Employee Engagement: Why it Matters

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Employee engagement. A concept heavily studied in the field of human resources. Thousands of articles, books, and other forms of mediums have explored this topic for many years. However, as the labor market and landscape of the workforce continue to change, there has never been a more important time to have an understanding of this concept.

More importantly, as employee engagement plays a vital role in the success of an organization through one of its most important attributes, human capital, we continue to move forward in a world in which people, in general, seem less and less engaged.

What is employee engagement?

Simply put, employee engagement measures an individual’s commitment, willingness to contribute and emotional connection one has to their organization. In layman’s terms, employee engagement relates to how much skin an employee has in the game. It measures how much they care. How much they care about their company, the customers they serve, the work they do, and their fellow co-workers.

Engaged employees

Engaged employees display behaviors such as going above and beyond, being solution-oriented, and possessing a high level of optimism. For example, have you ever seen an employee who takes personal stock on a project and does everything they can to ensure it is done at a high level and completed by the deadline? What about an employee who assists a fellow co-worker on a matter that is totally outside of their scope of work? Or even an employee who checks in with others frequently to ensure they are just doing ok? As you read this paragraph, I’m sure an individual or two came to mind. These are engaged employees.

Disengaged employees

On the other end of the spectrum are employees who display behaviors such as being frequently late, possessing a negative attitude, and overall pessimistic. For example, have you ever seen an employee who typically shows up 20 minutes later than everyone else followed by doing the bare minimum? What about an employee whose favorite line is “that’s not my job”? Or even the employee who is the buzzkill in every team meeting? Again, I’m sure you have a couple of examples of disengaged employees in your head now.

At this point, the reader may be thinking to themselves “I know what employee engagement is, but we don’t have a problem with it at my company”. They might be right. After all, I don’t work for their company. However, the numbers are telling a different story.

Based on the previous Towers Watson study, only 35 percent of workers are highly engaged. Gallup’s study also echoes this sentiment with only 33 percent of workers being engaged in their jobs. So statically speaking, the general employee engagement rate is roughly one-third of the employee base. The point being that a company’s workforce probably isn’t as engaged as it believes them to be and even if a company does have a high level of employee engagement, there is always room for improvement.

Why do I need to care about employee engagement?

As previously stated, the concept of employee engagement is heavily studied. Lots of individuals ranging from scholars to executives have explored this concept and not just out of the kindness in their hearts. Employee engagement directly affects the operations and the bottom line of any organization, big or small.

Performance

Performance may be the only reason you need to care about employee engagement. After all, high-performing employees will solve many business woes. Engaged employees have passion for their work and genuinely care about the success of the organization. Individuals become more focused when they are personally invested in success. Furthermore, engaged employees strive to continuously improve. Through items such as innovation and deepening of knowledge, employee performance will naturally increase.

Consider a high-performing employee who is vital to the success of a team. Imagine that individual becomes disengaged and begins to struggle with absences or develops a negative attitude. Regardless if they are a high performer, a disengaged individual’s performance will decrease over time.

Retention

Retention is a company’s ability to maintain an active relationship with an employee. Meaning, that retention allows a company to avoid all the pitfalls associated with turnover which we’ll cover shortly. To understand why employee engagement leads to stronger retention rates, let’s consider the main reasons as to why an individual leaves a company:

  • Dislike for supervisor
  • Lack of opportunity for growth or promotions
  • Greener pastures

Many of the key contributors to employee engagement directly offset these items. For example, employees are engaged by supervisors who provide constructive feedback and listen to their needs and aspirations. Companies can create an engaged workforce by providing training and development opportunities. And lastly, engaged employees are not typically in the market for new job prospects. Even if they are, engaged employees are less likely to leave an organization to which they are committed, because again, they have too much skin in the game.

Turnover

Employee turnover is natural. Quite frankly, it is going to happen. The trick is to:

  • Understand the data
  • Understand industry and company averages to establish benchmarks
  • Monitor your data
  • Keep up to date on your organization and/or your team’s turnover to understand where it stacks up compared to established benchmarks
  • Assess
  • When there is an influx of turnover, it is time to reevaluate practices and operations to determine what changes can be made
  • Incorporate change
  • Make changes based on your assessment and circle back around to the “Monitor” step to measure results

Retention and turnover have an indirect correlation. Meaning, that as retention increases, turnover decreases. Following this logic, it is important to work on retention (hint: employee engagement) to decrease employee turnover.

“But what is so bad about turnover? You said it’s natural.” 

True, it is natural and it is going to happen. But there are healthy levels of turnover. Chances are, anyone reading this in 2022 understands the negative consequences associated with turnover. Low morale, loss of company knowledge, decrease productivity, missed deadlines, inability to grow products and services, and much more. Oh, and as far as the bottom line is concerned, employee turnover gets costly.

The cost of turnover is going to vary based on which employee is leaving, which employee is joining and all the items specific to the organization. Consider the cost associated with recruiting, onboarding and training just to get an idea. Consider the decrease in output a team has while trying to find a replacement. Think of all the paychecks a company cuts to a new employee prior to them being trained and “up to speed”. Needless to say, there are obvious costs associated with turnover such as paying someone to source candidates. But there are also hidden costs such as morale being sucked from a team, because they are working overtime for the fourth week in a row.

Attracting talent

Imagine you are in search of a new job. Chances are, it’s not just the job you care about. You would also care about the company you are looking to join. After all, the best job in the world isn’t all that great if you can’t stand the company or people you work with. In today’s labor market, candidates are much more demanding of employers. Call it generational differences, call it supply and demand, or call it a societal shift. The reality is, it doesn’t really matter. Candidates are becoming much more selective and want to work for organizations that have values that align with theirs and opportunities that fit into their lifestyle.

Candidates know which companies have happy and engaged employees. After all, it’s 2022 and it has never been easier to find out more about a company prior to even submitting an application. Engaged employees attract more engaged employees. Don’t let anyone fool you, an engaged employee base is the best tool you have for attracting talent.

How to increase employee engagement

Finally, we made it to the part of the article where I tell you how to increase employee engagement and solve all of your organizational problems. I wish it was that easy. I wish it was as simple as starting an employee group and BAM, everyone loves their company, and profits skyrocket. Unfortunately, there isn’t a magic bullet.

Each company is unique. A method for one company might not fit another.

Each person is unique. An engagement strategy that works for one employee may not have the same effect on another employee.

One strategy doesn’t cut it. Just because someone loves their work flexibility doesn’t mean they are ok working for an unethical company.

Things continue to change. Just because your employee base loved something 10 years ago doesn’t mean it resonates anymore.

You might be thinking, “I read this whole article and I don’t have anything to take away from it?” Okay, there are two generalized items I can share.

Communication

How can you possibly know what it takes for your employees to be engaged if you don’t ask them? Remember, not every employee is the same. Some may value new employee groups that align with their personal values. Others may value flexible work arrangements, praise when they do a good job, volunteer opportunities, professional development opportunities, lots of paid time off, empowerment on projects, and great benefit packages. The list goes on and on. The point being, that you are not able to understand how to increase employee engagement if you don’t ask.

When it comes to communicating with employees to understand what they need to be engaged in, don’t overthink it. Managers can ask during meetings, the HR Department can send out surveys or have suggestion boxes, and leadership can find opportunities in business plans. Communication is and will continue to be the solution to the majority of issues you are faced with on a day-to-day basis.

Responsibility

After communication takes place, you are likely going to be faced with a laundry list of items that could increase employee engagement. The responsibility of leaders, managers, and human resources is to listen, do what they can, and continue to communicate.

The company can’t do it all. You know that and employees know that. But we need to pursue some of the solutions, otherwise, it is just lip service. Furthermore, if you don’t incorporate any of the recommendations, that will decrease engagement (a double-edged sword, I know).

Finally, the communication cycle continues. Inform employees of what will be done. Tell them what items the organization will not be pursuing and most importantly, why. A little vulnerability and two-way communication go a long way when developing relationships.

Don’t let employees become a low priority

High employee engagement should be a goal of every organization. After all, human capital is vital to the success of any company. With a concept that is so large and fluid, you won’t be able to simply wave a wand and have every employee engaged. And that’s ok.

Communicate with employees and understand everyone has a level of responsibility associated with employee engagement. From the top down, we are all in this together. Get to know your people. Have conversations. Don’t sit behind closed doors.

Get the employees engaged and you’ll see what they can do for the organization.

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