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Employee Engagement - Five Reasons to Make It a Top Priority

By Lisa Hays, Fresh Perspective
Posted May 1, 2015

Photo of Word "Priority" on a keyboardGallup has tracked corporate employee engagement annually since 2000. To put it mildly, there are significant opportunities for improvement. In 2014 fewer than one-third (31.5%) of U.S. workers were engaged in their jobs. Unfortunately, 2014 results were the HIGHEST levels of engagement since 2000. Additionally, beyond those not engaged, 17.5% were “actively disengaged” in 2014. Given corporate performance expectations – regardless of organization size or industry – greatly enhancing employee engagement is a critical component of future success.
Beyond a general sense that highly engaged employees are important to an organization, what are tangible reasons for making employee engagement a priority – particularly given that organization leaders face numerous competing priorities?

  1. Profitability
  2. Let's cut to the core of what drives many leadership priorities.

    Achieving sustainable organizational profitability is a tough challenge for nearly all leadership teams. However, it's not optional if the business is to survive long term. Committing to invest in assessing the current status and identifying priorities, developing meaningful methods and metrics to ensure change is real and sustainable, and creating an internal supportive culture for increased employee engagement will result in solid pay-offs.

    In 2012 consulting firm, Towers Watson, conducted an engagement study involving 32,000 employees in 29 markets worldwide. They found that how "high engagement" has been traditionally defined is no longer sufficient to drive needed performance levels.

    Their study found that those companies with the highest profit margins had a different employee profile than other companies. What varied? In organizations with the higher profit margins employees felt their companies energized them by promoting their physical, emotional and social well-being. The two top drivers of employee performance were leaders who 1) built trust by demonstrating a sincere interest in employee well-being and ensuring manageable stress levels and 2) provided a reasonable work/life balance.

    Companies where employees reported feeling well taken care of had TWICE the OPERATING PROFIT MARGINS of those with traditionally engaged employees, and three times the profit levels of companies with the least engaged employees.

    Also, although employees understand the emphasis on profitability, strategically, it's important for employees to feel that profits don't drive EVERY decision. .

  3. Talent
  4. During the Great Recession many talented employees felt they had very limited options, and elected to stay with their current employer. However, as the economy continues to strengthen, those employees with substantial talent are finding a number of opportunities available to them. It's now time for those organizations that have pushed their employees beyond the reasonable and created disengagement and burnout, to grasp the likelihood that many employees they have come to depend upon may decide they have done enough and seek a better situation elsewhere.

    Producing the products and services of greatest value in the marketplace now often requires talented individuals with some pretty specialized skill sets. Employers are increasingly experiencing the issue of numerous people seeking work, yet few of them possess the required skill sets to meet workforce objectives for today's and future market needs.

    So, what do those who have highly sought after skills/talents look for in an employer?

    • Active employee engagement programs that address physical, emotional and social well-being of employees in widely varying personal circumstances
    • Situations where leaders have created a pervasive culture of a balanced life, they care about employees as individuals, and employees are treated as the organization's greatest asset (essentially walking the talk); and there is an atmosphere of mutual respect and trust
    • Competitive compensation, including benefit plans with elements addressing specific employee needs. Examples may include: Fitness centers, healthy food available on-site, programs to help finance and manage the daily requirements of caregiving whether for children or parents sufficient vacation time (without an expectation to remain "tethered" while gone), telecommuting options, flexible work schedules, etc.
    • A straightforward understanding of how their contributions fit into larger company objectives
    • A clear view of how to achieve personal and career growth

  5. Long-term Focus
  6. A short-term focus is an especially pervasive issue within public companies where "Wall Street" expects specific results on a quarterly basis. It's tough for leadership teams to deliver on short-term expectations while building long-term value and an engaged and talented workforce one capable of meeting resilience and agility needs today and looking forward. Workforces must be prepared to meet dramatic market shifts, global volatility and the impact of incredible technology advancements that are becoming more the norm than the exception.

    Still, the ability to drive strategic decisions that produce long-term performance requires a long-term focus from a committed and engaged workforce.

    Today the media in many variations quickly makes public knowledge situations that previously received little attention. The term "going viral" is relatively new. However, today's media can take a story that once would have remained local and quickly communicate it broadly sometimes globally. Now media often uses their new-found communication powers to very publicly bring companies to task for what may have been long-time practices.

    A recent example: Connecticut Treasurer, Denise Nappier, submitted a proposal to the SEC in December calling for a measure of "employee engagement" to be used in tandem with financial metrics in determining Walmart's senior executives' pay. The SEC sided with Walmart, noting Walmart's recent wage increases were in part aimed at better engaging with employees. Ms. Nappier applauded the decision on wages, yet argued the employee engagement metrics were still needed to ensure that Walmart is committed to investing in its workers over the longer term. (Ms. Nappier's office oversees $40 million worth of Walmart shares in Connecticut's state pension and trust funds.)

    Institutional investors and employees both seek to invest in and commit to organizations where there is trust that the long-term view is the prevailing view.

  7. Positive Culture
  8. "Culture" is difficult to define briefly, but is easily identified through observation. In some ways it fits in the proverbial "I can't define it, but I'll know it when I see it" category. However, defining characteristics of a desirable corporate culture are clear.

    • Trust Trust-building requires consistent ongoing investment in the leader-employee relationship. Beyond understanding employee skill sets, it's important to also understand their motivations. What makes them want to excel?
    • Do what you say you will The ability to count on promises to be kept builds a track record with substantial cultural value.
    • Back up your people Nothing new here. Essentially, support in public, and when needed, coach in private.
    • Ask questions then listen Feeling you are being heard builds bonds.
    • Ensure consistency in decision making There is considerable comfort in a culture where people and business decisions are made consistently.
    • Walk the talk Employees as the company's greatest asset is reality, and should be treated as such. Ensure your actions and your words reinforce each other.
    • Maintain confidences and demonstrate integrity Integrity must be foundational.

    Always know that as a leader what you do and don't do WILL be noticed. And it matters.

    The culture of any organization is shaped by the
    worst behavior the leader is willing to tolerate.

    Gruenter and Whitaker

  9. Innovation
  10. Continuous innovation is becoming a base expectation for businesses across numerous industries. Breakthrough innovation is driving huge changes across industries. Staying ahead of or at least on a par with competition is becoming increasingly difficult and increasingly critical to future profitability and growth.

    Also, innovation applies not only to products and services, but also to processes, methods, communication, and a myriad of other important elements and factors within an organization.

    Achieving breakthrough innovation is difficult to achieve in the best of circumstances. Not surprisingly, it is impossible in organizations/situations where employees are not engaged, don't function as a team and are not committed to the company's success.

Profitability, talent, a positive culture, a long-term focus and innovation are interdependent and each is critical to attaining and maintaining a top-notch organization with a highly engaged, talented, committed and productive workforce.

Fresh Perspective
Fresh Perspective helps business leaders make key strategic decisions. We adeptly research, analyze and synthesize results to deliver only ‘need to know’ insight to leaders so they make the right decision the first time. Lisa Hays, founder and CEO, gained considerable experience from widely varied roles in large corporations. She combines her 30+ years’ experience, expertise and objective viewpoint to directly help business leaders.

Lisa Hays, Fresh Perspective, Inc.
Twitter: @Periwinkle4Lisa



Meet Lisa Hays, President/CEO