Employee engagement has been a hot topic among HR experts for years. Yet studies by Gallup have all concluded that only about 30% of employees are fully engaged. It’s tempting to conclude that plenty of companies must be thriving without it, and, thus, consider it low priority for business.
In fact, Gallup estimates $450 billion dollars are annually lost due to lack of engagement. While businesses may be doing well, they could be doing a whole lot better with engagement practices in place.
Profiting from Employee Engagement
Engaged employees connect emotionally and intellectually with their company. Therefore, they’re motivated to act in the company’s best interest and contribute to the company’s well being. This manifests in a number of ways:
- Higher operating margins. A study of 50 companies around the world found operating margins to be three times higher for companies with high levels of engagement.
- Lower turnover rates. Companies lose $11 billion dollars annually to turnover, according to one study. Employees who are emotionally invested in a company are far less likely to leave. According to Gallup, engagement reduces turnover by 25% in high-turnover organizations and 65% in low-turnover organizations.
- Lower absenteeism. Engaged employees feel valued and wish to contribute that value to the company. As such, they are 37% less likely to be absent from work, according to the same Gallup report.
- Fewer safety incidents. Gallup also found companies with engaged employees suffer 48% fewer safety incidents. Unengaged employees pay less attention and take less pride in their work, which can lead to dangerous mistakes.
Engaged employees are willing to contribute time and effort above and beyond the minimum requirements of the job. They’re interested in developing a great product rather than simply an adequate one. They put in extra time when needed and encourage the success of the entire team rather than merely considering their own potential gain.
Actively disengaged employees, which make up about 17.5% of the workforce, can be just as destructive as engaged ones are productive. They can voice their dissatisfaction both in the workplace, spreading their attitude to others, and to the public, diminishing the company’s reputation and turning away customers.
The rest of the employees, about 50%, sit between the two. These unengaged employees work for themselves rather than the company. They do the job done because it’s necessary, but they see no reason to go above and beyond expectations.
Engaging your Workforce
Engagement is not the same as satisfaction. A well-paid employee might be very satisfied but still be indifferent to the well being of the company. Moreover, an engaged employee is more likely to accept not getting a raise this year because times are tough. They might also be willing to accept lower pay from a company which provides for the community because they see value in what the company does.
There are many different ways of measuring engagement, but the most common framework divides engagement drivers into 6 categories.
- Quality of Life. This includes the physical work space as well as work/life balance.
- Work. Employees want to feel they are doing something worth their time. Tasks should make use of their specific skills. Asking someone to do something which they aren’t qualified frustrates them at best. It also leaves under-utilized employees bored and undervalued. Make resources available. That way the employee doesn’t feel your handing an impossible job.
- People. The culture of a workplace is vitally important. Toxic co-workers and ineffective managers quickly make a place undesirable. Customers, the hardest to control, also contribute to the environment.
- Opportunities. If you want your employees to be their best, give them the chance to do so. In some cases, promotions can provide the opportunity to fully put skills to work. Learning opportunities also contribute, allowing employees to add to their skill sets and be even more productive and versatile.
- Rewards. Good pay and benefits are always attractive. Non-monetary recognition is also important, whether it be a formal award or a compliment from a superior.
- Company Practice. It’s much easier to engage with a company that reflects your values. As such, employees look at things like diversity and reputation. Company communication can be vitally important in helping employees understand all the company does and why it does it.
You certainly do not need to adopt all of these ideas at once, just a 5% increase in engagement translated into a 3% increase in revenue. Small improvements over time can benefit your company in very tangible ways.
Employees want to feel valued by the company, while the company wants to get value out of the employee. Engagement forms a system in which each of those points contributes to the other.
On top of that, many of the things contributing to engagement can be good for your company in general, such as fully utilizing skills and encouraging effective management. It’s less about catering to the employee and more about fully realizing the resources for which you are already paying.