measurement of the employee experience, and the use of tools and resources to influence the overall experience.
Regarding employee benefits, a few themes emerged that distinguished high-retention firms from low-retention firms. High-retention firms were more likely to offer the following benefits to employees:
- Cell phone benefits
- Community service day
- Parental/caregiver leave
In addition, high-retention firms appeared to develop a more comprehensive culture of continuous learning through their occupational benefits. High-retention firms more often offered reimbursement or cost coverage for the following educational benefits:
- Continuing education
- Industry conference attendance
- Licensing and professional designations
- Online courses
A key consideration is determining the value employees derive from the benefits firms offer. Firms that have a clear employee feedback process may be better able to provide benefits that have the greatest impact on their employees and, correspondingly, to the firm at large.
Beyond employee benefits, an emerging trend was a focus on diversity and inclusion (D&I) programs. In all, 4% of firms that completed the Employee Experience module responded that they had an active D&I program, with a focus on recruiting, establishing a dedicated committee, and creating specific events to help drive this initiative.
Firms remained focused on their culture and how it could attract and keep talent. When asked about top activities for cultivating culture and team engagement, responses ranged from “including the team in strategic planning” to “giving team members . . . authority to determine how they work together as long as the work gets done.”
Lastly, a topic of increasing importance was the physical workspace. The Dimensional study, conducted in late spring 2020, indicated that 55% of respondents had moved or modified to better meet the needs of employees in the last three years, including adding total square footage, increasing the number of conference rooms and private space, and providing standup desks.
Critical to an open dialogue between employees and the firm is assessing employee engagement. In the study, 33% of firms measured the overall employee experience, and certain trends arose from high- vs. low-retention firms.
High-retention firms were more inclined than low-retention firms to measure culture and values, confidence in leadership, and benefits. The employee feedback that firms receive can allow them to assess overall employee engagement and aid in making adjustments to improve overall engagement. Also of note, 60% of high-retention firms received feedback from employees in an anonymous manner, allowing employees to freely provide their thoughts about the organization.
Lastly, of those firms that did measure the overall employee experience, 66% indicated that the results made an impact on the organization at large. One study participant stated, “We have restructured the team to give them more autonomy while dealing with clients. We have also revamped the infrastructure for a more flexible environment.”
Closely related to employee engagement is the focus that firms have on employee development. In all, 36% of firms indicated they had formal employee development plans, and one-third of firms had a specific process for developing leaders. This process included promoting a mentor-mentee relationship, and making formal learning programs within the industry accessible.
As employees progress in their development, a clear career path with well-defined metrics can help gauge success in the role. However, any progression by employees in their career path should be predicated on the needs of the organization.
One tool for mapping how a role may progress is a current job description. When examining the differences between high- and low-retention firms, a few components stood out. In addition to stating the hard skills needed for a role, high-retention firms were more likely than low-retention firms to also indicate the backup duties and character qualities (e.g., soft skills) needed to excel in the role.
Some components of the Employee Experience module results were common among all participating firms. Both high- and low-retention firms indicated they had a written mission, vision, and values statement; written job descriptions; and a formal organizational chart. “While these tools appear to be table stakes more than ever before, merely having these tools is not sufficient. Effectively using them to lead the organization, develop employees, and communicate the direction of the business may be areas of opportunity for firms experiencing low retention rates,” said Catherine Williams, Dimensional’s Head of Practice Management.
One way to measure the importance and impact of measuring employee engagement, investing in development, and systemizing the employee experience is through the impact on revenue growth. High-retention firms were able to garner greater revenue growth than low-retention firms, 13% vs. 8%.
Much like the strategy a firm has for growth and running the business, a strategy for how to attract, retain, and engage employees is equally critical, regardless of the size of the organization. Low-retention firms might consider looking closely at why employees have departed or why the firm is struggling to attract talent. Compensation, lack of a clearly defined career path, or poorly designed job postings and descriptions could be contributing factors. Beginning with the table-stake items, then assessing what can make the employee experience unique at a firm are great places to start.