Transcript
Mark:
Welcome to PeopleTech, the podcast of the HCM Technology Report. I’m Mark Feffer.
My guest today is Raphael Crawford-Marks, the founder and CEO of Bonusly. With the labor market being as crazy as it is, engaging workers so they feel as if they’re a part of something special has become a high priority for employers, that’s the space Bonusly plays in. So we talked about engagement and what’s changing with it, the impact of new ways of work and what employees think about it all on this edition of PeopleTech. Raphael, hi. Thanks for stopping by. Tell me about Bonusly. What’s the idea behind it?
Raphael Crawford-Marks:
Well, Bonusly is a platform for employee recognition, rewards and engagement. And what we do is we help companies build a culture of appreciation in their company because a lack of appreciation is the number one reason why employees quit, and having your top performers leave your company is something that no company can afford to allow to happen. And so Bonusly is the software solution that allows companies to create the environment in which they can attract, retain, and develop their top performers.
Mark:
Now, it seems to me that broadly speaking anyway, this is really about engagement, and engagement hasn’t been talked about, I don’t think for 20 years, it’s been talked about for maybe eight or 10. So, what have you learned about engagement since you started the company?
Raphael Crawford-Marks:
Yeah. Well, one thing I’ve learned is that oftentimes people are talking about different things when they talk about engagement, and so what I like to start with is level setting. That engagement is the sort of collection of feelings that an employee has about their work. And this is a complex thing, it’s about how you feel about your colleagues, it’s about how you feel about the work that you do, it’s about how you feel about the mission and vision of your employer, it’s about how you feel about the employer’s policies towards employees. But if you take all that together and do a summation of all of that, that is what employee engagement seeks to measure is the overall set of feelings that an employee has about their work.
Mark:
Did COVID change that? I mean, it seems like when everybody was in the office, there was one way to build the relationships and develop a sense of engagement, and now most people are scattered. Is that true? And what other impact?
Raphael Crawford-Marks:
COVID changed a lot. I think employee engagement was of critical importance before COVID, and what happened was the fact that COVID shifted an enormous number of workers towards hybrid or fully remote work took away from employers unacknowledged tool that helped them get some additional engagement or a boost to engagement for free, which was in-person interaction. Humans are social creatures, we want to interact with our colleagues, and it’s just hard, if not impossible, to have the kind of trust and relationship building interactions that humans crave through a Zoom call. But it’s pretty easy to do it if you’re co-located with someone and you happen to have lunch with them or happen to bump into them when you’re both riding the same bus to work or something like that. So, what COVID did was take away all of these spontaneous and organic and unplanned things that boosted engagement. And now, employers don’t have that tool in their toolkit or they don’t, if they have a great number of workers who are hybrid or remote. And so, they have to be much more intentional about creating an environment that supports employee engagement.
Mark:
Do you think most employers realize that? I mean, are they really working to bend their approach to engagement to reflect that new workforce?
Raphael Crawford-Marks:
I think they understand the value of having a great person or great people on their team. Most employers have seen the really remarkable disproportionate benefits that come from having a really great performer who is putting forth a lot of discretionary effort towards doing their job really well because it’s not just their individual output that is high, but they act as someone who lifts the output of everyone around them. And if you have a number of people who are engaged, then the output of the entire organization goes up. So I think most employers have seen that. But we are also sort of in a place where employers need to be retrained out of an old mindset, and that mindset is that basically since the dawn of office work, maybe before, corporations viewed employees as coin-operated machines, if we want you to do something, we will give you a financial incentive to do it, and that should suffice.
But what psychology tells us is that humans are not coin-operated machines. And that, yes, you need to pay a minimum amount to so that employees perceive that they’re being paid fairly, but once employees perceive that they’re being paid fairly, additional financial incentives do next to nothing to increase employee engagement. And so, companies really need to start thinking about, “What can we do to shape the environment that employees are in when they’re at work?” And that’s not just a physical environment, that’s a virtual environment, that’s our policies, that’s our performance management, that’s our career tracking. It’s everything to maximize employee engagement and to promote employee engagement.
Mark:
So, you talk about engagement, it’s a pretty human thing, you try to make people feel a certain way. So how does technology fit in and how does technology contribute to that?
Raphael Crawford-Marks:
Yeah. Well, I’ll share a little bit of my background, which is I had the good fortune to grow up and come of age in San Francisco in the mid ’90s, and I was introduced to computer programming at a very early age and became obsessed with it as soon as I discovered that you could actually write instructions and have computers do things. And what really attracted me to building software was the idea that you can create software tools that help people achieve results they want either by prompting them to develop new habits or helping reduce the amount of time they have to spend doing certain tasks. Software is not a panacea, but software can greatly multiply the effectiveness of humans when designed and deployed effectively. And that’s the view we take to creating software at Bonusly, which is we build software that aims to create positive habits around recognition and appreciation and feedback among the entire employee population that then creates an environment that promotes greater employee engagement.
And so, that’s really where I see technology is being the solution. There have been stories that I think are great to have reported about companies using technology to monitor keystrokes of remote employees and things like that, I think that is a terrible idea. And really that’s companies who aren’t getting it and are going about it the wrong way. But I think the flip side of that is technology can help humans build more positive, more effective habits, they can help them access information to help them make better decisions, and that’s sort of the approach to software design that we take.
Mark:
So, what are you hearing from your customers and maybe also prospects? I mean, what are employers doing about all this and how are they reacting to it?
Raphael Crawford-Marks:
Yeah. Well, we’re in sort of a weird economic time right now, there’s a lot of uncertainty, but we’re not in a recession, at least so far, no official recession has been declared, we keep getting surprisingly strong jobs numbers. And in many industries, though not in all industries, in many industries, there’s still a shortage of employees and there’s still extremely high employee turnover rates, and employers are really looking for ways to attract top performers. In other industries like our industry information technology, there are companies that have been doing a lot of layoffs. And in that, employee retention is also important because the exercise companies go through before doing a layoff is not deciding who to cut, it’s deciding who to keep, who do we absolutely need to keep to make sure this company gets back on track or on a successful path. And there’s a really robust body of research showing that when a layoff happens, it can cause a greater than 30% increase involuntary turnover after that layoff, and that’s losing the employees that you wanted to keep.
So, whether you’re in an industry that’s still booming or one that is shedding workers, employee retention is of utmost importance, and that’s what we’re hearing from our prospects is either, “Hey, we just need a riff and we need to make sure we keep the employees that we decided to keep,” or, “Hey, we’re struggling to retain employees and hire new ones, and we need to create a great culture that people will want to come join and then stay in once they do join.” And we’re hearing both of those, depending on the industry that the customer or prospect is in.
Mark:
We’re talking about compensation and retention. How does engagement line up with those? It would seem to me that employers need to be thinking about the impact of all of them on individual worker, but focusing specifically on engagement, how do you figure out where engagement fits in that puzzle?
Raphael Crawford-Marks:
Yeah. I think about it in terms of there’s certain factors that employers need to think of that are what we would call hygiene factors. And so, these are things that you have to do because if you don’t do them, you’re going to fail. And so an example is if I choose to stop showering, that is going to negatively, in fact, many parts of my life, but once I’m showering daily, I’m not going to be more successful just by virtue of the fact that I’m showering 10 times a day versus once a day. So a hygiene factor is just reaching some basic threshold where you’re meeting the norms and standards of the market, and that’s where compensation rest. Compensation is a hygiene factor, companies need to make sure that they are paying fairly and more importantly that that employees see that they are paying fairly and you have a wave of pay transparency laws being passed in a number of different states, and those are actually really beneficial to employers who have been good at their hygiene with compensation because they can actually then show to their employees, “Hey, we’re everyone fairly.”
Engagement is the next level up is how do we create an environment where an employee will feel motivated to go from doing the bare minimum to keep their job, to really wanting to put forth as much as effort as they can sustainably put forth. There’s usually a pretty gap between the minimum you need to do to keep your job and the most you can do sustainably over time, and companies will get more out of their employees if they’re able to create environment where people want to put forth that discretionary effort, and what drives discretionary effort is employee engagement.
Mark:
Now, I’m guessing that employees don’t really walk around thinking about engagement all the time, the way the employer or the managers might. So, how does this all work in the eyes of employees? I mean, just trying to make that balance between compensation say and retention and engagement, what’s their approach to it? Is there?
Raphael Crawford-Marks:
Well, I think employees are increasingly savvy. The economic and technological and social shifts over the past few decades mean that there used to be a implicit contract between employers and employees that if you worked for several decades for an employer, you would have a great retirement after you retired. And so, that was a contract of like, “Hey, put in your time, then you’ll get this great retirement,” that hasn’t existed for decades. And employees know that, hey, they’re free agents and they’re going to go to the employer where they feel it is most worthwhile to invest their time.
Employees know that they’re going to spend the majority of their adult waking hours working, and we have to do that for money, to earn money to live, but more importantly, no matter how much money you make, you can’t buy more time, so you want that time to be worthwhile, and employees are going to be thinking about, “Okay, where is it worthwhile for me to be spending my time?” And they have choices of where to go, and the more skilled they are, the more choices they have of where to go. And so that I think is how employees are thinking about it.
Mark:
My last question kind of bring up a new subject, which is a sense of purpose. I read things about engagement and they always talk about giving the employee a sense of purpose, that’s part of the equation, but that’s not really the kind of thing you can have meanings about. I mean, how do you make that work?
Raphael Crawford-Marks:
Yeah. So, I think a sense of purpose is derived from believing that your work has meaning outside of it just being what you were asked to do, you were asked to produce some result or some output, and so you’re doing it and you’re going to get money for it. A sense of purpose is derived from like, “Hey, this work I’ve done matters in some way.” And there are different ways to build up a sense of purpose among your employees. I think one critically important way is by having a very clear and memorable and motivating company vision, what is the future state that you are working to bring about? We recently did this with Bonusly, I said, “Hey, show me by hands how many of you have ever felt unappreciated at work,” 100% of hands shot up. I said, “How many of you put forth less discretionary effort because of that,” 100% of hands stayed up. “How many of you have left a job because you felt underappreciated,” and about 70% of the hands stayed up.
That is representative of how most employees experience work these days. And so I said, “Bonusly’s vision, and this is our vision that all employees are motivated by is to work towards a future in which nobody’s hands stay up when I ask those questions.” That is a big aspirational vision. We’re not going to achieve that in our lifetime, but we can make a big meaningful change in many people’s lives by working towards that, and that is one way to provide purpose to employees. Another way to provide purpose is by connecting employees to each other so they can see how their work helps other employees do work or perform better. Showing the impact that employees work has on each other or on customers, and bringing employees, even non-frontline employees closer to the customer base to see the impact that they have on their customers. That’s another way to improve or promote a sense of purpose.
Mark:
Well, Raphael, thanks very much for taking the time to talk today. It was great to meet you.
Raphael Crawford-Marks:
Great to meet you as well. Thanks for having me.
Mark:
My guest today has been Raphael Crawford-Marks, the founder and CEO of Bonusly. And this has been PeopleTech, the podcast of the HCM Technology Report. We’re a publication of Recruiting Daily. We’re also a part of Evergreen Podcasts. To see all of their programs, visit www.evergreenpodcasts.com. And to keep up with HR technology, visit the HCM Technology Report every day. We’re the most trusted source of news in the HR tech industry. Find us at www.hcmtechnologyreport.com. I’m Mark Feffer.
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