Businesses are under constant pressure to innovate, drive savings, improve margins and grow volumes. In volatile economic conditions, the challenge is heightened — even more so within the context of the global talent crunch and an acutely competitive talent environment. A committed, participative workforce is therefore a key organizational asset which makes financial sense, reaps competitive advantage and gears the bottom line. As an ongoing transformational initiative, however, it requires concerted planning and a range of actions involving all levels of an organization’s workforce. This article takes a critical look at some of the crucial steps to improving and nurturing employee engagement.
What differentiates leading companies from the pack, and sets world class, elite organizations apart still further? The blueprint lies within a dedication to achievement; an accountability which focuses departments, teams and individual employees to deliver on defined goals and outcomes.
This drive is not necessarily easy to instill, especially within the context of a global talent crunch and the erosion of key skills — which is an increasing concern among CEOs. But strong and dedicated management can, through incremental motivational incentives blended with development programs, unleash employees’ full potential and gear extra levels of participation and discretionary commitment from staff — the symbiotic crux of improved workforce engagement.
US companies with the highest proportion of engaged versus actively disengaged employees (averaging a ratio of nine to one) delivered 147 percent better on earnings per share than their direct competitors.
This is not for its own sake; the importance of an energized workforce in spurring growth, operational excellence and customer satisfaction is supported by a growing accumulation of data. Since 2010, Gallup has monitored and tracked nine performance attributes and deliverables, and — consistent across various countries and industry sectors — an improvement of between 10 and 48 percent was measured in comparing the top to bottom quartiles of almost 50 000 work teams comprising 1.4 million workers. In addition, US companies with the highest proportion of engaged versus actively disengaged employees (averaging a ratio of nine to one) delivered 147 percent better on earnings per share (EPS) than their direct competitors. The reverse also holds true: Organizations with far lower ratios (less than three to one) achieved 2 percent lower EPS. Actively disengaged employees cost American companies between US$ 450 billion and US$ 550 billion in lost productivity per year; in Germany, the estimated range is €112 billion to €138 billion.
In essence, a committed, connected workforce is a company’s key asset, and it makes financial sense to garner employees’ support and to prioritize their full engagement at the workplace. What strategies and key drivers should be put in place to achieve this?
The new rules of engagement
There is no silver bullet to reshape the engagement agenda, as it involves complex and interrelated domains such as behavioral psychology, leadership and group dynamics, and motivational techniques. As an ongoing transformational initiative, it requires concerted planning and a range of actions involving all levels of an organization’s workforce.
The following are 10 crucial action points to improve and nurture employee engagement:
1. Engagement starts at the very top, with a clear vision to inspire and motivate all staff. A famous anecdote from the 1960s is of a visit by President Kennedy to NASA’s Kennedy Space Center at Cape Canaveral. The President chatted briefly to a janitor, who proudly asserted that he was helping to put a man on the moon. Apocryphal it may be, but the story illustrates the galvanizing force stemming from a succinct, ambitious yet actionable goal.
Similarly, PricewaterhouseCoopers’ “Psychology of incentives” study confirms that employees are incentivized by more than financial remuneration: Autonomy, recognition and a sense of achievement are important elements of the composite employment proposition.
However it is revealing that, in the US as an example, almost 60 percent of employees confess to not knowing what their company stands for and what differentiates it from competitors. This represents a major barrier in the path toward an energized workforce; like the space mission, personnel at all levels want something with which to link their contribution, and company leadership should convey this purpose as a starting point in defining this beacon — the company’s North Star.
2. Get the right people into management positions. Leadership sets the tone, but it is authenticated and delivered upon by management at the localized and granular organizational levels. More importantly, there is a correlation between employees’ trust in their direct line manager and their degree of engagement within the company as a whole. Personal relationships matter, and the development and training of managers and supervisors should include connection and communication capabilities as well as the more obvious technical, delegation or tactical skills.
More importantly, there is a correlation between employees’ trust in their direct line manager and their degree of engagement within the company as a whole.
3. Instill and nurture — continuously — a culture of commitment. Ultimately, however, it’s about the work. Accountability measures should be built into the company’s business vocabulary, so that everyday actions match to identified goals. This seeds a sense of urgency and passion, setting the tone for a dynamic workplace. Executives should seize initiatives and — as a demonstration of engagement in action — lead. Similarly, capable and motivated managers should be tasked to achieve ambitious, stretched performance targets rooted in the company purpose — and then granted the autonomy to achieve these objectives.
4. Empower and develop all employees. Engagement requires companies to pay attention to their people — at all levels. And this means more than simply looking after their wellbeing at work, or providing them with a career path; the concept of developing people is a holistic one. Google, for example, facilitates both career and personal growth programs, not only for management candidates, but for all employees. By genuinely investing in people, companies have a greater likelihood of unleashing what Deloitte terms “Passionate Explorers” — those dream workers who extend the engagement paradigm into fresh territory and are motivated and inspired to generate transformative insights, innovation and competitive advantage.
If this isn’t convincing enough, consider the anecdote of the CFO who challenges his CEO by asking: “What happens if we invest in developing our people, but they leave?” To which the CEO, one with a direction for the company and a willingness to transform and reinvent, replies: “What happens if we don’t, and they stay?”
5. Adapt — or revolutionize — the recruitment approach and employment parameters. The difficulties around finding and retaining skilled talent will not ease for at least the next decade. Indeed, the 21st Century talent landscape is being ruptured by overarching global megatrends, the most fundamental of which is demographic pattern change arising from urbanization, increasing workforce mobility, and — perhaps most central in its direct influence upon the workplace — the reshaping age structure of the world’s overall population and employment pool.
Millennials currently comprise over a third of the world’s working population, and this will increase to 75 percent by 2025. This has significant implications for labour force and work-setting dynamics. Millennials are pitching the tone for a revisited talent conversation, and companies compromise their engagement approach if they do not take heed of this generation’s distinctly different attitude toward work, society and community. This has myriad practical implications, but probably the three most important revolve around recruitment philosophy, representivity (diversity), and the degree of flexibility in the workplace.
The shift in recruitment framework should embrace hiring for attitude rather than qualifications. People who seek employment that inspires passion and affords them varied work experiences — including training opportunities — are more likely to be engaged. Reconsider the company’s on-boarding program: The first few rubber-hits-the-road months may be the most important phase of an employee’s tenure, so ensure the program has current relevance, especially for Millennials, and that it immerses new recruits into the corporate culture and community.
It’s also vital to foster diversity within the company. People — employees, customers, wider stakeholders — incline toward companies that mirror society’s diversity, so this makes business sense beyond the engagement objective. Importantly, consider the gender balance within the organization: There is evidence that women at work are more engaged than men, especially in developed countries, and Facebook COO Sheryl Sandberg’s injunction for women to “lean in” can only grow as a movement; companies should be poised to embrace this philosophy.
Flexibility, as an enabler of agility, should be an option. The encouragement of a balance between personal and professional life underpins an employee’s impression of alignment between personal and corporate goals. Traditional workplace boundaries are becoming more sinuous, and remote-work opportunities — provided they do not compromise interaction as the root of collaboration — may form part of an innovative and rewarding talent paradigm. Indeed, evidence suggests that, on the whole, remote employees are more engaged; Yahoo CEO Marissa Mayer was seemingly wrong when she banned telecommuting.
Specific measures will vary based on applicability for each company, but the requisite action is that a company’s recruitment and talent management approach should evolve to match the times and the nature of the 21st Century workforce.
6. Invest in, and manage, the company’s employment brand. A compelling employee value proposition should never be assumed. Engagement requires the consistent promotion and communication of the company’s activities and successes, serving to reinforce its vision and mission. Southwest Airlines, for example, is one of America’s most admired companies and a benchmark for customer service. Each week it shares, with all 46 000 staff, stories about how employees have assisted passengers in extraordinary ways. Some of these narratives are also used in expanded marketing campaigns to nurture the consumer-facing brand. In this way, the company underscores its reputation — internally and externally — as an innovative and vibrant place to work.
7. Make communication an ongoing priority. A significant cause of negativity in the workplace is the impression of a lack of communication, either in general terms or, in particular, around change initiatives. Meaningful communication not only helps to inculcate organizational culture, but also generates a sense of teamwork and corporate community, which is important in linking day-to-day routine to broader goals.
Consistency is crucial. The Southwest Airline example illustrates the power of sharing best practices and celebrating success stories as an ongoing motivational initiative — and to convey to personnel that their company practices what it preaches.
8. Manage the uncertainty which the rapidity of technological change can cause. There is a real risk that technology can overwhelm employees, especially if it contributes to a sense of task overload. As the juggernaut of digitization and convergence permeates the work environment, an always-on connectedness can — ironically — seed disconnection from work; or, at the very least, cause distraction: Millennials, it is estimated, check their mobile phones on average 43 times per day, some as frequently as every six minutes. When aggregated with other forces such as global economic rebalancing and political uncertainty in many areas of the world, it shouldn’t come as a surprise that employees today seem increasingly disaffected or only sporadically committed — and that, globally, only 13 percent of employees may be fully engaged.
Awareness — and mitigation — of these factors will restore or properly harness technology’s role, so that it genuinely facilitates employee engagement through increased capability for innovation, networking and collaboration.
9. Measure, monitor and take action. Winston Churchill said: “However beautiful the strategy, you should occasionally look at the results.” It’s crucial to benchmark key engagement measures, but take care to track the fundamentals: Focus on a manageable band of engagement metrics which are the key drivers around business outcomes — for instance, staff turnover in mission-critical departments such as Research & Development, as opposed to the overall company. Similarly, an annual staff survey may be irrelevant; instead, techniques may be implemented for ongoing employee feedback about what really matters to them.
However beautiful the strategy, you should occasionally look at the results.– Winston Churchill
The most important aspect may be to take appropriate actions, urgently and transparently, so that employee expectations of improved engagement are actually fulfilled, and there is a clear indication that management indeed prioritizes engagement issues.
10. Upskill and enable the human resource division. Talent management is the fulcrum, the championing core, of engagement. And, as it affects the practicalities that unravel from a concerted transformational drive around engagement — pressing issues such as generational and gender balance, cutting-edge usage of recruitment methodologies and tools, and active management of the company’s employment brand — HR is best positioned to ensure synergies and a consistent, strategic alignment throughout the company.
Evidently, however, most companies are far from having a world class talent function: 65 percent of HR departments themselves acknowledge they are just adequate — or worse. This correlates closely with the predominant belief of CEOs that their talent divisions are suboptimally prepared for the challenges ahead. There is a Swedish proverb to the effect that there is no such thing as bad weather, only the wrong clothing; the looming period of economic volatility and hybrid business challenges requires proper preparedness in the shape of a re-energized and upskilled HR function.
Ultimately, a company’s success will be forged by the ambition and drive of its people
Businesses are under constant pressure to innovate, drive savings, improve margins and grow volumes. In volatile economic conditions, the challenge is heightened — even more so within the context of the global talent crunch and an acutely competitive talent environment.
But productivity and performance can be re-geared, if business leaders actively nurture a culture in which passion and purpose can flourish. Increasingly, companies are realizing the significance of unlocking further potential within their talent pools, and are grasping the reality that how their workforce is shaped and galvanized will determine the company’s future. This is the time for transformative measures in engaging with employees — overall, a company’s most important resource.
This resource has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained herein without obtaining specific professional advice. Competitive Capabilities International (CCi) does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this resource or for any decision based on it.