13.06.2023

Rethinking personnel strategy: Invest in DWP

A digital workplace geared toward the employee experience delivers better long-term impact than re-staffing key positions.

The recent DSCS study shows that a digital workplace geared toward the employee experience delivers better long-term impact than re-staffing key positions at your company. Save yourself that call to a headhunter.
 

A few weeks back, in the article on our Viva Customer Roundtable, I pointed out the rising awareness of employee experience, as employers need to pull out all the stops in the current war for talent. In the meantime, we have published the German Social Collaboration Study (DSCS), which was conducted together with TU Darmstadt. In light of the figures it contains, I’d like to start this time around with a bold hypothesis: It’s better to invest in the digital workplace (DWP) than in headhunters! How did I come to get so deep into HR and recruiting topics, with such an audacious claim?
The study shows that the maturity of the DWP has a direct effect on employee satisfaction and loyalty to the company. The more progress a company has made in terms of the digital transformation, the happier its employees are and the stronger their ties with the company.
A look at the DSCS highlights this connection across all of the factors involved in the employee experience, with impressive effects. Loyalty, well-being, collaboration – companies that have already reached a mature stage in the area of the digital workplace have higher employee satisfaction across the board. This is a significant increase that simply cannot be ignored.

But what does all this have to do with headhunting? Well, the findings of the DSCS do offer impressive proof that companies can earn employees’ long-term loyalty through their digital workplace. Turnover is reduced across the board. And that is much more impactful in the long run than deploying headhunters over and over to find individual people, doing expensive outreach, and then – once you do finally win them over – having to go through the lengthy and equally costly onboarding process and learning curve.

Skilled workers in particular are often especially sought after, and an attractive working environment like the kind a DWP offers can keep them with the company. What’s more, even frontline workers (the crucial face to the customer!) maintain better ties with the company this way.  Headhunters are not usually used to find frontline workers, but competitors are prone to poaching right on site, as we know from examples in the logistics industry.

And do you know how much headhunting and the financial ramifications of high turnover rates end up costing German businesses? According to one recent study by the German Association of Management Consultancies (BDU) (in German), recruiters’ fees have remained stable and then some for the past few years, currently amounting to 27% of the target annual salary for each new hire in Germany. No matter how you look at it, that’s a few tens of thousands of euros each time around, for just one new person – and how many new people are you looking for right now? Aside from that, the effects of high turnover on collaboration and stability within teams should not be underestimated, although they are harder to quantify.

All this means investing in the DWP boosts general satisfaction, so it provides some defense against headhunting among your own people and makes headhunters less of a necessity. I stand by my hypothesis, which the survey respondents evidently support as well. The more advanced the DWP is at their organizations, the more likely they are to report that they see its potential. So the future is no longer looking quite so bright for recruiters.

We do a lot of work on the effects of digital transformation on the working world (you might have seen the Schottcast on the DSCS). We are increasingly seeing and understanding why expanding the digital workplace is a promising strategy.

Want to know what this might look like in concrete terms?  Microsoft Viva, an employee experience platform, offers the advanced and targeted solutions for improving the employee experience in the DWP. You don’t even need the full module landscape; the basic requirements of clear communication and relevant information that the study highlighted as well can be achieved with Viva Connections alone. This is a promising and simple approach for enhancing employee satisfaction and loyalty to the company – and sending headhunters packing.

Author

Martin Weinhardt

Martin Weinhardt

Head of Competence Center Employee Experience