24 September 2014

What's lack of employee engagement costing your company and what can you do about it?

High employee turnover is a huge underlying problem that is not so tangible, making it more difficult to address. Therefore, it is very cost effective for a company to invest in the retention of its staff and developing people within the organisation.



Staff well-being is high on the global agenda because keeping staff motivated and satisfied increases retention and reduces the need for recruitment. Research from Oxford Economics showing the cost of replacing a staff member is more than £30,000 (about US$49,000) – this includes the cost of lost output as the new replacement gets used to the role and the cost of recruiting that new worker.

With that in mind, we look at some ways of increasing employee engagement so that once workers come on-board, they stay there.

Gallup’s recent World Poll on employee well-being found that worldwide, only 13% of employees are engaged at work. This figure had increased from 11% in the previous survey. 63% of survey respondents said they are “not engaged” – meaning they lack motivation and are less likely to invest effort in organisational goals or outcomes. 24% of employees said they are “actively disengaged” i.e. unhappy, unproductive and likely to spread negativity among colleagues.  This equates to 900 million employees who are not engaged and 340 million actively disengaged staff. This low level of engagement is hampering economic productivity and affecting the quality of people’s lives.

Engagement is key to success

Gallup’s poll covered 34 countries, 49 industries and around 1.4 million employees. It found that companies who score in the top half of employment engagement are twice as likely to be successful. And organisations at the very top of the engagement levels have four times the success rate of companies who fail to keep staff engaged.

The poll also found that having engaged employees means that companies have 37% lower absenteeism, 25% lower turnover (in high-turnover organisations), 65% lower turnover (in low-turnover organisations), 21% higher productivity and 22% higher profitability.

The results show very clearly that it’s cost-effective for a company to invest in the retention of its staff and also to encourage employee development.

Five ways to increase employee engagement:

1) Use the right kind of engagement survey - When companies ask staff for their opinions, employees will expect action afterwards. So any survey must include relevant and specific questions that can be acted on at organisational level and also improve KPIs.

2) Recruit the right managers that fit in with the organisation’s culture - The best managers understand that the success of the organisation rests on the performance of the employees. Good managers want their staff to perform well and know how to empower them. Companies should make sure they hire managers who know how to get the best out of their staff.

3) Ensure employees can grow - Nobody wants to be stuck in a dead end job. Organisations must invest in their employees and make sure that they have ongoing training and career development. This gives staff a feeling that there are always opportunities to progress their career and that the company is helping them achieve their potential. This will improve staff retention.

4) Create the right environment - It’s important to work hard and be productive, but it’s also important to encourage social interaction. An employer can build a positive social environment by creating opportunities for employees to interact outside of the duties of their work roles. For instance, lunches and drinks are a good opportunity to connect with staff on a more personal level.

5) Transparency - While good salaries and training are important, employees want to feel like they know what is going on in their company. Having an ‘us and them’ barrier between senior managements and other employees will foster resentments, but being open and honest about organisational objectives will create a more harmonious environment.

In conclusion, investing in employee well-being will ensure that your staff are engaged and motivated. This will increase the productivity and profitability of your company, so it’s a win-win situation for employees and employers.

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