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Trends, Product and Industry Insights to Help Create Your HR Tomorrow, Today.

Ignore Employee Engagement at Your Peril

Sunita Khatri
Director, Product Marketing

The term “employee engagement” has become ubiquitous in the HR industry. The new adage is “The customer is not No. 1. They are No. 2, right behind the employee,” as Marcus Lemonis, host of the CNBC program The Profit, put it.

Research on human capital management shows how employees’ satisfaction levels and conditions of engagement in the workplace will determine whether they will thrive or not. “Employees are now just like the customer; companies need to consider them as volunteers, not just workers,” according to consulting firm Deloitte in its Global Human Capital Trends 2015 Report. Organizations that put a premium on loyal employees will start prioritizing their people just like they do their customers.

But what is employee engagement exactly, and how is it valuable? Is it as easy to achieve as introducing a new wellness program or installing new talent management software to motivate and grow talent? Let’s break down this misunderstood term for some clarity.

#1: An Engaged Employee Is Satisfied and Happy

You don’t need research to understand that satisfied employees are motivated and happy employees. Nearly three out of four respondents to the annual Employee Engagement and Job Satisfaction Report by the Society for Human Resource Management cite “respect for co-workers” or “respectful treatment of employees” as most important when rating their job satisfaction. Job security and compensation ranked lowest. Turns out, pay is still important, but how people feel about their peers and their management is even more important. Higher pay won’t solve your employee-retention problems.

Happiness also leads to higher productivity and employee retention. A study by Oracle earlier this year in Western Europe reveals that the more an organization does to get engagement right, the greater the chance that employees will feel productive and the less likely they’ll look for work elsewhere.

#2: An Engaged Employee Relates to the Company’s Culture and Mission

In the Deloitte study cited earlier, leadership rated company culture and employee engagement as the most important HR issue. Perspective is everything. Having a sense of purpose of how individual work contributes to a larger mission other than revenue—is essential to job satisfaction and greater individual success.

In a recent survey by employee-recognition specialists Achievers, 57% of employees did not know their company’s own mission, which can negatively impact how they feel about how their job contributes to the company’s vision or purpose. Sixty-one percent also reported not knowing their company’s cultural values. Culture, which entails the conditions in which employees experience their day-to-day work routines, is your company’s DNA. Employees are more likely to engage if they feel invested in the company’s culture and its products and services. 

#3: An Engaged Employee Is Given Opportunities to Participate in Wellness, Recognition, and Motivation Programs

As clichéd as it may sound, people want to love what they do.

In the Oracle survey mentioned above, 53% of employees said management’s biggest priority should be to recognize employees’ achievements, followed by helping employees understand their contribution to the company (35%) and giving them the opportunity to work on exciting projects (34%). Only 29% of survey respondents think their company is proactive at engaging them.

An increasing number of employees say engagement stems from feeling recognized or motivated to perform in their jobs. Yet the absence of recognition and motivation can’t be fixed overnight. Engagement techniques are inherent in the company culture and DNA.

HR and social collaboration systems help businesses introduce employee recognition, career development, and succession planning programs, but the inspiration to engage with those employees must come from company leaders, managers, and HR professionals.

As much as employees want to love what they do, they also want to feel good doing it. To help reduce burnout and boost employee happiness, companies are fostering a culture of wellness and motivation. Poor mental and physical health can cost employers up to $153 billion in lost productivity annually, according to a Gallup Study of Unhealthy U.S. Workers.

Why Is Employee Engagement Important?

Employees who are happy and engaged at work not only perform better, but they also cost less, as they’re generally healthier employees who miss fewer days of work.  

According to the Oracle survey, the benefits of engagement also extend to improved customer service: “30% of employees said they are more inclined to deliver better customer service if they feel engaged. This suggests organizations that get employee engagement right stand to gain a great deal in terms of improved business performance.”

While the evidence suggests that improving employee engagement and welfare pays off, can we quantify that payoff? According to a study by employment website Glassdoor, the stock prices of companies with high employee satisfaction levels generally outperform those of companies with unsatisfied employees. There isn’t a scientific correlation between investments in employee engagement techniques and higher revenue, but according to this latest research there could be shareholder value.

I will be presenting more on people engagement amid this talent revolution at the upcoming Oracle CloudWorld events.


 

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