- Are your employees fully present at work?
- Are you getting the most value out of the human resources you have?
- Can you boost productivity without adding headcount?
If you have a strong employee engagement plan tied to key business practices, you can be sure that the answer to all of the above questions will be a resounding “yes.”
The importance of employee engagement can hardly be overstated, no matter the size, make or value of an organization. From the first day of work through retirement or exit from your organization, it is important that your employees are actively engaged and contributing to the growth of the business. Engaged employees may be one of the greatest assets that a company can have.
There are wide differences in the performance of companies, both in terms of economic value and in terms of organizational effectiveness, even in a niche market. However, companies with the most engaged employees tend to be more productive, more profitable, more innovative, and more powerful than their competition. In fact, Companies with engaged employees outperform those without by up to 202%1!
Studies after studies have shown that engaged employees tend to be more focused on their jobs.2 Because of their intense focus on work, their productivity rates tend to increase. Such employees can get more work accomplished in a shorter amount of time, increasing your company’s equity value. Highly engaged employees are 38% more likely to have above-average productivity3¬.
Productivity and profitability are often inextricably linked. With employee engagement, this is no different. As a company’s productivity per employee increases, bottom line financial metrics also tend to improve. For example, employees who are able to focus on their work often show productivity gains of 20%, 30%, or even 40%. Increased productivity means that employers are able to gain greater quantities of valuable work outputs without increasing their labor, facility, or overhead costs. Increased profitability of employees can generate funds that directly fuel bottom-line company growth.
Engaged employees are more focused on their work, and less prone to errors and distractions. This focus is correlated with decreased workplace politics, reduced cognitive load, and increased capacity for innovation.
In short, it has been suggested that engaged employees not only ensure incremental benefits during market upswings, but also assure innovative ideas, commitments, and organizational support in down markets.4 As knowledge capital tends to increase in value, the value of employee engagement is likely to continue to rise.
Companies with engaged employees tend to be powerful market contenders. In part, this is because companies with the most engaged employees companies also enjoy:
• Lower turnover costs
• Fewer sick days
• Lower training costs
• Less lost job knowledge
• Reduced rates of accidents
• Reduced re-work
• Reduced errors5
• Increased customer satisfaction6
Depending upon your industry and company, the savings or benefits derived from engaged employees can contribute to a significant competitive advantage!
While many of these benefits may seem obvious to leaders with experience, many companies fail to actively engage employees due to the rapid pace of change and the daily grind of delivering on projects. Additionally, small and medium sized businesses lack the capacity or the resources to develop employee engagement programs, especially in a tough market environment. However, considering the benefits listed above, if you have not considered employee engagement in the past, it is never too late to start. Consider getting your internal HR talent trained in some of the engagement strategies listed below or get external help to initiate the process.
In short, the benefits of proactive employee engagement cannot be overstated and should become an integral part of your daily organizational culture and practices in order to create a powerful high performance organization!
NATIONAL AND INTERNATIONAL COSTS OF DISENGAGEMENT
Employee engagement is “one of the greatest challenges facing organizations this decade and beyond.” 7 Conservatively, it is estimated that less than 30% of those who go to work report even partial engagement with their work.8 Others have placed this figure as high as 71%.9
Nationally and internationally, the costs are enormous, ranging from over $4 billion to over $250 billion in lost value and productivity each year.10
Country – Estimated Annual Cost of Disengaged Employees
United States $250-300 billion
Germany $263 billion
Australia $4.9 billion
PLANNING FOR SUCCESS
Despite the numerous benefits of employee engagement, not all companies have strong plans in place for ensuring that their employees are engaged. Although 79% of employers surveyed rated employee engagement as a high priority, only 41% had an employee engagement strategy in place.11
Employee engagement plans can help bridge the gap between theory and action, and ensure that what’s important to you as a leader is actually happening within the organization. Too often in business, key messages can get lost in the process of communication and day-to-day work.
By having a clear plan and actionable strategies that connect your company’s people performance to the performance metrics that matter, companies can ensure that employee engagement doesn’t become overlooked and “fall off their plate.” By planning for employee engagement, a company is planning for success.
APPROACHES TO ASSESSING EMPLOYEE ENGAGEMENT
There exist four ways to assess employee engagement.12 Each of these approaches is associated with its own sets of measures.
Needs assessments involve identifying specific employee needs, and how organizations can satisfy these employee needs. Needs assessments measure a gap in the organizational results, and come in two basic varieties: extensive needs assessments, which use a large number of cases to describe an organizational population, versus intensive needs assessments, which examine a handful of cases in-depth to understand the cause-and-effect relationship between employee actions and valued organizational outcomes.
Examples of Needs Assessments include informal qualitative assessments as well as more formal instruments such as well as the Meaningfulness Framework Assessment.
Burnout assessments are often used to measure employee engagement among employees who do “people work,” especially among service roles such as human resources, nursing, customer service, and human services. Since an employee’s engagement in a service role depends upon his or her presence of mind and ability to lift the emotional load, it is believed that burnout measures are indicative of engagement.
Formal instruments include the Maslach Burnout Inventory (MBI), the more recent Copenhagen Burnout Inventory (CBI), and the DUWAS-10, among others.
Employee satisfaction assessments measure how satisfied and happy employees are with their current work roles. Because job satisfaction varies over time, and can be impacted by outside changes—from structural organizational changes, to policy changes, and even by unrelated factors such as problems in the individual employee’s personal life—satisfaction assessments are typically repeated at multiple intervals.
Examples of satisfaction assessments range from internal pulse surveys, to emerging “satisfaction” apps, to Net Promoter Scores, to the formal Gallup Q-12, among many others.
Multidimensional assessments are the current gold standard for measuring employee engagement. Individual employees are measured along various dimensions, to gather a better picture of their current performance, as tied to organizationally-valued outcomes. Such outcomes range from organizational citizenship behaviors—basically those activities which help others and the team, with comparatively less personal benefit. For example, if an employee volunteers to stay after work and mentor a new colleague, bakes brownies for the office party, or goes above and beyond his or her defined role by taking on projects which aren’t strictly part of the job, then the employee is displaying organizational citizenship behaviors which are sometimes used to indicate employee engagement.
Formal instruments include several Organizational Citizenship Behavior assessments as well as Task Performance Assessments.
Regardless of how you measure employee engagement, there exist many ways to promote employee engagement within your company.
WAYS TO PROMOTE ENGAGEMENT
Often, employees get a signal about what matters to the company by what is being measured. If what matters to your company is measured, and engagement isn’t measured, it also sends a clear message to employees—namely, that engagement doesn’t matter. Depending on what metrics matter to your company, you may consider using one approach for another. Regardless of the methodology which you take (and some approaches are better than others, depending upon your context), by integrating a measure of employee engagement into your annual review plans, you are powerfully communicating that employee engagement matters.
The value of measurement is strongest when it is repeated. Organizations are complex systems whose results may fluctuate over time. By consistently monitoring the measures, and tracking engagement over time, you will be able to spot trends and rising challenges in your company before they become an entrenched problem.
Measurement is only a first step. If you can tie rewards or other incentives to engagement, you may be able to guide employee behaviors to accomplish the organizational goals, without necessitating high expenditures on communications or additional team building activities. When policies and reward structures are aligned, employee behaviors tend to fall into place with the larger organizational strategy.
Finally, you can successfully motivate employees by providing an opportunity to develop individual skillsets and contribute to larger organizational goals through significant projects. Studies have shown that when employees find an opportunity to learn on a continual basis, they demonstrate less intention of leaving the organization. 13, 14For organizations and their employees, this is a “win-win” situation—employees have the chance to build new competencies, while employers benefit from higher levels of engagement, increased productivity, and ultimately, profitability.
1. Dale Carnegie (2014). The importance of employee engagement.
2. Kahn, W.A. (1992), “To be full there: psychological presence at work”, Human Relations, 45, 321-49.
3. Workplace Research Foundation.
4. Sarkar, S. (2011). A study on employee engagement at manufacturing industries. Global Management Review. 5(3), 62-72.
5. Edinger, S. (2012). Engagement provides fuel for productivity. Financial Executive, 28 (3), 24-27.
6. Harter, J.K., Schmidt, F.L. & Keyes, C.L.M. (2002). Well-being in the workplace and its relationship to business outcomes: A review of Gallup studies. In C.L. Keyes and J. Haidt, (Eds.). Flourishing: The positive persona and the good life (p. 205-222). Washington, DC: American Psychological Association.
7. Frank, F., Finnegan, R.P., & Taylor, C.R. (2004). The race for talent: Retaining and engaging workers in the 21st century. Human Resource Planning, 27(3), 12-25.
8. Chalofsky, N.E. (2010). Meaningful workplaces: Reframing how and where we work. San Francisco, CA: Jossey Bass.
9. Blacksmith, N. & Harter, J. (2014). Majority of American Workers not engaged in their jobs.
10. Meere, M. (2005). High cost of disengaged employees. Victoria: Swinburne University of Technology.
11. Silvera, I. (2013). Employee engagement a priority for employers. Employee Benefits, May.
12. Shuck, B., Reio, T.G. & Rocco, T.S. (2011). Employee engagement: An examination of antecedent and outcome variables. Human Resource Development International, 14(4), 427-445. doi: 10.1080/13678868.2011.601587
13. Islam, T., Khan, S., Aamir, M. and Ahmad, U.N.U. (2012), “Turnover intentions: the influence of organizational learning culture and multi foci citizenship behaviors”, Middle East Journal of Scientific Research, 12 (5), 650-661.
14. Lee-Kelly, L., Blackman, D.A. and Hurst, J.P. (2007), “An exploration of the relationship
between learning organizations and the retention of knowledge workers”, Learning Organization, 14(3), 204-221.
15. Lucas, S. (2014). How much employee turnover really costs you. Inc magazine.
Liz Jayanti Ph.D. is the Chief Scientific Officer of Shrewd Analytics LLC based in Minneapolis, MN. If you would like to discuss how to increase your firm’s employee engagement to drive business strategy, value, and growth, you can reach her at (952) 334-8193 or firstname.lastname@example.org.