News & Blog

• Written by Roy Fletcher
• Published: 19 August 2021

The business benefits of employee engagement on organisational performance and bottom line are not new or ground-breaking insights. The studies and reports are irrefutable, but as the world shifts in unprecedented ways, organisations become distracted from some fundamental principles which have time and time again put them on a better footing.

In the era of slashed budgets, shifting markets and evolving ways of work, the sheer number of moving parts and problems to solve have become exponential. The pandemic has shown that the capability, capacity and resilience of leadership is not infinite. For organisations to truly be resilient they need to tap into the capabilities and capacities of their people, more now than ever before.

However, our research indicates that only 2 out of 5 employees are fully engaged, meaning that the majority of employees are not expressing their full potential while at work. Disengaged employees cost organizations in the U.S. between $77 billion and $96 Billion in revenue annually. It would be a no brainer to double down and invest heavily in employee engagement in current climate. 

Reducing costs, driving efficiencies in supply chains and striving for digital differentiators has been a strategy for many. Achieving the aims of any of these strategies will depend on the degree of change readiness, strategic alignment, willingness and commitment among the people inside of the organization.

Deloitte’s report: Retail industry outlook 2021 sheds some perspective on the work the retail industry has ahead of it in the coming years:

"The trajectory of the pandemic and vaccine rollout will undoubtedly shape the 2021 economic landscape. Retail executives seem to agree that an economic recovery to prepandemic trajectory levels will take time, with six in 10 expecting recovery in the next one to two years—but a quarter see a longer timeline of two to five years. The old playbook and rules will likely have to be thrown out, and bold, differentiated action will be required to stand out from the competition."

We have seen so many businesses that have been steadfast in maintaining an annual or biannual employee engagement survey, without realizing any benefit.  Why?  Most commonly we find, some combination of poor mapping of reporting lines to results, limited demographic data, and interventions being forced from the top down are responsible.  Adopting a more sophisticated engagement strategy could be the difference between total defeat and a positive market differentiation.  With the world shifting at an incredible pace and a shifting market for talent, engaging and supporting the workforce by including them in the solutions becomes a critical business priority. For another perspective on how critical this is see this Forbes article.

Additionally, Gallup’s research has found that employee groups with high engagement levels, “experience 22% higher profitability and 21% higher productivity compared with work groups with low levels of engagement. These employees also demonstrate 65% lower turnover and 10% higher customer ratings relative to work groups with low engagement.  How much would a 65% reduction in turnover save you in Talent Acquisition costs?

Employee Engagement Affects Key Business Outcomes. Copyright © 2021 Gallup, Inc. All rights reserved.

Practical steps you can take:

• Adopting and implementing a more hands on approach to employee engagement.
• Setting up a benchmark and measuring the right things, with consistent pulses and employee feedback loops and reporting on progress at regular intervals.
• Enabling and empowering leaders and managers at all levels of the organisation, all the way down to supervisory and team level to own engagement.
• Giving leaders the data and insight to take control of and be held accountable for their engagement level within their teams.

A great example can be found with Starwood Hotels.  When Jeff Cava became the CHRO, he partnered with the Marketing and Guest Intelligence Teams—groups focused on measuring guest experience and loyalty—to fundamentally rethink the way Starwood served its guests, by focusing on and unlocking the potential of its employees The immediate impact was profound.  Starwood experienced a number of positive changes, including:

• Increased collaboration between departments in the hotels reducing customer complaints and increased occupancy.
• Helped employees do better at work and succeed with more autonomy in their jobs.
• Created and enabled immediate feedback loops to track effectiveness of efforts.
• Aligned incentives for GM’s and Leadership teams to create a guest experience index that integrated with the employee experience index. Incentivized by rewards.

Engaging employees with a clear purpose and goal, enabling them with the appropriate tools and autonomy, and tracking the data of effectiveness at the points where it matters made a huge difference for Starwood.  And by Empowering and aligning leadership with meaningful metrics, Starwood brands continue to stand out as distinctive for both the guest and employee experience. Driving customer loyalty through engaged employees leads to more profits while retaining the best employees and reducing turnover costs.

The benefits are clear.  How to get them has been less clear.  But there are a few practical things you can do today to make an impact.

• Use a survey that gives you detailed visibility into demographic and organizational structure.  It’s the only way to truly isolate issues and create targeted action plans
• Build employee buy-in by making sure everyone understands how they are part of the solution, and aligning incentivized activities
• Monitor and track issues and solutions at discrete business levels with pulse surveys
• Change leadership behaviour by providing guidance based on survey results, incentivizing leaders to make suggested changes to improve business performance.

The right tools can provide you with key data and insights to build meaningful and high impact employee engagement strategies.  Not only will this make you more competitive, but it will help your employees truly feel valued. And at the end of the day that is what every human wants.