Business leaders struggled with employee engagement long before the ‘Great Resignation’ or ‘Quiet Quitting’ became buzzwords we hear everywhere in the media. The truth remains that disengaged employees cost companies a lot of money: Simply replacing an employee is expensive. The Society for Human Management estimates that replacing one employee costs approximately 50-75% of that employee’s annual salary.
What costs more than replacing an employee is the financial impact current disengaged employees have on your business. In studies by the Queens School of Business and the Gallup Organization, disengaged workers had 37% increased rates of absenteeism, 49% more accidents, and 60% more errors. Organizations with low employee engagement scores experienced 18% lower productivity, 16% lower profitability, and 37% lower job growth. Conversely, businesses with highly engaged employees enjoyed 100% more job applications.
An engaged employee understands their business's goals and how they contribute to achieving them, giving them context. Being engaged also makes it easier for employees to work with their team to improve job performance for the organization's benefit. Authentic employee engagement comes when enough people within a company care about doing a good job, what the organization is trying to achieve, and how it goes about doing it.
This caring attitude and impactful behavior can only develop when people are consistently satisfied with their jobs and believe the organization supports them.
What Goes into Improving Employee Engagement
Several factors go into creating a culture that encourages employee engagement.
- Measuring what matters most for employees’ performance. Leaders often focus on metrics not tied to employees' psychological needs and ultimate performance.
- Career Investment. Employees need ongoing purpose and development, not biannual perks, to achieve more for your organization.
- Acting quickly. Employees who strongly agree that their organization takes swift action are 1.9 times more likely to be engaged.
- Make it an ongoing process. One of the most common mistakes leaders make is treating engagement as a sporadic exercise to make employees feel "happy."
Empowering managers to drive engagement. Managers account for 70% of the variance in team engagement. There are no quick fixes when it comes to human relationships. It is essential that managers effectively interact with and develop each team member over time.
Organizational leaders who embrace the notion that investing in their team’s growth directly correlates to employee and customer retention understand the value. In a 2014 tweet, self-made billionaire and founder of the Virgin Group, Sir Richard Branson, said: “Train people well enough so they can leave. Treat them well enough, so they don't want to.”
Many leaders will cringe after reading the first half of this quote. I have too often heard leaders opt for limiting training within their companies for fear that employees will leave as soon as they add more skills to their resumes, thereby losing that investment made. Or, the leader may not have taken the time to understand the value the training will have on the individual’s performance. Either scenario demonstrates a short-sighted perspective.
"Winning” companies invest significantly in their workforce because, by caring for their people’s needs and desires to grow, those employees will give their best effort and feel valued enough not to quit. Those same companies have low turnover and can recruit more easily. Studies have shown that over 70% of leaders rank employee engagement as very important to achieving overall organizational success. An engaged workforce leads to improved productivity and performance and increased motivation.
Training Employees Well
What does “training” mean in your organization? Is it just focused on skills and knowledge to make them better at specific jobs, or does it also include growth and development in being human that will make them an improved version of themselves?
According to a study of more than 18,000 frontline workers across 150 companies, lack of career growth is the number one reason for turnover. The data shows that people aren't looking to clock in, clock out, and cash their checks. They seek meaningful work that helps them develop their skills and career paths. So what are you doing in your company to train, foster growth, and retain your talent?
When your team is armed with the necessary skills to advance their capacity to perform well and lift their human spirit to be and do their best, productivity will soar. Motivated, self-driven employees will deliver nothing short of the best results. Is it possible that employees may still feel the urge to leave? Of course. They may feel they can contribute more elsewhere as they gain knowledge and expertise. This experience is innately human and something every leader must accept: people desire to grow and take on new challenges, and sometimes those challenges may lie elsewhere.
Treating Employees Well
This is where effective leadership plays a significant role. If you lead your employees well and hire the right people, you will retain most of them. Unfortunately, many leaders will only provide their employees with the necessary training to help the business succeed but must remember to value them as human beings.
A sign of great leadership is cultivating a compassionate organization that relies upon the knowledge and value of individual contributors rather than the classical hierarchical organization, which relies on the understanding of those at the top of the ladder. Forward-looking leaders who provide continuous training to upskill their employees and develop their capabilities for future company positions have a distinct advantage.
Developing a framework that encourages people to learn, grow, and progress in their careers unleashes the commitment and motivation to willingly remain an engaged employee who actively contributes to the organization’s growth. In turn, this significantly reduces the desire to seek employment elsewhere.
The next time you are frustrated with high absenteeism, the high number of accidents affecting your operations, and errors impacting profitability, take a moment to reflect and measure your team’s level of engagement. You will then have the opportunity to take action.