Few subjects have captured the imagination and attention of the business world in the past few years as much as employee engagement. Google searches for the term have increased by three-to-four fold over the past decade, while Amazon reveals more than 1,000 books related to employee engagement, featuring titles that range from the simple (Employee Engagement for Dummies) to the more descriptive (Carrots and Sticks Don't Work: Build a Culture of Employee Engagement with the Principles of Respect).
Interest over time - Employee Engagement (Google Trends)
So, clearly, the subject of employee engagement is currently hotter than a royal wedding; organisations have realised that, in the rush to become customer-focused, one of their most important customers is their workforce. That’s why US companies alone are spending almost US$ 750 million per year on improving employee engagement.
And yet, despite all the interest and spending, businesses of all shapes and sizes are dropping the ball. Between 2015 and 2016, global employee engagement fell (for the first time since 2012) by 2%. The annual Trends in Global Employee Engagement report by Aon Hewitt surveyed five million workers across a thousand organisations and discovered that just 24% of workers claim to be highly engaged, with a further 39% saying they are moderately engaged.
“Along with rapid advances in technology that are increasingly threatening job security, fewer employees are engaged and we expect this trend to continue.” Aon Hewitt’s global culture & engagement practice leader Ken Oehler.
2. Definition of employee engagement
Ok, so employee engagement is falling - but what exactly is it?
Great question. Considering it’s such headline news and organisations are pulling big wads of cash from their back pockets to improve it, employee engagement is actually fairly difficult to define which has resulted in some confusion and misunderstanding in the past.
There are an enormous amount of elements that play a role in how engaged an employee feels, such as company culture, training, job satisfaction, motivation, commitment, empowerment and recognition, with the weighting given to each of these depending on the company, role and even the employee.
- The Employee Engagement network says it’s when an employee “has a rational, emotional and motivational connection with the company”.
- Sibson Consulting simplifies the definition further and says it’s when an employee “knows what to do and wants to do it”.
- Perhaps the best and most accepted definition comes from an article by Kevin Kruse writing for Forbes: “Employee engagement is the emotional commitment the employee has to the organization and its goals.”
For us at Speakap, employee engagement is a recognition of the symbiotic relationship between employee, manager and organisation that aligns the objectives and needs of the individual with those of the business.
Kruse also explains that having employees that smile and don’t complain is not a barometer of engagement. “Making employees happy is different from making them engaged.”
If it’s this hard to nail down a definition, how can any C-level executive even begin to know whether their employees are highly engaged?
“Are they invested, responsible, and excited about projects? Can they collaborate and do they respect one another? If so, you probably have healthy employee engagement already.” Rob Wormley from WhenIWork.com
3. Measuring employee engagement
While the above question from WhenIWork.com is a useful shorthand, any analysts or data scientists reading this article doubtless just let out a stream of expletives that almost certainly contained the phrase “hippy bullshit”.
In today’s data-obsessed marketing landscape, one truism rules all others: You can’t improve what you can’t measure. With that in mind, there are a whole host of tools and methods for measuring employee engagement available, but regardless of the technologies used, most still fall into one of two categories:
- Annual employee survey: This remains the norm in many organisations despite obvious problems. The most glaring issue is ‘form fatigue’ with studies demonstrating that the length of a form correlates directly with an employees willingness to compete it - let alone complete it thoughtfully and accurately. These surveys typically take months to review and publish the findings as well.
- Weekly or monthly pulse surveys: These are currently more de rigueur amongst HR hipsters, as today’s employees like to feedback more regularly. However, these can also be problematic - good for a snapshot on engagement levels but unable to explain the how and why that a longer 50-80 question survey might provide.
What questions should you ask?
As for the subjects that should be covered, asking employees if they feel engaged with their company is a notoriously unreliable route to follow. Simpplr suggest asking indicators such as:
- How much work do you do outside standard hours? Engaged employees will feel free to manage their time and will enjoy getting things done even once they’ve said goodbye to colleagues.
- Do you work with a lot of partners? Engaged employees typically have large networks outside their immediate team.
- Do you spend one-on-one time with your supervisor? Engaged employees usually spend more time with their immediate manager.
- Have you spent time with senior management? Engaged employees often have relationships with next-level management.
- How fragmented is your workday? Engaged employees typically have significant periods to work on their projects, without too many meetings or events.
- What is the percentage of engaged to disengaged employees in your organisation? Disengagement spreads.
- What are your short-term turnover? If a lot of employees leave within the first 12 months, you likely have a culture of disengagement.
4. What’s the business value of employee engagement?
According to Deloitte, 79% of businesses confess to breaking out in a cold sweat and being unable to sleep that night whenever they hear the word ‘engagement’. But why? Without being more heartless than the Wicked Witch of the West (you know it’s been a good day in the office when you didn’t have to release the flying monkeys…), why should you actually care whether your employees feel engaged with the company or not, just as long as they don’t complain and get the job done?
Typically in the past, when looking at the ROI of engagement, studies have focused on the avoidance of negative impact: for example, an engaged workforce has a lower rate of turnover and absenteeism. In fact, disengagement costs US organisations US$ 450-550 billion per year.
But savvy managers are now looking at the positive side of that equation too, and realising that engaged employees increase the productivity of the workspace and improve the image of the company in the eyes of other talent, to an extent that impacts conclusively on the bottom line.
The age-old ROI argument
In his Forbes article, Kevin Kruse outlines his business case for employee engagement like this:
Put simply: it is your people, as much as your product or services, that create your business value.
- It costs on average 100% of an employee’s salary to replace them and then train a replacement, and it typically takes 12 months between advertising a vacancy and having someone in that vacancy, onboard, trained and fully productive.
- Companies with high employee engagement have between 25% and 65% less staff turnover than their competitors as well as heightened productivity and improved customer satisfaction.
- A 5% increase in employee engagement results in a 3% revenue growth the following year.
"As engagement falls, businesses can expect greater turnover, higher absenteeism, lower customer satisfaction - all factors that will significantly contribute to poor financial performance." Global culture and engagement practice leader at Aon Hewitt, Ken Oehler
5. How can employee engagement be increased?
Employee engagement is such a broad subject it can be difficult to know where to start - especially if you’re part of a large organisation with a workforce that spans multiple functions and employee types, from senior executives to part-time sales assistants. Like shoes, a good suit and false teeth, one size certainly does not fit all.
Fortunately, however, several reports have looked into the commonalities that exist between companies with higher engagement scores, which can serve as a roadmap for other companies to follow when looking to improve their employee engagement.
According to the research firm behind the Best Places To Work program, the five key factors that create higher employee engagement are:
- Set a clear, compelling direction that empowers each employee
- Engage in open and honest communication
- Maintain a focus on career growth and development
- Recognise and reward high performance
- Provide employee benefits that demonstrate a strong commitment to employee well-being
This overlaps with what Aon Hewitt regards as the five biggest opportunties for creating an engaged workplace:
- Rewards and recognition
- Clear employee value proposition
- Senior leadership
- Career opportunities
- Enabling infrastructure
"Leaders should understand that this actually reflects employees' perceptions of fairness. While organizations may not be able to make sweeping changes to compensation, it is important that they take steps to address these sentiments. The ability for leaders to have the personal sensitivity required to lead people and their organizations to growth is paramount in this intensely changing environment." The infinitely-quotable Ken Oehler of Aon Hewitt
6. So, whose responsibility is employee engagement?
If you thought that the definition of employee engagement was a tad opaque, wait til you dive into this little unchartered cave of uncertainty! If there’s a single overriding reason for employee engagement levels falling, it’s that few organisations have a concrete employee engagement strategy document that clearly outlines which department is responsible for what.
employee engagement strategy, focus and processes
- Senior executives
executive sign-off and lead by example
- Internal comms
actively communicate behaviours and activities
- People managers
carry out strategy, execute on activities, reflect behaviours and provide clear communication
adopt behaviours, take responsibility, communicate and feedback clearly
The role of HR
Due mainly to the fact that the term ‘employee engagement’ contains the word ‘employee’, the burden of delivering it usually falls to Human Resources. While the reasoning may be flawed, HR should be in the lead; but that doesn’t mean they’re responsible for the whole caboodle.
The Society for Human Resources Management has the following to say:
Hard to argue with that. So, what does “design, measurement and evaluation” mean on a day-to-day basis?
Targeting applicants who suit the culture and will find the work interesting and challenging
Choosing the correct candidates
Provide quality onboarding and orientation, then offer skill development to increase job performance and career progression
Pay-for-performance to encourage a learning culture based on incentivised behaviours
Ensure individual goals align with organisational goals, and provide feedback and recognition for accomplishments and extra contributions
The role of senior management
The role of the C-level executives and the business leaders beneath them does not end when they sign off on an employee engagement strategy. In fact, that’s when the hard work begins.
Show us an organisation that excels in employee brand advocacy, or has a reputation for incredible CSR, or of course leads the way in employee engagement, and we’ll show you a CEO who walks the walk as well as talking the talk. Even the best strategy and plans will fail to create a winning company culture unless your senior leaders live and breathe the values themselves.
The role of Internal Comms
Large organisations lose an incredible US$ 26,041 per employee per year due to the decreased productivity caused by poor communications or misunderstandings. Therefore, any employee engagement strategy or program must be clearly and consistently communicated across all platforms and this is where Internal Communications can play a significant role.
There are many ways that this can play out:
- Employees are more productive when organisational goals are transparent, easy to understand and visible.
- Employees are happier and more productive when they have extended periods of time to work on projects and they’re interrupted less by meetings, updates and emails. Internal comms can lead in using an internal social media network to send updates in a way that also encourages feedback and conversation.
- Employees who feel closer to senior management also feel more engaged with their organisation, so ensure there are plenty of opportunities to do so, from the CEO answering questions on the internal social media platform to stand up meetings with small teams and bigger town halls with the whole office. Internal-facing blog posts from senior managers are excellent for engaging employees in larger, global organisations.
- Send out a company-wide newsletter highlighting objectives, successes and updates.
The role of people managers
People managers, or middle management, is quite frankly where the rubber hits the road. Not liking your boss is one of the most common reasons for quitting a job, so it’s important that managers facilitate employee engagement for their employees.
Typically, this means adopting a communicative and trusting relationship with plenty of regular face time and the clear setting of goals and expectations. Managers need to be provided with the right tools but also need to be ambassadors and evangelists for those tools: if your company sends out regular engagement pulse surveys, managers should make sure they run through the results with their direct reports too; if there’s an internal social media network, managers should create relevant groups and avoid filling inboxes with unnecessary emails and meeting invites.
The role of employees
In a Forbes article entitled Why Employee Engagement Is Not Just The Job Of Management, business author Victor Lipman made the point that employee engagement is, well… not just the job of management!
Lipman and fellow Forbes writer Kevin Kruse suggest that an employee with a productive, constructive mindset will ask herself five daily engagement questions:
- What did I do today to improve communication with my manager and peers?
- What actions did I take today to learn and grow?
- Whom did I thank today, and who recognised me?
- Was I mindful today of our company’s long-term goals?
- Today, how engaged was I at work?
It sounds like a no-brainer, but employee engagement strategies only work if employees want to be engaged by, and to engage with, their employer.
7. Why do employee engagement strategies and programs fail?
Time for that priceless Peter Drucker quote made famous by Mark Fields, the president at Ford Motor Company, that any business blog worth its salt has to feature at least once a month: “Culture eats strategy for breakfast”. No matter how great your strategy, plan, tooling and measurements, unless you foster a culture of engagement you will never fully succeed.
“Culture eats strategy for breakfast” Peter Drucker
8. Best practices
For some entertaining and educational employee engagement examples (and the prize for alliteration goes to…), check out these bad boys:
- John Lewis: The UK retailer is owned by all its permanent staff and "Partners share in the benefits and profits of a business that puts them first."
- McDonald's: Invests in training and career development that results in high levels of staff retention in an industry that has notoriously high churn.
- Screwfix: UK hardware company holds biweekly open feedback sessions.
- Full Contact: Each year, each employee of the software firm receives US$ 7500 to go on vacation. The rules: it must be used for a vacation, they employees must totally disconnect from mobile/email etc, and they must not work while away.
- Rituals: The global cosmetics giant uses an internal communications platform to empower employees to share best practices, tips and tricks amongst themselves.
Employee engagement is hard to define and incredibly difficult to get right. It’s the responsibility of the whole organisation but needs managing and driving by a few committed departments. It can sometimes be expensive. But the rewards are vast.
Investing in employee engagement will be visible on the bottom line, on your profit sheet, and on your stock price. But, more importantly, you’ll become the type of organisation that has employees who enjoy coming to work, and applicants queuing outside the door. With customers who love to do business with you. What could be better than that?