The State of Employee Engagement

HI

Human Intelligent (HI) Workplace
Helping Leaders Help Themselves

April 12, 2015

The workforce of today has different expectations. They are looking for fair rewards, flexibility and engaging work. In essence they are looking to be treated as adults.

Allison Maitland & Peter Thomson – Future Work

Employee Engagement

This has become a term front and center in organizations with bottom line implications in recent times. It is estimated that 11% of employees are highly engaged, while 13% are not, and 76% are sitting on the fence and up for grabs. It is estimated that employee disengagement costs organizations an estimated $450-$550 billion a year. In a recent organizational survey 90% cited employee engagement being critical to their success yet 75% indicated that they did not have a strategy to address this organizational human capital issue.

When organizations address this positively you get some of the following as demonstrated in a recent Gallup survey of over 1 million employees. It found that those in the top 25% of engaged workers have some of the following characteristics: 65% lower turnover, 48% fewer safety incidents, 37% lower absenteeism, 21% higher productivity, and 10% higher customer metrics among others including better health.

In spite of this, some of the human capital strategies that are continually used by organizations are to rank and stake employees one against the other and to continue layoffs. Layoffs, which have shown over time to be bad for business. A study of 141 layoff announcements between 1979-1997 found negative stock returns. An additional 1445 organizational layoff efforts between 1990 and 1998 also negatively impacted stock-market returns. In another study of 210 organizations, a variety of performance measures were followed only to find that while the initial year after layoffs was positive it was not the following year. In addition it has been found that 88% of downsizing organizations had a negative impact on morale.

Some benefits found are that during the difficult times, a highly engaged workforce positions the organization for success. In addition, in these organizations externally changing factors have less of an impact on them. In organizations with a highly engaged workforce an interesting positive cycle occurs. In good times engagement enables success and profits. In difficult times an engaged workforce and environment drives up profits.

Another way to look at this is that engagement can be interpreted as “a way of being” for an organization. We still have a long way for organizations to embrace and proactively integrate engagement into the fabric of their business practices and culture. As an example 50% of European multi-national organizations address engagement. Yet it is increasing in importance and visibility. A few things to remember, in order to be proactive in this area it needs to be driven from the top of the organization as a business and strategic imperative.

With this backdrop and increasingly supporting research; it only reinforces the crucial role that supervisors will play in enabling employee engagement. Effective leader-employee relationship regardless of a virtual or co-located set up can lead to highly satisfied and engaged workers and workforce, which in turn leads to improved customer service and loyalty which in turn translates to a positive bottom line.

Organizations in the 21st century will need to transition from top-down hierarchies to nimble organizations that can adapt and change quickly with open and transparent communications. This way everyone is in the know. They will or should consider evolving from the mindset of just competing for market share to creating new markets. There are plenty of organizations that exist today providing services that did not exist before the year 2000. Organizations like Netflix, Pandora, Amazon, Uber, Facebook, and others.

In order to maximize their efforts on employee engagement they will need to evolve from an organization-centric mentality to one of people-centric. To evolve from a command and control to one of trust-based and from hierarchy to networks and relationships. These changes and paradigm shifts will help those organizations that truly want to reinvent themselves and create an engaging workplace and great place to work.

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