Aon Hewitt, a global talent solutions business, found that a study of more than 2,500 organisations (about 3.8 million employees) found that engagement levels rose to 60% in 2012, from 58% in 2011 and 56% in 2010.
I am surprised that there is only a 2% rise in employee engagement scores, given that in our current environment where the war on talent is increasing it becomes vital that businesses keep top performers at all costs. It is an added bonus to have happy employees as it keeps an environment healthy but in real terms, there is a fundamental link between employee engagement, customer loyalty and market share. When employee engagement increases, so does the bottom line.
So what is employee engagement really? Simply put, it is the extent to which employees commit to something or someone in the organisation and how hard they will work and how long they will stay according to that commitment. Satisfaction is not employee engagement, and vice versa. While the two certainly reinforce and complement each other,there’s value in studying both. Satisfied employees may come to work and do their jobs, but may not work at their highest capacity if they are not engaged. An employee may be highly engaged to do great work but dissatisfied with pay or management and resources, and these employees are a flight risk. Business’ needs to focus on development of both satisfaction and engagement which will result in higher customer satisfaction, reduced turnover, increased productivity and improved profits.
The survey positively shows that employee engagement improvement areas are most high in ‘effective communication’ and ‘leadership’. These two areas are vital in increasing employee engagement. Leaders must understand their people as individuals and must manage them in a way that best suits their requirements. Some employees like to work remotely due to childcare needs; others like to be in the office collaborating face-to-face with others. Every employee is unique and should be treated as such. Clear communication and relationship building also ensures that people understand what is expected of them and details their performance expectations around any reward schemes associated with performance. When this is all communicated effectively, employees are happy as their expectations are managed.
One concern from the survey is the drop off in the area of ‘customers’ (-2 points). The customer relationship is vital to business. In keeping customers happy, you maintain your business pipeline. I am also concerned that only 55% of employees feel that their performance is enabled, explaining that performance management enables people to deliver their best; keep your customers happy and remain happy themselves in the understanding that they have what they need to perform.
Information must be clear to them, they must understand their goals and they must also be aware of their succession capabilities, should they be interested in growing in the business. Leaders must improve in this area and enable their businesses to allow people to perform optimally.
Work over the past 30 years, researching more than 17 million people, concludes that companies with engaged staff have 30% higher customer satisfaction, 22% higher productivity and up to 27% higher profits. In addition, the Gallup study also proves that organisations with actively engaged employees boast 3.9 times the earnings per share growth rate in their industry. The world’s top-performing organisations understand that employee engagement is a force that drives performance outcomes. In the best organisations, engagement is more than a human resources initiative – it’s a strategic foundation for the way they do business.
While there is a huge drive behind technology, social collaboration and cloud being the future of work, it’s important to understand that technology is simply an enabler. The future isn’t digital, it’s people and employee engagement remains one of the most critical areas that will define the success of an organisation in the future.
Natalie Maroun is the Chief Strategist and Senior Partner of LRMG Performance Agency.