No doubt you have heard about employee engagement ever since Gallup surveyed many people and told us how disengaged the workforce is today. Since 1997, extensive research by Gallup has focused on describing the relationship between engagement and the impact on business outcomes. In a 2012 report, they noted: “Business or work units that score in the top half of their organization in employee engagement have nearly double the odds of success (based on a composite of financial, customer, retention, safety, quality, shrinkage, and absenteeism metrics) when compared with those in the bottom half.” This finding is not a one-time phenomenon as these results echo those found in previous research.
The Human Capital Institute (HCI) and Achievers partnered to explore how engagement is created and sustained through three key elements: The senior leaders, the managers and the employee. They call it the Trifecta of Engagement! Their research has some interesting facts I’d like to share.
In particular, how engagement affects the business metrics is something I want to know more about.
What is this engagement stuff and why should I care?
“Organizations with highly engaged employees achieve twice the annual net income of organizations whose employees lag behind on engagement.”
In Highly Engaged employees (HE) there are striking differences in the behaviors and outcomes they experience compared to Low Engaged (LE) employees.
In HEs, these are positively correlated with these specific behaviors and outcomes:
• Senior leaders authentically “walk the talk” of organizational values.
• Managers actively and consistently acknowledge employee contributions.
• Employees capitalize on development opportunities to broaden skill-sets.
• Employees have increased energy, enthusiasm and pride in their work.
These findings create positive outcomes that include higher productivity, a propensity to favorably impact customer satisfaction, higher revenues, and improved productivity. And to us HR folks, HEs are likely to remain at an organization a longer time, which reduces turnover and provides
greater continuity and organizational efficiency! Companies can no longer operate under the assumption that merely providing employment and a paycheck are enough to retain their employees. More attention must be paid to the level of employee engagement within an organization and how engagement is fostered by organizational programs and policies.
Effective new hire onboarding boosts retention, drives engagement, and gets employees functioning more quickly. An estimated 70% of new hires make the decision to stay at or leave an organization within their first six months. Effectively engaging new employees during the onboarding process is crucial to gaining long-term commitment.
But wait! There are also several critical workplace characteristics that drive employee engagement as well!
• Challenging and exciting work
• An environment of mutual respect
• Openness to new ideas and collaborative processes
• Clear communication about how every organizational role contributes to business success
What is the Trifecta?
Unfortunately, it’s not enough for an individual to say they are or will be engaged. If his or her immediate supervisor or manager does nothing to affirm the quality of work they do; if the organization does nothing to communicate how his or her work contributes to the success of the business; or if employees are told to act one way and see managers and senior leaders acting in another, feelings of disengagement
will grow. Engagement begins with words and a commitment to invest in employees, but at its core, it is about action. Senior leaders need to live the values of employee engagement by walking the talk of the organization, and employees must seriously invest their time and effort in these initiatives. The risk of not doing this is allowing disengagement to flourish. For engagement to be properly developed and maintained in an organization, their research identified and validated that there are three essential, interdependent components that need to be in place for true engagement to occur.
These components make up our Trifecta of Engagement:
Organization/Senior Leaders set the tone and lead by example
Managers support and value the strengths of employees
Employees must be open to engagement efforts and be emotionally invested
So what? Now what?
In this era of frequent change, global growth, and generational differences, many businesses and leaders recognize the competitive advantage that can be gained when there is a prioritized focus on understanding what elements drive engagement, and addressing them in a consistent and thoughtful way.
In an analysis of 50 global companies, Towers Watson discovered that, “Companies with low engagement scores had an average operating margin just under 10 percent. Those with high traditional engagement had a slightly higher margin of 14 percent. Companies with the highest ‘sustainable engagement’ scores had an average one-year operating margin of 27 percent.
What needs to take place in organizations with low engagement is the thoughtful design and development of a workplace that actively supports individuals that give consistent discretionary effort and have pride in the organization!
Of course there is more to this and I will share more next month. This bite is enough to chew!!