How to Use Employee Engagement to Increase Results Pt.1
Employee engagement is arguably the most elusive aspect of human resources.
How can you tell if your employees are really engaged? And who even gets to decide what “engaged” really is, anyway?
One definition we like is the original one. The person responsible was William Khan, who wrote an article for the Academy of Management Journal titled The Psychological Conditions of Personal Engagement and Disengagement at Work in 1990. It says that employee engagement is:
“…the harnessing of organisation members’ selves to their work roles; in engagement, people employ and express themselves physically, cognitively, and emotionally during role performances.”
It’s a tricky one to achieve, no doubt about it. And so we decided to write a post on how to use employee engagement to increase your company’s results. But, soon after we’d got started, we realised there was a problem.
The thing is, even if we offer stellar, research-backed advice (which we will, of course), how do you know it’s really worth taking action?
After all, you’re busy enough already without putting a load of time and effort into changing work processes in a hope to improve results.
So, before we go into the “hows” of using employee engagement to increased results, let’s start by looking at the “why” it’s so worthwhile in the first place.
[UPDATE: There’s a lot of great research below, but, if you want to skip straight to the action points, you can check part 2 of the article out here]
The current state of disengagement
Before we begin, one important thing to note is that right now, there’s a chronic lack of employee engagement in all industries.
According to a report published by market research firm, Gallup, around, 52% of full-time workers are not involved in, enthusiastic about or committed to their work. Another 18% are actively disengaged. You may have seen this statistic around before.
If you work in a company where sales are not what they should be, people are absent just a little too often and there’s a general lacklustre sense of purpose in the office, it’s a safe bet that you’re in a majority.
Gallup is arguably the current leading authority on employee engagement metrics and research, so the problem is certainly very real. Next, what about the potential results if you can improve it?
That’s important because it means there’s serious room for improvement right now.
Sales proven to increase
When you improve your sales, you don’t just increase revenue, you instil enthusiasm into your sales team and a general sense of optimism grows in the workplace. So, will employee engagement and improve sales? You bet it will
One study recently published by researchers from Yale University (that’s a top-tier educational institution), Ahmed Khwaja and Nathan Yang looked at over 150,000 transactions made at car rental companies by over 100,000 customers.
Specially designed questions questionnaires were given to different companies to get a feel for the state of employee engagement in each. The results were then matched up against sales figures and a direct correlation between sales and engagement was found.
There are plenty more examples if you head over to Google, though a particularly interesting one to back up this point can be found here on Yahoo! News.
Improved customer care, too
In another study, it was found that businesses with strong records of employee engagement also boasted better customer care ratings than those who didn’t. That means you’re not just making more sales, but retaining more customers.
You can read about the survey by downloading the report titled Linking People Measures to Strategy from conferenceboard.ca, but you’ll need to be in Canada or have someone based there due as it’s only licensed for that country.
This research is not alone either. Another solid example is the news that Morrisons supermarket increased customer satisfaction by one percent for every 2% increase in employee engagement.
Reduce staff turnover
If you find that staff don’t tend to stick with your company for the long run, guess what? Employee engagement has been proven to help with that too.
In this report published by Development Dimensions International (DDI), one Fortune 100 company that worked on its employee engagement reduced staff turnover from around 15% down to just 4%, an unexpected bonus of the process.
Also, in the Conference Board of Canada report linked above, highly engaged employees were found to be 87% less likely to leave the company. If you want one more stat; in another one of Gallup’s surveys, this time with of almost 24,000 businesses, those in the bottom quartile for employee engagement had a 31% to 51% higher staff turnover.
Making a difference to the bottom line
Okay, so we know sales go up when employees are engaged. But, what’s the real bottom line?
Well, in the Gallup report linked above, the firm also found that companies that boast high engagement outperform their peers by a 147% in terms of market share, in addition to realising:
- 41% fewer quality defects
- 48% fewer safety incidents
- 28% less shrinkage
- 65% less turnover (low-turnover organizations)
- 25% less turnover (high-turnover organizations)
- 37% less absenteeism
You wanted to know how to use employee engagement to increase results, but you’re probably just as guilty as the rest of us when it comes to reading content and not taking action on it. Now, you can unequivocally know that it will be time well spent
In conclusion – engagement matters
You might not know it but right now, but there’s something of an employee engagement movement happening.
The companies that pick up on it quickly will keep ahead of the curve and earn the kind of valuable market share that contributes to its sustained success. Companies that fall short of the mark will start to lag behind.
If you’re an HR manager struggling to convince your CEO and other execs that this is a topic that matters, send them a copy of this article. It will prove to them that there’s a great deal of legitimate research that highlight the outcomes.
Yes, we know that you’re already super busy. And yes, improving employee engagement will mean more things to do. But we hope we’ve made a case for you to take action on next week’s post – a complete list of employee engagement best practices.