To realise the enormous benefits a high level of employee engagement brings, organisations must proactively work to engage their employees. The research into the business benefits highlights the reasons employee engagement shouldn’t just be a management fad or undertaken in an ad-hoc way. Measured benefits include:
- Highly committed employees try 57% harder, perform 80% better and are 87% less likely to leave Corporate Leadership Council)
- Companies with high employee engagement experience higher operating margin (up to 19%), net profit margin, revenue growth and earnings per share(up to 28%) (Towers Perrin)
- Companies with highly engaged employees typically achieved a financial performance 4 times greater than companies with poor employee attitudes (Watson Wyatt)
- Engaged employees are 7 times less likely to leave in the next 12 months and 1.5 times more likely to stay for at least 5 years. (Right Management)
- Higher levels of engagement are also associated with lower levels of sick leave and higher levels of flexibility in work patterns
So given these undisputed business benefits, why has research consistently shown that on average only one in three employees is engaged in their job and the organisation that they work for? Research by Towers-Watson showed an even gloomier picture with only about 15% of employees being actively engaged.
To examine this question, we first need to define active engagement as opposed to engaged, disengaged and actively disengaged employees. Many managers talk about engagement, but, when asked, they often stumble describing what it looks like. Below are a couple of pointers.
The Institute of Employment Studies (IES) asked HR professionals how they defined engaged employees. The response was engaged workers:
- Believe in their organisation
- Desire to work to make things better
- Understand the business context and the bigger picture
- Are respectful and helpful to colleagues
- Are willing to go the extra mile
- Keep up-to-date with developments in their field
Similarly a recent Gallup poll (G12 Employee Engagement Survey) discovered that engaged employees demonstrate:
- Consistently high levels of performance
- Natural innovation and drive for efficiency
- Intentional building of supportive efficiency
- Clear understanding of the desired outcomes for their role
- Emotional commitment to what they do
- High energy enthusiasm
- Commitment to their organisation, work group and job
As summarised in the research done for the Chartered Institute of Personnel and Development (CIPD) by Kingston Business School, engaged employees can be defined as those displaying discretionary effort, which they can volunteer or withhold.
We know from over 10 years working in the leadership development and executive coaching space that this discretionary effort is determined by the quality of the relationships between the employee, their manager and their employer.
Similarly, we observe that many managers don’t focus on their direct reports levels of engagement as they don’t make the links between those engagement levels and their success.
This is the same for senior managers who don’t make employee engagement part of the strategy as they haven’t considered the business benefits. An IES study showed senior leader buy-in is critical for employee engagement initiatives to succeed.
The IES and CIPD research measured key drivers of employee engagement to include:
- Employees have the opportunities to feed views upwards
- Employees involvement in decision making
- Extent to which organisation and manager is concerned about employee health and well-being
- Employees opportunity to develop their job
- Employees feel well informed about what is happening in the organisation
- Employees think their manager is committed to the organisation
From our experience we would add that to enable engagement an employee need to observe that a manager is committed to three areas:
- To the organisation (as discussed)
- To getting quality results
- To caring about the professional development of their direct reports
We have pointed out to many managers we have been coaching that often the reason for the low morale, lack of trust, low productivity, etc. is that they as a manager are only demonstrating the first two points. Direct reports are often confused when their manager obviously cares about the business and about getting results but doesn’t show much commitment to their people.
Just as the CIPD report highlighted the drivers to employee engagement it also detailed the key barriers. These include:
- Reactive decision-making that does not pick up problems before it is too late
- Inconsistent management style which leads to perceptions of unfairness
- Lack of fluidity in communications and knowledge sharing
- Low perceptions of senior management visibility and quality of downward communication
- Low levels of advocacy
As we can see from the key drivers and barriers to engagement a managers ability and effectiveness is key. A ‘well rounded’ manager, who has a balance of:
- Technical/Commercial Skills
- Leadership/ Interpersonal Skills
- Business/Management Skills
is more likely to take an active interest in the engagement levels of his or her direct reports and the business overall. Hence investing in management development and KPIs that include the dimensions outlined above is the first step to success.
To us, the research goes a long way to explaining why coaching tends to have such a high return on investment (ROI is reported as 300-700%). Coaching is the most effective way to changing a manager’s behaviour and our coaching has a strong and clear focus on high levels of employee engagement.