Increasingly, executives are realizing that employee engagement has a direct impact on company performance, and with it on the financial health and profitability of an organization.
But how to influence this indicator, how to stimulate employees? And is engagement so important? Natalya Shonina, the head of Connecticum, answers these questions.
The first half of 2020 was challenging to say the least, and showed how important employee engagement is to maintaining a company’s performance.
After the problems caused by the pandemic, business leaders have seen employees in some companies become more involved and others less. It depended on the culture of the company and the attitude to personnel.
Engagement has become a critical factor in business success in today’s competitive marketplace.
Its high level helps to retain talent, build customer loyalty, and improve organizational performance and value for stakeholders.
Don’t confuse engagement, loyalty, and satisfaction. Many are misled by the fact that sometimes these words are used interchangeably.
Satisfaction is when an employee is satisfied with the working conditions, he likes the company, he does not mind staying in it while everything suits him. But at the same time, the employee is not ready to make efforts to move the company forward.
Loyalty is when an employee is willing to speak positively about the company outside of it. It’s a kind of attachment, but it doesn’t involve additional mega-efforts either.
Engagement is when an employee perceives the company as his business, voices his proposals, does more than is written in his job responsibilities, fully shares the company’s values, is focused on achieving goals and tangible results.
Is engagement so important?
Most executives already understand that employee engagement has a direct impact on the financial health and profitability of an organization. According to Gallup, only 33% of employees are involved in their work. 52% say they “just show up for work”, and 17% describe themselves as “actively withdrawn”; therefore, most employers have to work hard to reach the full potential of their workforce.
To help you understand what engagement metric means for your business, I’ve prepared a few insights with visual statistics.
Employee engagement has a direct impact on bottom line.
Gallup research shows that companies with high employee engagement are 22% more profitable than companies with low levels.
Engagement contributes to fewer layoffs.
According to the New York Times, employees who feel passionate about their work are three times more likely to stay in their organizations than those who don’t.
High engagement guarantees the best experience for your customers.
According to research by Hay Group, companies with engaged employees had 89% higher customer satisfaction and 50% higher loyalty rates than peers with low engagement.
What determines engagement in 2020–2021?
We live in a world where trends change in the blink of an eye. A practice that works absolutely fine today is ineffective tomorrow. The same goes for employee engagement. Forward-looking business leaders and managers need to be constantly aware of different engagement strategies.
What to focus on?
1. Greater emphasis on work-life harmony.
Finding a balance between work and personal life is not a new concept, but it is especially relevant in today’s reality, when many companies have switched to telecommuting.
According to Flexjobs, in 2018, 75% of workers said they experience greater productivity at home. But in a pandemic, statistics are changing rapidly – people no longer want to work at home so actively, because they do not combine life and work well. 68% of employees noted that the line between working hours and rest has been completely erased. Therefore, managers need to keep their finger on the pulse in order to notice imbalances in the organization of work processes in time.
2. People-first culture: rethinking the concept of “person” in the organization.
The world is evolving digitally at an incredible rate, but people still need compassion and recognition: 92% of those surveyed believe that showing empathy is an important element of employee retention. (Businessolver). Therefore, it is necessary to pay special attention to increasing the “human” role in the organization.
3. Diversity in the workplace.
When people of different gender, age, mentality, tradition and social structure come together, they offer a fresh perspective and new ways of solving problems. If you promote a culture of diversity, it leads to a more innovative, creative and engaged workforce.
4. Health in the workplace.
Employee health is directly related to labor productivity. According to Optum, 60% of companies offer wellness programs to their employees, while only 14% have embraced a culture of health as their values.
Particular attention should be paid to the psychological state of colleagues, who are often out of balance in the VUCA world, which as a result leads to the loss of 70 million working days a year.
5. Interesting and challenging work.
Randstad’s research showed that the main reasons for leaving work are: inadequate pay (44%), limited career opportunities (43%), and lack of challenging work (30%).
This phenomenon is characteristic primarily of employees of generations X and Z – thinkers and adventurers by nature, they get bored without solving difficult problems. Therefore, for them, an interesting and difficult job is one of the main and long-term motivators.