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Several reports indicate that employees are becoming more distracted, anxious or dissatisfied about their work, and that many are looking to change jobs as the economy improves. Meanwhile, these disengaged employees are costing their employers. In the wake of cost-cutting and layoffs, it might seem natural to relegate workers’ lethargy to the bottom of the priorities list. However, even with the unemployment situation being what it is, engaging and retaining employees should be a top concern.
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Mercer’s Human Capital consulting practice recently identified five strategic areas upon which organizations should focus in 2010. Sitting in the No. 1 spot: “Meeting the new challenge of employee engagement.”
“As a consequence of the current economic challenges, many employees are distracted, anxious or disengaged, or believe that they have stalled in their careers,” Mercer’s Human Capital Planning 2010: Resetting the Talent and Rewards Agenda said.
Sound familiar? It should. While Gallup’s 2009 Worker Engagement Study found that engagement remained essentially level, Americans of all ages and incomes seem to be growing increasingly unhappy with their work, according to a January report published by The Conference Board. Several other recent reports indicate workers are growing disengaged in their work and are looking to change jobs as the economy improves over the next year.
In the meantime, these disengaged employees are costing their employers.
The Conference Board has defined employee engagement as “a heightened emotional connection that an employee feels for his or her organization, that influences him or her to exert greater discretionary effort to his or her work.” For employers, there is a clear link between engagement and profitability, which makes engagement a more urgent issue now than it was in prosperous times.
According to recent research, highly engaged employees miss fewer days of work, are more likely to be top performers and tend to be more resilient to, and supportive of, organizational changes. Companies that engage and enable their employees have also been found to outperform companies with low levels of engagement in revenue growth, profitability, customer satisfaction scores and, of course, turnover rates.
With few pay increases or bonuses, some companies are looking to put greater focus on low-cost incentives such as praise, thank-you notes and gift cards. (For more on this, see: Can’t Give Bonuses? Try Recognition) Yet, according to 1to1 Media’s 2009 Employee Engagement (free registration required), 20 percent of respondents’ companies still don’t consider creating and nurturing employee engagement to be important. In fact, 4 percent of those firms consider it completely unimportant.
“Employers today have a daunting task: focusing their limited resources toward reengaging key talent in ways that will drive performance and profits,” Mercer’s report made clear.
To that end, Towers Watson’s global research on the factors that increase employee engagement has shown that high engagement results from an array of organizational elements, but two have a particularly strong influence: Senior management’s sincere interest in employee well-being; and the opportunity an employee has for personal development of skills and abilities.
Or, as Mercer advises: “Pay attention to both the ‘organisation journey’ and the ‘employee journey’ — not just ‘what’s in it for the business’ but also ‘what’s in it for employees?’”
But how do you create and sustain employee engagement in your workforce?
1to1 Media has found communication and trust to be among the key elements for maximizing employee engagement.
According to the 2009 Employee Engagement survey, the most important way respondents’ companies seek to improve employee engagement is through trustworthiness, cited by 47 percent of respondents. “Trust and respect in equal measure are the keys to building and sustaining a workforce that is significantly engaged in high performance, particularly as it affects customers,” one respondent said.
Following “trust” are the following: demonstrating a focus on the customer (40 percent); communicating expectations clearly (25 percent); involving senior management in improving employee engagement (24 percent); maintaining a clear strategy (23 percent); and recognizing successes (22 percent).
1to1 Media’s survey also determined that “open, honest communication” is the clear leader in terms of what respondents personally consider to be the most important factor for fostering employee engagement. Rewards and recognition follow; these include “not just bonuses or incentives, but also actions like having managers take the time to personally thank their staff for a job well done.”
Next in importance is “involvement” — a sense of ownership among employees in the decision-making processes. Respondents also said that management must lead by example and model the behaviors expected from employees. Equally important is having a corporate culture that has employee engagement at its core.
To the point of driving engagement higher and measuring its impact on employees, Workforce Management last month offered the following recommendations from Right Management (subscription required):
Measure engagement levels. “The most accurate way to achieve this is through a quantitative survey supported by qualitative interviews and focus groups. Surveys need to be tailored to your organization, your strategy, your values and your language.”
Determine the drivers of engagement. “The answer to what drives employee engagement will be different for each organization. Every organization should undertake research that incorporates robust design and analysis to determine its drivers or levers of engagement.”
Link the results to business outcomes. “[M]odel the exact financial impact that engagement has on productivity, customer service, retention, absenteeism and financial results [...] by creating and analyzing a unified database containing productivity data, customer data, HR data and financial data for similar groups (e.g., stores, teams, locations).”
Continue to track engagement levels. “Measuring engagement is not a one-time event. Organizations are continually evolving and changing; therefore, you need to take a ‘pulse’ to measure engagement and track the success of strategies you have put in place to increase engagement and business performance.”
“Today’s dramatically — perhaps permanently — changed business environment offers organizations the perfect opportunity to reset the baseline — taking a fresh look at the talent they have, the talent they need, and how to engage and reward their talent in the pursuit of organizational goals,” according to Mercer.
Related
Still Employed…Still Dissatisfied
Can’t Give Bonuses? Try Recognition
Making Disengaged Employees Feel Valued
Are Managers Communicating Enough?
Resources
Human Capital Planning 2010: Resetting the Talent and Rewards Agenda
Mercer, Fall 2009
Work Environment Index
Gallup and Healthways, 2010
Despite the Downturn, Employees Remain Engaged
by Jennifer Robison
Gallup Management Journal, Jan. 14, 2010
I Can’t Get No…Job Satisfaction, That Is
by John M. Gibbons
The Conference Board, January 2010
Employment Dynamics and Growth Expectations Report
Robert Half International and CareerBuilder.com, Aug. 25, 2009
Nearly a Quarter of Employers Rate Their Organization’s Employee Morale as Low…
CareerBuilder.com, Nov. 17, 2009
Employee Discontent Expected to Reach Crisis Level Next Year
Right Management (Manpower), Nov. 17, 2009
Despite Competitive Labor Market, One-in-Five Workers Plan to Change Jobs in 2010…
CareerBuilder.com, Jan. 7, 2010
Employee Engagement A Review of Current Research and Its Implications
by John Gibbons
The Conference Board, November 2006
The Economics of Engagement
by Allan Schweyer
Human Capital Institute, June 2009
Watson Wyatt Identifies Steps to Keep Employees Engaged, Productive in a Downturn
Towers Watson (formerly Watson Wyatt), March 31, 2009
Tough Decisions in a Downturn Don’t Have to Lead to Disengaged Employees
Hay Group Insight, Aug. 13, 2009
Rewards for Extra Work Come Cheap in Lean Times
by Dana Mattioli
The Wall Street Journal, Jan. 4, 2010
The Secrets to Engaging and Retaining Employees (registration required)
by Elizabeth Glagowski
1to1 Media, Dec. 7, 200
‘Turbocharging’ Employee Engagement: The Power of Recognition From Managers – Part 1
Towers Watson (formerly Towers Perrin), originally published April 2009, republished December 2009
‘Turbocharging’ Employee Engagement: The Power of Recognition From Managers – Part 2
Towers Watson (formerly Towers Perrin), originally published May 2009, republished December 2009
Mercer Predicts Top Human Capital Trends for 2010
Mercer, Nov. 23, 2009
Dear Workforce: What Is a Reasonable Level for Employee Engagement? (registration required)
by Deborah Schroeder-Saulnier
Workforce Management / Right Management, February 2010
The Open Secret To Motivating Employees
Forbes.com / Knowledge@Wharton, Feb. 18, 2010
5 Ways to Motivate Without Money
by Steve Strauss
American Express OPEN Forum, Feb. 17, 2010
How to Bolster Employees’ Confidence
by Steve Crabtree
Gallup Management Journal, Feb. 25, 2010
Incentives Vs. Recognition: How Do You Get Your Workers Engaged Again?
by Eric Mosley
Forbes.com, Nov. 19, 2009
Businesses Sailing into a ‘Perfect Storm’ for Talent as Global Economy Improves
StepStone Solutions, March 4, 2010
Six Ways to Measure the ROI of Employee Engagement
by Mark Harbeke
Winning Workplaces, June 18, 2009
The ROI of Employee Engagement
by Mark Hirschfeld
MarkHirschfeld.Wordpress.com, Feb. 5, 2009
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If larger companies are concerned about losing employees, then I think the CEOs need to take a hard look at the differences between their salaries.
Employees cost a lot of money to train and those that have worked for companies for more than 5 years have the experience/knowledge you can not train into a new employee.
The cost of losing established, well-trained employees is worth a lot more than a raise. If your factor in the mistakes made by new employees, loss of production and possible loss of customers.
The greed of upper management and of the CEOs is costing their businesses far more than they realize. I think these gentlemen need to take a hard look at taking big pay cuts and passing the savings onto their lower paid workers.
On top of this, they should be doing things to liven the employees up, such as company-sponsored skeet-shooting leagues, learn to shoot classes, paid hunting trips, fishing trips and other recreational activities.
We do it for our employees and pay them more and us less.
No doubt about it….management needs to find a way to nurture employees who, for any number of reasons, are becoming disenchanted or disenfranchised with their jobs. But should the main source of this story, Mercer, be taken seriously when they apparently can’t spell “organizational journey”? Perhaps an investment in spell checker might be the first step when starting THEIR journey? :)
PS: But I guess the fact I have the time to even write this is testament to their claim!
PPS: Hey Cliff….interesting selections of company sponsored extra-curricula activities: is the theme meant to promote firearms accuracy when they return to the jobs at the post office?