The Brutal Truth about Employee Engagement
Executives say one thing and do another. That is the brutal truth about employee engagement. See these statistics that support this statement.
- 71% of executives say they are committed to employee engagement.
- 73% of employee are considering leaving their jobs.
- Globally, 85% of employees are disengaged.
- 82% of managers are ineffective. 60% of new managers fail within two years. Consequently, management disengagement is high.
- Only 45% percent of companies reported measuring engagement each year for at least the past three years.
Far too many executives do not value employee engagement. If they did, they would look at the numbers as seriously as they peruse expenses, gross margins, sales, and profit. The above stats tell another story. Instead, they like and know a few employees, but the truth is that employees are numbers that fit a job category. Executives are agenda driven and invest their time with investors, boards, top customers, and other executives. How do I know, that is where studies say they spend their time. Employee engagement is not high on their list. They count on other executives for this. However, if it is not a CEO priority, it is not a priority for anyone to do it. But labor costs are a priority. Executives hate these numbers, which tend to be around 70% of all expenses. Let us be honest. Executives want these reduced. Too bad employee engagement.
Hypothetically, let us say they did care, now what? Executives would track and review eNPS and NPS numbers religiously. These two numbers have a lucrative link. All managers and executives would be accountable for their results. The executives would communicate about it and be visible and available for feedback. They would be engaged with management and employees at all levels. Doing what? Listening and following up on issues. The company’s budget would reflect a healthy investment in employee training, learning, coaching, diversity, and well-being.
Why is Employee Engagement so Low?
Multiple issues influence employee disengagement. Check out these common reasons why employee engagement might be low. Use this as a checklist for potential problems in your organization.
- Poor Executive Leadership and Other Management Capabilities.
- Traditional leadership style vs. Servant Leadership.
- Lack of Recognition.
- Inadequate Communication.
- Failure to Address Concerns.
- Limited Career Growth Opportunities.
- Workload and Stress.
- Poor Work-Life Balance.
- Lack of Employee Development, Learning, and Training Opportunities.
- Inadequate Resources and Tools.
- Unclear Expectations.
- Lack of Trust.
- Organizational Culture Issues.
- Over Emphasis on Metrics vs. Relationships.
- Short Term Organizational Focus.
- Greater Focus on External Organizational Issues.
Improving employee engagement is a complex and challenging process that requires commitment, understanding, empathy, and ongoing effort from leadership. Executives who recognize the strategic importance of a highly engaged workforce are more likely to support and invest in initiatives that enhance employee satisfaction and commitment.
Five Examples of Companies with Top-Tier eNPS Scores?
The eNPS numbers come Comparably an online service that compares employers, brands, and salaries.
- Zoom the video conferencing platform, achieves a 94 eNPS. The company experienced significant growth during the COVID-19 pandemic, and its emphasis on employee well-being and flexibility contributed to positive employee performance and attitudes.
- Salesforce is a cloud-based software company recognized for establishing a strong company culture. The company eNPS rating of 56 demonstrates its commitment to employee success.
- HubSpot is a developer and marketer of software products for inbound marketing and sales. It is known for its employee-friendly policies and positive workplace culture with a 74 eNPS rating.
- Adobe, a multinational software company, has consistently ranked high in various employee satisfaction surveys. Their eNPS rating is 76.
- Intuit, a financial software company, is recognized for its commitment to employee development, diversity and inclusion, and a positive work environment. It reached an eNPS rating of 43.
NOTE: eNPS company scores range from -100 to +100. Company ratings above 0 are positive, 10-30 is considered good, and scores above 50 are regarded as excellent. Use an employee survey with a scale of 1-10. (1=not at all likely to recommend the company, 10=extremely likely to recommend the company). A score of 9 or 10 equals a Promoter in the organization. A score 7 or 8 equals passive employees. A 6 or below rating are detractor employees. eNPS is calculated using the following formula: eNPS = percentage of Promoters minus percentage of Detractors.
The Bottom-line Gains from High Employee Engagement
These statistics below accentuate the potential significant fiscal impact of high employee engagement on aspects of business performance. Certainly, to achieve these results requires high commitment to organizational change and an investment of time and money to improve. It requires a people-first view.
Increased Sales and Revenue Growth
- Engaged employees can lead to a 20% increase in sales, as reported by a study published in the Harvard Business Review.
- Companies with highly engaged employees experience a 10% increase in customer ratings, contributing to revenue growth.
Cost Savings through Reduced Turnover
- The cost of employee turnover can range from 16% to 213% of an employee’s salary, according to research from the Society for Human Resource Management (SHRM).
- A 5% increase in employee retention can result in a 25% to 85% reduction in recruiting and onboarding costs, according to the Corporate Leadership Council.
Enhanced Productivity and Efficiency
- Organizations with highly engaged employees are 21% more profitable, as reported by Gallup.
- Employee engagement programs can lead to a 17% increase in productivity, according to a study by the Conference Board.
Innovation and Operational Excellence
- Highly engaged teams are 30% more likely to produce innovative ideas, according to a study by Aon Hewitt.
- Improvements driven by engaged employees can result in a 10% reduction in operational costs, based on research by Towers Watson.
Decreased Absenteeism and Healthcare Costs
- Organizations with engaged employees experience a 41% reduction in absenteeism, as reported by Gallup.
- Healthier employees can lead to a 12% decrease in healthcare costs, according to a study published in the Journal of Occupational and Environmental Medicine.
Improved Safety and Reduced Accident Costs
- Engaged employees are 70% less likely to experience a safety incident, as per Gallup.
- A reduction in workplace accidents can lead to a 20% decrease in accident-related costs, based on industry averages.
Positive Impact on Shareholder Value
- Companies with high employee engagement outperform their counterparts by 202%, according to a study by Dale Carnegie Training.
- Shareholder returns for companies with engaged employees are 2.3 times higher than those without, based on data from the Kenexa High-Performance Institute.
Attraction and Retention of Top Talent
- A positive employer brand resulting from high employee engagement can increase the likelihood of attracting top talent by 50%, according to Glassdoor.
- Engaged organizations experience a 40% reduction in turnover among high-performing employees, based on research by the Corporate Leadership Council.
Seven Best Practices for Improving Employee Engagement
Here are seven best practices that organizations can implement to transform their employee engagement results. These come from multiple research sources.
Act on these strategies, measure results per survey outcomes and the above numbers. However, stay the course with grit, hard work, and determination. Persistently work to continually improve and before you know it, you will reap the benefits short-term and long-term.
Establish Strong Leadership
- Lead by Example: Leaders must live the values and behaviors they expect from their employees. Demonstrating a commitment to transparency, open communication, and a positive work culture sets the tone for the entire organization.
- Provide Vision and Purpose: Clearly communicate the organization’s vision, mission, and values. This mandates an on-going process of communication and relationship building with employees.
- Management Development: Leaders must commit to engaging management and providing opportunities for their development, coaching support, and servant leadership training. If management is engaged, employees will be engaged.
Prioritize Employee Development and Well-being
- Support Work-Life Balance: Encourage a healthy work-life balance by promoting reasonable working hours and discouraging a culture of always taking work home, weekend work, or constant overtime.
- Invest in Employee Development: Provide opportunities for training, skill development and career growth. Employees who see a path for advancement or personal growth within the organization are more likely to be engaged.
Establish a Positive Work Environment
- Promote Inclusivity and Diversity: Create an inclusive workplace that values diversity. Employees who feel respected and included are more likely to be engaged and contribute their best work.
- Encourage Team Collaboration: Foster a collaborative atmosphere where teams can work together effectively. This can stimulate innovation, problem-solving, overall job satisfaction, and well-being.
Elevate Communication Channels
- Give Regular Feedback: Establish a feedback-rich culture where employees receive regular constructive feedback on their performance. This helps in their professional growth and fosters a culture of continuous improvement. Furthermore, provide regular avenues for employees to provide feedback to executives and other management.
- Apply Various Communication Channels” Use a mix of communication approaches, such as team meetings, performance discussions, town halls, and digital platforms. These methods help ensure leaders share information positively, transparently and consistently.
Recognize and Reward Employee Efforts
- Communicate Achievements: Recognize and celebrate individual and team accomplishments. This is important as any business strategy for sales growth. You can do this through formal recognition programs, informal praise, or other rewards that demonstrate appreciation for exemplary work.
- Align Incentives with Goals: Ensure that incentive structures align with both individual, team, and organizational goals. When employees see a direct link between their efforts and rewards, it can boost productivity.
Empower Employees with Autonomy
- Encourage Decision-Making: Provide employees with opportunities to make decisions and take ownership of their work. Autonomy fosters a sense of responsibility and pride in one’s contributions.
- Trust Employees: Establish a foundation of trust between leadership and employees. These best practices support this. Trust empowers employees to voice their opinions, take risks, and to go above and beyond to contribute to the organization’s success.
Conduct Regular Employee Engagement Surveys
- Gather Feedback: Regularly solicit feedback from employees through surveys and focus groups. Use this information to identify areas for improvement and to address specific concerns raised by the workforce. Get feedback regularly throughout the year and an annual survey. A once every two years survey shows a lack commitment.
- Act on Survey Results: One of the biggest mistakes companies make when they do surveys is they fail to act and change. Consequently, you demonstrate a commitment to improvement by acting on the feedback received. Employees are more likely to stay engaged when they see that their input leads to positive changes within the organization. Establish benchmarks to measure and evaluate progress like the bottom-line areas reviewed above.
The concept of employee engagement is not a farce; rather, it is a widely recognized and researched aspect of organizational management. Employee engagement refers to the emotional commitment and dedication that employees have towards their work and their organization. Engaged employees are more motivated, productive, and invested in contributing to the success of the company.
While the concept itself is valid and well-supported, the challenge lies in effectively implementing strategies to improve and sustain employee engagement. Two-thirds of organizations struggle due to a lack of commitment, understanding, or appropriate actions to address the specific needs of their workforce. Organizations that genuinely invest in understanding and improving engagement, and that tailor their strategies to the unique needs of their workforce, are more likely to see positive results.
In summary, while the term “employee engagement” may not be a one-size-fits-all solution, it represents a valuable framework for organizations to understand and enhance the relationship between employees and their work environment. Companies that ignore this do that at their peril. In conclusion, here are eight quotes that highlight the value of superior employee engagement.
- “Employees who believe that management is concerned about them as a whole person – not just an employee – are more productive, more satisfied, more fulfilled. Satisfied employees mean satisfied customers, which leads to profitability.” – Anne M. Mulcahy
- “Your number one customers are your people. Look after employees first and then customers last.” – Ian Hutchinson
- “To win in the marketplace, you must first win in the workplace.” – Doug Conant
- “The way your employees feel is the way your customers will feel. And if your employees don’t feel valued, neither will your customers.” – Sybil F. Stershic
- “When people are financially invested, they want a return. When people are emotionally invested, they want to contribute.” – Simon Sinek
- “Employees engage with employers and brands when they’re treated as humans worthy of respect.” – Meghan M. Biro
- “The simple act of paying positive attention to people has a great deal to do with productivity.” – Tom Peters
- “Engaged employees are in the game for the sake of the game; they believe in the cause of the organization.” – Paul Marciano
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Note: Research for this post completed with ChatGPT input.