Written by Rick DeRose
Employee engagement — the emotional commitment an employee has to an organization — is imperative to accelerate performance in today’s competitive workforce environment.
Recent research proves it heightens profitability, productivity, retention, customer experiences, and other critical KPIs. Business leaders in all industries are consequently exploring new strategies to deepen engagement and employee satisfaction levels, in many instances fundamentally changing how they operate.
A holistic view of employee engagement requires both operational innovation and a common mindset across the organization. When executive teams are passionate, managers are more likely to be engaged, in turn influencing all employees. And yet, while 90% of executives understand the importance of engagement, fewer than 50% have strategies in place to address it.
Does strong engagement lift the bottom line?
There is substantial data available on the transformational effects of engagement. Business units in the top quartile in employee engagement outperform bottom-quartile units by 21% in profitability, notes Gallup. In sharp contrast, actively disengaged employees are pricey and can stall growth, costing U.S. companies between $450 and $550 billion per year.
Employee engagement success elevates results across many facets of the enterprise.
Hidden costs of unengaged talent
On the flip side, disengagement can have a detrimental effect on employee turnover. As many as 50% of disengaged employees would consider leaving their current position versus 25% of highly engaged employees. The compounded cost for replacing skilled talent can weigh considerably on the bottom line, with a price tag that could climb upwards of 200% for senior executives.
To no surprise, elevating the employee experience has become a common theme inside the C-suite. Our clients are seeking creative ways to elongate the tenure of their best performers, and many already have sophisticated tools to measure employee ROI.
For example, one of our professional services clients found themselves in this tough position as competition for talent intensified. They knew their break-even point on hires — when an employee’s contributions surpass their hiring cost — was three years. Many were leaving before then. To get top players to stay, one initiative we helped roll out with the leadership and human resources team was a more formal integration program. We were able to drive engagement through consistent Q&A sessions with the hired executive, relationship building, and mentoring. When we started, only 50% of their hires were staying beyond two years. We increased that to 90%.
Additionally, the creative solutions of the future are not only sitting inside HR departments. Newly hired CIOs are also being tasked with improving the employee experience through cutting-edge technology solutions, collaboration, and productivity tools.
Engagement boosts productivity
This brings me to my next point: Highly engaged employees are 38% more productive. Aon Hewitt estimates that for every 1% increase in employee engagement, organizations can expect to see an additional 0.6% growth in sales. And based on its research, Banfield Pet Hospital notes that 67% of employees believe a pet-friendly workplace increases productivity. Go, Fido!
Bolstering engagement and productivity starts with a simple step — clearly communicating the organization’s mission and how each team member’s efforts contribute to it. According to HubSpot, 50% of employees note a positive impact when their bosses share information and data. Likewise, managers that help team members establish performance goals help drive engagement.
Secret route to happy customers
Last year, Gartner predicted that 89% of companies expected to compete mostly on a basis of customer experience, a dramatic increase from 36% four years earlier. The key contributor to an improved customer experience? Highly engaged employees. Investments in employee engagement, with a focus on customer experience, can unlock new levels of growth and market share. The Aberdeen Group found companies with an engaged workforce realize 233% greater customer loyalty, along with a 26% annual increase in revenue.
Driving impact, accelerating performance
As trusted advisers to top leaders with executive search needs, we look closely at the hard-to-determine attitudinal elements and how each candidate could fit into each potential team, culture, and workplace. We assess the candidate’s human potential to impact the organization and to play a key role in engaging employees to accelerate performance.
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