A shift in corporate priorities has companies now engaging their workforce in ways that go beyond a paycheck. Learn how measuring engagement is your best option for driving performance and growth.
Today’s employees expect more than a paycheck. They expect to be engaged in their career, and meeting those expectations as an employer is no longer optional. What you may not realize, however, is the profound impact employee engagement can have on your business and bottom line. In fact, companies with engaged employees report 2.5x more revenue than competitors.
For an employee to be engaged, they must be motivated to work hard towards a common goal that is in line with the company’s vision and committed to the values their organization represents. Engaged employees must have a clear view and understanding of the objectives of the work they are doing.
When everything is said and done, understanding the overall effect employee engagement has to your company boils down to two very important questions: Why does it matter and how do I implement it?
Why does employee engagement matter?
If companies can take one thing away from this post, it would be this: Increased employee engagement leads to higher earnings per share. Understanding that the level of engagement each employee has with their job directly impacts their ability to perform is crucial to your company’s financial health.
In fact, according to a Gallup survey, when comparing engagement levels for the top 25% of their database to the bottom 25%, the more engaged groups showed the following improvements:
- 22% in profitability
- 21% in productivity
- 10% in customer ratings
- 41% in quality defects
- 37% in absenteeism
- 28% in shrinkage
In today’s competitive corporate landscape, companies are constantly having to evolve business strategies and goals to align with industry standards. This means that everyone they employ needs to be on-board with that constant state of change and be catalysts of new ideas.
The bottom line is: Employees who are engaged and motivated in their careers are the ones who are not only generating ‘the million-dollar ideas’ in your organization, but also the ones who are making critical decisions to drive your business forward.
By intentionally focusing on measuring and managing employee engagement, companies can gain a competitive advantage that will keep them moving forward. Willis Towers Watson reports that companies with high and sustainable levels of engagement have operating margins up to 3x higher than companies with low or unsustainable levels of engagement. Concentrating on increasing employee engagement can not only impact your pipeline and revenue, but also contribute to your company’s overall health and growth potential.
How do I increase employee engagement?
Researchers are finding that today’s most competitive companies are the ones that invest in employee engagement. But what does this look like in practice?
1. Listen to your employees
It’s as easy as it sounds. Research shows that happy employees are reported to be 12% more productive than their less-than-enthused counterparts. Engaging your employees in conversation and providing positive feedback is a quick and simple way to make your employees feel like their presence is known and that you care about them as an individual.
Example: Encourage sales managers to set time aside to have one-on-one’s with your employees to get to know them on both a professional and personal level. Ask if they’re happy in their current position, understand where they are now and where they want to be, or see if they have hobbies or passions outside of work that they enjoy.
2. Benchmark incentive pay
Every successful business knows that its primary goal is to drive revenue and growth. Fortunately, every leader knows that the key to that goal is hiring and retaining top-performing employees. Unfortunately, most companies try to combine the previous two statements by paying their employees as little as they can to maximize their profits. That’s why companies need to make sure they benchmark incentives and pay at competitive rates to make sure they are attracting and keeping top performers. Problems with lack of engagement and motivation often result when employees feel unpaid and underappreciated.
Example: Compensate your employees based on their market value. It costs more money to replace them than it does to invest in them. Pay your employees well because if you don’t, your competition will!
3. When you say you respect their work-life balance, mean it
Employees can often feel like work is taking over other aspects of their life. Understanding that separation between work and life is the first step to minimizing stress, burnout and overall unhappiness. According to a recent study by the Bureau of Labor Statistics, people spend an average of 8.5 hours per day working. When you take into account other needs-based activities, like sleeping and eating, you see that the personal time that is left over is minimal.
Example: If they need to go to the doctor, make sure they don't feel employer guilt for having to take time off. If they want to go on vacation to relax and recharge, approve that PTO! Make sure you, as an employer, place emphasis on respecting your employee’s life outside of work.
4. Define potential career paths
When you first interviewed your employee, you saw the potential in their ability to help your company grow. But employees don’t only stay for company growth, they want to be able to see their career trajectory from day one and see their own potential growth reflected in their job motivations. For as much investment they make in your company, they expect that effort invested back into them.
If you don’t, chances are your employees will jump ship. A 2015 survey by Gallup found that when 93% of Americans advanced in their careers, it was by taking a job at another company. Just 7% took on new opportunities within their current organizations.
Example: When you present new opportunities or extra workloads, it’s important to reiterate to employees that you’re not simply giving extra work out of them without any recognition or reward. As employees gain experience, it’s also important to consider career advancements, such as new titles, raises, and bonuses.
5. Work on company culture
It’s important to note that company culture isn't just one thing. It includes a variety of elements such as work environment, professional relationships, company mission, values, ethics, expectations, and goals. According to a HAYS research survey, almost half of individuals looking for a new job state lack of company culture as one of the main reasons for wanting to leave.
Example: Make sure you are in tune with the current needs of the workforce and incorporate that into your own corporate structure. According to Fortune, employees now desire flexible work schedules and seek jobs with companies that they think are invigorating and inspiring.
6. Drive the right behaviors
Regardless of role, compensation motivates behavior. Commissions motivate sales teams, but company-wide bonuses can incentivize employees outside of the sales department. Employee incentives, like sales compensation plans or bonuses, work because they motivate employees and drive specific behaviors.
Example: If you want to keep your organization on track to hit goals, think about implementing an incentive plan to not only motivate but also attract and retain top sales talent.
High Employee Engagement = Success
The numbers are in, and they clearly point to the benefits of implementing engagement practices among employees. At the end of the day, you need to engage your employees, get to know them, and understand what they want to get out of this job to maintain high performance.
As a leader, you can no longer assume that today’s workers only care about their salary, and given the amount of time spent working, it's important for both the employee and the employer to make sure there's a good fit.
After taking all of this in, what is your current cost of employee disengagement?
