What is Employee Engagement Anyway?

Employee Engagement Week 1

"To win in the marketplace you must first win in the workplace." Doug Conant, former CEO of Campbell’s Soup

Doug should know. When he took over as CEO of Campbell’s the Gallup organization told him their customer satisfaction scores were the worst they had measured in a Fortune 500 company...ever. The company results backed it up. Campbell’s had lost 50% of their market share in the previous two years. His story of turning around the company started with the people. It always does.

If you take a minute to discuss people issues with any CEO or human resource executive in North America chances are good the conversation will turn to employee engagement, or a lack thereof.

The stats are clear:

  • According to Gallup data only 34% of our employees are engaged at work.
  • Towers Watson says employees are struggling and 63% of them are not fully engaged in their work.
  • Turnover is up in every industry and region.
  • This lack of engagement costs companies more than $500 billion a year in productivity, turnover, and other associated costs.
  • According to Bersin and Associates in the U.S. alone companies are spending $750 million annually to improve engagement, but we have barely moved the needle. That spend is expected to double over the next few years. In some cases we may simply be doubling down on a bad bet.

For companies who have higher employee engagement the payoff is clear. They get better results no matter what measurement you use - innovation, quality, customer satisfaction, profitability, etc. A Towers Perrin study showed companies with engaged workers had a 6% higher net profit margin.

Conscious Capitalism firms (think Southwest Airlines, Whole Foods, The Container Store and others), known for high employee engagement, delivered an Average Rate of Return of 21% over a 15 year period versus 6.5% for the Standard and Poor’s 500.

Even defining employee engagement can be a challenge. People mix it up with employee satisfaction (or happiness). We like Kevin Kruse’s definition in Forbes. He said “employee engagement is the emotional commitment our employees have to the organization and it’s goals.”

 We know it when we see it, right? Engaged employees exert that extra effort - discretionary effort if you will. They stay late without being asked because the job needed it. They own the quality issues and they help make your product or service better. They solve customers problems by going that extra mile. They get it. They care.

We know employee engagement matters. Not just in profits, but in building the kind of workplace that most entrepreneurs want - a place where people matter, feel cared for, and stay.

We believe driving better engagement is possible, and essential in a world where talent is becoming increasingly scarce. From the way we hire and onboard to the way we manage there are things we can do to improve that discretionary effort.

This year our annual 52 questions are designed to be questions you can ask yourself and your managers about building engagement in your workplace. In our weekly blog we’ll explore these questions as a way to help discover the best practices you need to develop engagement in your organization.

Join us for this journey to higher engagement! Happy New Year!

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