Here on the Simon Shirley Advisors Blog, we have frequently discussed the importance of employee engagement in our more recent posts. While many HR personnel recognize the need to keep employees engaged and motivated at work, upper management may need some convincing.
To help you build a case for building employee engagement, here is our list of things your boss wants to know about employee engagement:
#1: How Does Engagement Affect Productivity?
Engaged workers put forth more discretionary effort than disengaged workers do. How much extra effort? According to research by Gallup, business or work units that are in the top 25% of their organisation in employee engagement have “21% higher productivity” than business or work units in the bottom 25%.
This improved productivity could be the result of numerous other synergistic factors associated with motivated workers, including:
- Reduced absenteeism.
- Lower turnover.
- Reduced safety incidents.
- Fewer quality incidents.
Work units that have employees who are frequently absent are effectively understaffed each time someone calls in sick or skips work unannounced. This problem is compounded when employees quit, which incurs not only reduced labour for that work unit, but extra training costs and reduced productivity as a new employee is eased into the role that was just vacated. Accidents also serve to remove employees from the workforce, either for short or long durations. In manufacturing industries, quality incidents lead to rejections, which necessitates the remaking of a product, lowering productivity.
Because motivated employees show up for work consistently, are less likely to quit, pay more attention to their work (enhancing on-the-job safety), and make the extra effort to ensure quality standards are always met, productivity is improved.
#2: What’s the Cost of Disengagement?
As reported by Gallup, in the UK, “26% [of workers] are actively disengaged.” Actively disengaged workers are those workers who are classified as working against the companies interests. They are more likely to skip work, steal from the company, and drive employees around them to do the same.
Across the Atlantic Ocean, the USA has an estimated 18% “actively disengaged” workforce, and it is costing their economy “between $450 billion to $550 billion each year in lost productivity” (roughly €467.4 billion). Note that this figure is just for the “actively disengaged” employees, and does not include the employees who are merely “disengaged” that account for 52% of the United States’ workforce.
For the year of 2013, the US’s total GDP was $16.7 trillion (about €15 trillion), according to the World Bank. Divide 550 billion by 17.6 trillion, and the 18% of actively disengaged workers in the USA cost that country 3.1% of its total GDP across all of the country’s producers.
Imagine what percentage of your company’s earnings that disengagement could be costing you when the average rate of actively disengaged employees for the UK is 26%.
#3: How Can We Drive Engagement?
After discovering the steep costs of employee disengagement, the upper management personnel in your organisation will probably want to know how your company can drive employee engagement.
To be truthful, there are many things your company can do to engage employees so that productivity will increase and turnover, absenteeism, and the like will decrease. The specific steps that your company takes will depend largely on the cause of disengagement among employees.
One thing that many employers might think of when it comes to engaging employees is employee salaries, which brings us to our next question.
#4: Do We Need to Increase Salaries?
In many cases, increasing employee salary is not the answer to employee engagement issues. Addressing obstacles to employee engagement such as disputes between managers and employees or confusion about work duties can be much more important and effective at improving employee engagement compared to simply handing out bigger paychecks.
Another strong element in driving employee engagement is the benefits scheme that your company offers. A competitive benefits package that compares favorably against industry competitors can help motivate employees to remain with the company, and even attract top talents away from competitors.
Keeping your employee benefits schemes up to date so that they are competitive with or favorable to those of your competitors can be a highly effective means of attracting and retaining talent.
While salary is important, as employees do need to be fairly compensated for their time and effort, it is not necessarily the root of the problem when it comes to disengaged employees.
#5: Can We Get a 100% Engaged Workforce?
To be honest, the answer to this question is probably no. As reported in an article on Inc.com, even companies scoring in the top 10 percent on employee surveys “register only about 38 percent of their employees as ‘fully engaged.’”
Although a 100% employee engagement rate might not be realistic, working to ensure that you have more actively engaged employees than actively disengaged ones is well worth the effort. By driving employee engagement, you can minimise the number of actively disengaged employees that detract from your company’s overall productivity.
Learn More about Driving Employee Engagement
To find out how you can drive employee engagement with better benefits, contact Simon Shirley Advisors today.