Edelman Strategic Insights

Employee Engagement: CSR that matters in China

“Employees are typically the last priority for information, not the first. But these are the people who are in the
best position to go either on the offensive or defensive for your company – so companies need to tell them first.
Transparency is the new green. Say what you’re going to do and say why - then actually do it.”
Edelman CEO Richard Edelman

Edelman China’s Employee Engagement practice takes a closer look at how employee engagement fits into the
broader operating environment in China today, and examines the issues highlighted by their 2009 Employee
Engagement and Internal Communications China Survey.

Edelman China’s 2009 employee engagement and internal communications survey highlighted the increasing
importance multinationals are placing on strategic employee engagement in their China-based operations. Over 50
percent of companies had a dedicated, full-time internal communications resource, with almost 67 percent based
at a local level. Over 80 percent of companies are expecting to increase spending on internal communications and
employee engagement activities in the next year. This is chiefly because the timely realization of companies’
ambitious growth targets for the Chinese market is increasingly dependent on successful employee engagement,
specifically in terms of attraction and retention of talent and to meet the demands of business expansion.
Given this, it is not surprising that the primary objective behind employee engagement initiatives overwhelmingly
was to ensure employees understood
the company’s mission or vision. Team
building and creating the desired
internal culture within the organization
were also listed as important, as was
supporting corporate transformation
activities. Close to 100 percent of
respondents said that their senior
leadership was either involved or very
involved in employee engagement
activities, and they expected this
What channel do you use most frequently to communicate with employees? involvement to increase in the next 12
months since employee engagement is seen as a business priority for the organization in China. However, most
practitioners continue to follow a more traditional approach to internal communications, with email and the
intranet being the most frequently used vehicles, well ahead of in-person, or face-to-face, communication.
Of the challenges listed by the respondents, the lack of internal resources was most commonly listed as their
primary obstacle. As a result, over 75 percent of companies surveyed use external consultants for a number of
different reasons, including: to provide additional resources, bring an outside perspective to the company’s internal
programs, as well as for the benefit of structured methodologies and best practices.

Edelman Shanghai - December 2009

Surprisingly, over half said that the current economic climate has had no impact on their internal communications
activities, saying that budgets for these activities had remained unchanged, or had in fact increased, over the past
12 months. When asked what were the key challenges affecting the success of employee engagement programs,
access to resources and budgets was the most common challenge, followed by effective implementation and
commitment from managers.

The Broader Context in China for Employee Engagement

Whilst the survey demonstrates that companies by and large are committed to having strong internal
communications programs, what is crucial for companies to understand is the business implications employee
engagement has in the greater context of rising
expectations from their stakeholders in China.
The government, media, consumers and
grassroots organizations all expect foreign-
invested businesses to show alignment with
China’s top priorities, maintain international
operating standards, while at the same time
contributing value to the country’s social and
economic development in exchange for the
continued legitimacy that allows them to make
fair profit through access to the China market.

According to Edelman’s annual Trust Barometer

in China, communicating frequently and openly
with employees is seen as a characteristic of
good and responsible companies by 79 percent
of Chinese stakeholders in 2007, against 59
percent in 2006.

Employees – and former employees - are

companies’ brand ambassadors: they are talking about their companies whether or not their companies are talking
to them. With a “person like me” - peers, friends and colleagues – being now the most trusted source for
information about a company, this has far-reaching consequences for how companies seek to manage their
reputation.
In short, not only does information about how your company acts towards employees has a large and ready
audience, but through social media and digital communications, employees now have rapid and powerful
communication channels at their finger-tips.

Things to do now to improve employee engagement in your organization

What are the things companies can do to better align employee engagement and internal communications
activities with their overall business strategy? Edelman’s Employee Engagement practice talks about what are their
key recommendations:

1. Corporate initiatives fail because of poor or improper communications

Internal communicators must serve as the link between corporate leadership and front-line employees when
introducing corporate initiatives, providing context and relevance. Employees will not support a corporate initiative
unless they understand its relationship to organizational strategy, priorities and overall effectiveness.

Edelman Shanghai - December 2009

 2. Start with where employees are vs. where the organization is headed
To move employees in the right direction, we must first determine where they are now. How much information
and understanding do they receive and possess? What do they really know about the business and its prospects
and, more importantly, their role in its success?

3. Brand = Company Culture = Brand The biggest challenge for us is

Brand is built on the internal development and sustainability of the company how we proactively engage our
culture. Employees must experience the characteristics of the brand in the people, instead of simply
reactively passing down
culture, manifested in:
messages”
 Company vision and values
Senior Communications Manager
 Business strategy
 Management’s actions in support of the vision, values and strategy — not
merely its words
 Products/services

Building brand equity begins inside with engaged employees because they are the most effective and sustainable
method known for building the brand, and they embody the brand and what it stands for. These are the people
who really do shape a brand’s evolution - for better or worse…..

4. Simplicity creates interest - Limit the corporate speak

The role of employee communications is to help the organization and leadership to keep things simple. As the
world becomes more complex and information overload threatens to overwhelm employees, the ability to keep
things simple remains a true competitive advantage.

We must filter our leadership’s messages from the abundant information employees receive, providing clarity,
relevance and focus. It is here that we as communicators have the greatest opportunity to provide value to our
organization’s culture.

While communication with external audiences will likely focus on the financial strength of the company, internal
communications must also address more personal and specific issues that relate to day-to-day operations.
Employees want to know ‘what does it mean for me?’ – Internal communications should focus on this.

5. The marketplace should dominate employee dialogue

The company’s external profile provides context for employees. From newsletters to employee meetings to
employee e-mails, we must use every opportunity to bring the customer and marketplace inside the company.
Competition, trends, industry issues, etc., provide employees with the proper frame of reference to assess their
performance and understand the company’s decisions.

6. Use a variety of existing communications

“Employees are the soul of our company, and
channels
we want to engage them on the way forward
for our business. Cross-function collaboration In general people need to hear or see things 5-6 times
is very important to us, so we invest a lot of before they start believing it. Using a variety of channels
making sure we have effective internal ensures that information will reach a broad base of
communication”
employees quickly and accounts for both an unwired or
HR Director, Greater China
mobile workforce.
This strategy also builds in an element of repetition and
consistency to the communication, which will aid comprehension. Finally, whilst written communication is
important for routine information sharing, the importance of face-to-face communication to engage staff and to
manage a change environment cannot be understated.

[Type text]
Edelman Shanghai - December
2009
 7. Give managers and supervisors the resources they need
Direct reports play a critical role in the communications landscape, but they need information that helps them
speak knowledgably to their teams. Provide managers with “tool kits” to communicate information to staff. Put in
place ongoing channels for managers to pass on feedback to management and where they themselves can turn to
for support with dealing with employees’ questions and concerns.
“We’re always looking for
8. Measurement gets you a seat in the board-room
ways to continuously
Have mechanisms in place that will provide solid quantitative and qualitative improve our internal
data on the response to internal communications format and content. This engagement – we rely on
assists management to make better decisions moving forward, but also helps employees to bring our
you benchmark attitudes and measure responses to decisions and events. strategy to life, so this is
100% business critical.”
Metrics also help convince senior management of the benefit and impact of
Internal Communications
employee engagement initiatives. Director

9. Proper treatment of employees is the new ‘green’ in CSR

Companies often overlook the impact CSR has on retaining and attractive top talent. Directing CSR efforts towards
employees is a powerful means of providing personal satisfaction and empowerment to staff for whom CSR
initiatives are a source of pride. Top talent will choose as a preference responsible employers they can be proud to
work for.
According to the Edelman Trust Barometer, the three main drivers for corporate reputation in China are: job
creation, sound environmental policies and respect for local customs and tradition - “makes charitable
contributions” ranks as least important. The upshot of this is that business-aligned CSR drives trust in MNCs in
China. A company’s approach to corporate responsibility is increasingly seen as proxy for good management in
general, and marks a healthy approach to risk and opportunity. Having a reputation as a ‘good and responsible’
company is now business-critical for any MNC in China.

In Summary
10 Action Imperatives
Communicating about sensitive information is not
1. Understand the key business & strategy goals, and
about spin or painting a rosy picture. Employees
reflect these in employee engagement programs
want to hear the truth about the future of their
2. Employees must hear news first from management –
not the newspaper or via office gossip company, pay, benefits and job. In today’s
3. Provide as much detail as possible - without over- economic environment business change is
promising inevitable and employees understand this.
4. Bad news is preferable to no news Companies need to develop internal
5. Duplicate communications to ensure key points are communications strategies for business change to
heard & understood (e.g. briefings & letters, team build a more informed and engaged workforce.
follow-up & bulletin boards)
6. Be consistent and honest in all communications December 2009, Employee Engagement Practice,
7. Avoid jargon and financial or corporate speak Edelman Shanghai
8. Be aware of cultural differences & nuances of language
9. Expect the unexpected – especially in personal
reactions & behaviours, and prepare managers
accordingly
10. See middle-managers as both an audience and a
conduit for information and messages.

Edelman Shanghai - December 2009