Why does employee engagement matter?

Refuted by many as pseudoscience or simply a drain on company resources, research has proven there is intrinsic monetary value to employee engagement in a business environment.

Broadly defined as ‘the emotional commitment an employee has to the organisation and its goals,’ benefits of positive employee engagement can include:

  • Increased productivity. Engaged staff internalise the pursuit of business goals, without focusing solely on remuneration considerations.
  • Engaged employees positively promote their companies’ products and/or services.
  • Innovation, problem solving, motivation and a drive toward continuous improvement characterise the workplace approach of engaged staff.
  • A positive company culture. This, of course, has numerous benefits, and can assist in attracting new talent and bolster the retention of existing team members.
  • Decreased absenteeism. The more engaged your employees are, the greater the likelihood that they will accept their workplace responsibilities, contributing to lower workplace absenteeism.
  • Better collaboration and teamwork. De-layered hierarchies and greater worker autonomy demand collaborative teamwork, which engaged employees readily embrace.

Business writer and CEO Kevin Kruse, terms the return-on-investment effect of engaged employees on a company the ‘Engagement Profit Chain‘. Wherein higher employee engagement leads to a higher service standard, which leads to increased customer satisfaction and sales. This, in turn, leads to larger profits and ultimately higher shareholder returns.

Gallup’s 2020 Meta Analysis study, found that organisations with high levels of employee engagement, reported higher productivity (17%) and profitability figures (23%), than companies with poor engagement.

What are some of the employee engagement challenges?

According to a recent poll, 78% of employees globally are disengaged. Considering that frontline workers make up about 80% of the workforce, and it is evident that corporations with an extensive frontline workforce, are struggling to engage their workers.

Locally, it is estimated that around 42 out of every 100 South African workers are disengaged and ‘unmotivated to affect real change in their organisation’. This directly translates to reduced output, as one poll found – actively disengaged employees cost America up to U$605 billion per year in lost productivity.

It is clear low employee engagement has tangible financial implications. Low engagement can be due to various factors, including:

  • Workers not feeling valued or appreciated.
  • Staff contributions to the company not being recognised or rewarded.
  • Employees lacking motivation to go above and beyond.
  • Workers not feeling empowered to bring about change – this can be the result of internal systems and/or gaps in skills or education.
  • Poor management.
  • Lack of clear communication and transparency regarding company goals and objectives.
  • Workers lacking communication channels or tools. Frontline workers, primarily, will not have a company email address to access for communication purposes. Utilising mobile technology, such as an employee communication app, is the easiest and most effective way to communicate with staff and increase engagement.

Assessing and encouraging employee engagement

Measuring employee engagement as a stand-alone component is difficult but doable – more so, it can provide companies with valuable insights. Currently, most companies opt to look at two variables: employee and customer satisfaction to gauge engagement levels, according to a Harvard Business Review study.

This approach has been adopted by American retailer Zappos. According to Alfred Lin, former chairman and COO: ‘Zappos was built on the simple premise that to have happy customers, we need happy employees. To have happy employees, we need a great company culture. The success of Zappos demonstrates the linkage between company culture and employee engagement to company success.’

Other employee engagement metrics that can be tracked include:

  • How employees interact with internal communications, such as company newsletters. Engaged employees are likely to read and comment on company communications.
  • Customer net promoter scores. Higher scores indicate superior service, which means employees are putting the customer – and the business – first.
  • Productivity. More engaged employees are more productive, which will result in higher sales or tasks completed.

While there are several approaches that can be adopted for measuring employee engagement, it is vital for leaders to maintain a consistent presence – whether physical or virtual – amongst employees to promote ongoing engagement.

A South African study aimed at defining a comprehensive model which can be utilised for measuring employee engagement, found that in organisations where leaders make efforts to be connected with employees via regular communication, constantly reinforce and recognise the value of performance and share a strong future orientation with employees, there is a greater likelihood of finding engaged employees.

Key Takeaway

The economics for frontline employee engagement are clear. As Jack Welch noted: ‘There are only three measurements that tell you nearly everything you need to know about your organisation’s overall performance: employee engagement, customer satisfaction, and cash flow.’

Digital experience solutions company, Wyzetalk, provides a myriad of answers for growing and modernising employee engagement that improve engagement and boost employee productivity.

To find out more about the Wyzetalk platform, and how it can help your organisation engage its employees talk to an expert today.

To find out more about how digital employee engagement solutions deliver positive results, read here.