Why is employee engagement important?
The good news is with greater employee engagement comes an increase in profitability. According to Gallup, highly engaged employees result in a 23% increase in profitability. It’s a no-brainer. When employees are engaged, they want the business they work for to do well. And therefore, they do their jobs to the very best of their ability.
To this end, you’d think it would be obvious to all businesses that their people would be key to their success. But when you consider Gallup’s global survey of the workforce, which highlights 85% of the workforce are not engaged, then clearly, there is a very significant disparity in how we treat our people.
More benefits of employee engagement
One of the most successful leaders of all time, Jack Welch, the former CEO of GE, understood the long-term benefits of employee engagement when he said:
"There are only three measurements that tell you nearly everything you need to know about your organisation's overall performance: employee engagement, customer satisfaction, and cash flow. It goes without saying that no company, small or large, can win over the long run without energised employees who believe in the mission and understand how to achieve it."
It's obvious really. Engaged employees = Less employee churn = Better performance in what they do = Better levels of service and experience for customers = Better sales performance for the company = An increase in customer lifetime value = Customer advocacy and existing customers helping you find new customers.
How to improve employee engagement
Creating an effective plan to put employee engagement into action is essential for fostering a motivated and productive workforce. Here's a step-by-step guide to help you implement an employee engagement strategy:
Step 1: Situation Analysis - Assess the Current State of Employee Engagement
Before you can improve employee engagement, you need to understand the current situation. You can do this through various activities, including the following:
- Conducting surveys
- Focus groups
- One-to-one interviews with employees
All with the aim of gathering feedback and identifying areas that need improvement.
It’s also helpful to benchmark how your colleagues feel currently, and you can use tools such as employee engagement surveys to quantify the level of engagement within your organisation. You can also provide anonymous options for employee feedback in order to capture a real sense of how your colleagues feel.
Step 2: Set Clear Objectives and Goals for improving employee engagement
Define specific and measurable objectives for your employee engagement initiatives. For example:
- We aim to increase overall employee engagement scores by 15% within the next year by empowering our colleagues to make decisions for customers without the need for approval (you can put some guardrails in if necessary).
- We will reduce staff turnover and churn rates by 10% over the next two quarters.
- We will drive a 20% increase in ENPS over the next 12 months (Employee Net Promote Score).
- We will enhance communication and collaboration among teams by implementing new tools or processes.
- We will implement a reverse mentoring program as Heineken has done below, in order to upskill our senior management and make them closer to our younger colleagues and customers.
Case study:
Heineken conducted a survey among their senior leadership team, revealing that a remarkable 86% of these executives expressed a strong desire to establish connections with junior employees, who are perceived as the future of the company. Their motivation was rooted in the aspiration to acquire fresh skills and broaden their experiences. In response to this feedback, Heineken initiated a groundbreaking reverse mentoring program, in which junior employees assumed the role of mentors for senior leaders and executives. The central objective of this program was to furnish the leadership with a contemporary and contextually relevant perspective on the future of work and potential avenues for growth.
Yet, Heineken's commitment to progress extended beyond this point. They also recognised the ethical and economic advantages of fostering greater diversity and inclusivity within their organisation. In light of this realisation, they undertook the creation and execution of a comprehensive global diversity and inclusion program. This initiative was meticulously designed to empower their colleagues, encouraging them to wholeheartedly embrace inclusion and celebrate the diversity inherent in the countries where the company operates.
Crucially, the development of this program was strategically aligned with Maslow's hierarchy of needs, thoughtfully catering to the fundamental aspects of human well-being. It was crafted to address the physiological, belonging, self-actualisation, self-esteem, and safety needs of Heineken's workforce, ensuring their holistic well-being and growth.
Step 3: Create a Cross-Functional Employee Engagement Team
Employee engagement will always be more effective when the approach to improving it has input from across the business. Therefore, you should assemble a dedicated, cross-functional team with responsibility for driving employee engagement initiatives. This team should include representatives from HR and learning and development, leadership, and various departments across the organisation. Assign roles and responsibilities to team members based on their expertise.
It will also prove to be more effective if you ensure that this team is diverse in its make-up and represents all the communities within the business.
Microsoft focuses on creating a diverse and inclusive workplace. They have programs like "LEAP" (Leading with Empathy and Allyship Program) and invest heavily in employee training and development, fostering a culture of continuous learning.
Step 4: Develop an Employee Engagement Action Plan
You need to create a plan to successfully implement your employee engagement objectives.
Based on your assessment and objectives outlined above, create a comprehensive action plan.
You need to consider the following components:
A. Communication Strategy:
- Establish clear and transparent communication channels.
- Develop an internal communication plan to keep employees informed about company news, updates, and initiatives.
- Create a clear cadence for this and ensure it is frequent enough to keep your colleagues engaged.
B. Recognition and Rewards Programs:
- Implement an employee recognition program that acknowledges and rewards outstanding performance.
- Offer both monetary and non-monetary incentives, such as bonuses, promotions, and public recognition.
- You can also encourage and reward colleagues for new ideas that help the business to save costs or drive top line sales.
Pret A Manger has done this for many years and rewarded their colleagues for ideas for new menu items or other aspects that have improved the business in some capacity.
C. Learning and Development:
Invest in employee training and development programs to help employees acquire new skills and advance their careers.
Provide opportunities for skill-building, mentorship, and career growth.
There is nothing that will tell your colleagues that you value them more, and that you want them to work for you for many years to come, than providing opportunities for them to be upskilled and learn new things.
D. Work-Life Balance:
Encourage work-life balance by promoting flexible work arrangements.
Offer benefits like remote work options, flexible hours, and wellness programs.
Hyatt Hotels empower their housekeepers to choose to leave early once they’ve cleaned their allocation of rooms or they can stay, clean more, and earn more money in the process.
They also give primary care givers eight weeks of paid leave.
E. Employee Feedback Mechanisms:
Establish regular feedback channels, such as monthly or quarterly pulse surveys, to collect input from employees. It’s vital that you keep a close eye on how your colleagues are feeling.
Act on feedback promptly and communicate the changes made based on employee suggestions.
Step 5: Implement and Measure:
Execute your employee engagement initiatives according to your action plan. Ensure that you provide ongoing support and resources to your employee engagement team. Regularly measure progress toward your defined objectives using relevant key performance indicators (KPIs) such as:
- Employee engagement survey results
- Staff turnover rates
- Productivity metrics
- Employee satisfaction scores
- Attendance records
It’s also worthwhile doing social listening and keeping an eye on what your colleagues are saying in other channels such as Glass Door.
Step 6: Adjust and Improve:
Employee engagement is a moving target. You can’t create a plan and expect it to be continuously relevant. Therefore, based on the data and feedback collected, continuously refine and adjust your employee engagement initiatives. Address any issues or roadblocks that arise, and celebrate successes along the way.
Be agile in your approach, and be open to making changes when necessary.
Step 7: Communicate and Celebrate Success:
Share the progress and positive outcomes of your employee engagement efforts with your workforce. Celebrate milestones and achievements and ensure that employees know their contributions are valued.
Step 8: Maintain Long-Term Engagement
As highlighted above, employee engagement is an ongoing process, not a one-time project. Therefore, you need to continue to invest in your workforce, adapt to changing needs and expectations, and make employee engagement a part of your company culture.
And remember that no one-size fits all. You need to engage at an individual level to tailor your approach to the motivations, aspirations and capabilities of each individual in your business.
By following this plan, you can put employee engagement into action and create a workplace where employees are motivated, satisfied, and committed to the success of your organisation.
Let’s not forget that mental health is a very significant issue that needs addressing.
According to the Retail Trust, 80% of retail workers reported a deterioration in their wellbeing in the past year, and 50% of managers have noticed an increase in absence due to mental health issues in the past 12 months.
To some extent, this is borne out of a lack of a meaningful engagement strategy. While 90% of leaders believe an engagement strategy impacts the success of the business, barely 25% of businesses have a strategy for this.
Contrast this with Google, which is famous for its unique work culture. They offer employees benefits like free meals, on-site healthcare, and opportunities to work on innovative projects during "20% time." They also emphasise work-life balance and provide various wellness and fitness programs.
There are so many commercial reasons for focusing on employee engagement.
Forrester research reports that organisations with engaged employees have 81% higher customer satisfaction. This can also help lower your employee turnover rates by 50%.
Not only are engaged employees 4.5x more likely to do their best work, but organisations that prioritise highly engaged employees also have customer loyalty rates 233% higher than those that don’t.
On average, engaged teams also have 10% higher customer ratings than their disengaged counterparts, and sales are increased by 18%.
And, of course, all of this has a significant impact upon the commercial performance of the business.
If you would like to know more ways to measure the success of your employee engagement and more you can download my free ebook The 10 New ROIs or join my Mini MBA in Customer Centricity. The next cohort starts w/c 22nd January 2024.