Just what is employee engagement, anyway?
According to HRZone, it’s “The emotional attachment employees feel towards their place of work, job role, position within the company, colleagues and culture— and the affect this attachment has on wellbeing and productivity.”
Sounds like something employers should care about, doesn’t it?
Why employee engagement matters
Studies conducted by Towers Watson and Gallup have identified that an organization with an average level of employee engagement has a payroll efficiency of 63%. To translate that into dollars, for every $100,000 being spent on payroll, that employer whose employees are engaged at an average level is receiving only $63,000 worth of work in return. I don't know about you, but after I read that statistic, I had an entirely new appreciation for employee engagement.
Of course, payroll efficiencies will never hit 100%, but think of the bottom-line impact on the organization that can move these points even a littler higher!
So where does the remaining 37% of potential employee efficiency go?
When a company suffers from poor levels of engagement, there are a lot of associated costs, but many are liable to be overlooked:
- Turnover is higher
- There is a greater demand on HR and its associated resources
- Communication becomes more difficult and less effective
- Attracting high levels of talent becomes more difficult
- Management spends unproductive time with disengaged employees
- Workplace accidents increase
- Employees are less productive, spending time complaining, looking for another job, not working to potential, etc.
As bad as all of this is, it gets even worse. Lack of employee engagement likely means lack of client engagement, as well.
Dr. Gary Rhoads of Allegiance, a consulting firm specializing in employee loyalty and engagement, wrote a paper titled "The Spillover Effect," in which he identifies the correlation between employee and customer engagement as one of the most significant drivers to profitability. The more engaged a company's employees, the higher the likelihood of having engaged, rather than just satisfied, customers. Engagement is contagious. Not only does it spread from employee to employee, it spreads from employee to customer.
Research shows that when customers are engaged, they spend higher percentages of their discretionary dollars with the company with which they feel engaged. These engaged clients also prove to be more profitable on each of those dollars spent than are the company's customers who are merely satisfied.
Additionally, a synergy is created when a company has both engaged employees and engaged customers. In fact, they can expect to drive twice the financial results compared with organizations that are able to achieve active engagement from only one key group.
Signs that your employees are engaged
If an organization displays the following characteristics, they are in a good position to have high levels of employee engagement.
Employer engagement – The company actively seeks to understand its employees and acts with the expectations and preferences of the employees in mind.
Perception of job importance – Employees have a clear understanding of the importance of their job and how it contributes to the organization's goals and objectives.
Clarity of job expectations – Success in each position is clearly defined, and the resources needed to meet that success are provided. As a result, the employee can focus on organizational success rather than being preoccupied with personal survival.
Career advancement – Each employee has a clear plan of personal development and a realistic path of advancement.
Opportunity to contribute – Employees have clear opportunities to contribute ideas and initiatives that will improve the organization.
Feedback – Employees always know precisely how well they are performing; they receive formal updates on a regular basis.
How to improve employee engagement
Based on the list above, you probably have a good idea of how to improve employee engagement when it’s poor. However, here are a few specific ideas.
- Get input from your people. They know why employee engagement isn't as high as it could be and quite likely have ideas of how to make improvements. However, they need to feel comfortable regarding the confidentiality of their responses. Bringing in an outside consultant skilled at drilling down to the core issues could provide the right environment.
- As you hear negative comments, fight the temptation to become angry with any individual identified as a source of the negativity. Instead, focus on how the negative behaviors can be eliminated and address them directly.
- Be honest with the organization about what the survey indicated. It's okay to be disappointed with the results and to honestly communicate that disappointment. Fight the urge to sugarcoat the results and to downplay the impact. The employees know what they said, and they talk to one another. They will lose confidence if they believe that their input is being downplayed in any way.
- Start fixing it! It's too late to turn back now; you have to start implementing change. If you don't follow through, you will make existing problems worse, create new problems, and ensure that any future efforts won't be taken seriously. Publicly state your commitment to implementation.
- Prepare leadership to implement effectively. Engagement is largely about the culture within an organization, and cultural changes have to start at the top. Spend time with leadership focusing on specific behaviors they need to demonstrate to make the implementation successful.
After you have given yourself sufficient time (a year at a minimum) to implement your initiatives, ask your employees how the changes are making a difference. Fight the urge to start asking too soon. Cultural transformations, including improving employee engagement, take time. Asking for feedback too soon will result in inaccurate feedback.
Employee engagement isn't a project; it's part of the culture. It may take specific projects to improve it from time to time, but it requires ongoing, daily work to make sure it’s maintained.
Get to it!
While employee engagement may seem to be elusive and intangible at times, the impact it has on virtually every aspect of your organization (including customers and bottom-line profitability) makes it something that can't be ignored.
There isn't a company out there that can't benefit from very consciously focusing on employee engagement. What’s stopping you?
Photo by Dmitriy Shironosov