Above & Beyond

When employees go the extra mile, does the bottom line benefit?

The company has also introduced a number of standalone initiatives. Passports for 2012, for example, gives each employee a document containing the answers to two questions: “What is my individual contribution to 2012″ and “What are the company and my manager going to do for my own personal development?” Employees discuss answers to these questions with their managers twice a year. “It’s a very good conduit to employee engagement,” says Duverne.

With Axa Miles, meanwhile, every employee received 50 free company shares in July as a thank you for helping the company hit underlying EPS and customer satisfaction targets during the first two years of Ambition 2012. (Customer satisfaction scores rose from 70% in 2004 to 79% in 2006.) If the programme remains on track and customer satisfaction levels reach 82% in 2008, employees will receive another 50 shares each.

Although these initiatives help, Duverne reckons boosting engagement depends a lot on internal communications and management — making sure strategies and priorities are well understood, articulating clearly who’s accountable for what, explaining what’s going on in the company, and managing fairly. How is Axa achieving all this? Every year staff at its Paris headquarters are briefed on the company’s performance and future plans and can ask questions to senior managers, including Duverne, at a one-day event. They can also join workshops to discuss what’s happening in different parts of the company with various business unit heads.

Last year, managers went a step further and conducted a series of breakfast and lunch meetings with all 870 group-level employees based in Paris. They met 20 employees at a time to discuss their understanding of Ambition 2012 and canvas opinions on improving employee engagement.

In addition, Duverne has a Q&A session with the finance staff of every business unit he visits. “I try to have a dialogue with people and show my interest in what they are doing,” he says. In his quarterly meetings with unit-level CFOs, he spends half the time talking about personal development issues. “I believe it’s one of the most important things that I do,” he adds.

Keep the Customer Satisfied

How do the surveys, HR initiatives and meetings contribute to the bottom line? “We know that in our companies where employee engagement is high we have better customer satisfaction indices than in our companies where employee engagement is low,” says Duverne. That trickles through to better overall performance. Studies conducted at two divisions — Axa France and Axa Equitable — show that satisfied customers have a two to four times higher cross-sell rate and a two to three times lower cancellation rate than dissatisfied customers. Duverne reckons customer satisfaction also drives customer retention and acquisition, and thus Axa’s financials. Revenue increased from €67 billion in 2004 to €79 billion in 2006, while underlying EPS rose from €1.43 to €1.95 over the same period. Net income increased from €3.8 billion to €5.1 billion.

Although Duverne is convinced there is a direct link between engagement and the bottom line, “we cannot statistically measure it in a way where we could assign a financial number,” he says. If he could, maybe those analysts would start to really listen.

Eila Rana is senior editor at CFO Europe.

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