Ideas & Debate
Why employee engagement is key to growth driverWednesday March 22 2017
Twenty years ago, there were fewer than 700,000 industrial robots worldwide; today, there are 1.8 million, and the number could soar to 2.6 million by 2019. Given these advances, it is no wonder that many people fear for their jobs.
According to the just released global PwC 20th CEO survey (2017), only 16 per cent of CEOs plan to cut their company’s headcount over the next 12 months — and only a quarter of them say it’s primarily because of technology.
Conversely, 52 per cent plan to hire more employees. Clearly, CEOs see the value of marrying technology with uniquely human capabilities. The skills they consider most important are those that cannot be replicated by machines.
Employee engagement can be described as the extent to which workers are motivated to contribute to business success and are willing to apply discretionary effort to accomplish tasks important to the achievement of business goals. Why should employee engagement matter?
Numerous studies have demonstrated that businesses with highly engaged employees see higher customer satisfaction, have lower turnover rates, and outperform businesses with lower levels of employee engagement. High performing organisations and those that regularly conduct engagement surveys and take action on them, reveal significantly higher performance than those that do not.
You may ask what contributes to high employee’s engagement. In November 2016, PwC’s People Analytics released its annual Employee Engagement Landscape research study.
The study is a representative sample (over 7,400 respondents) of full-time employees across industries and global regions to gain insight regarding issues and trends organisations are facing in their efforts to attract, retain, and engage employees.
Several of the most commonly endorsed obstacles reflected quality of staff (for example doing work for others that is not part of one’s job, unproductive teammates, and inadequate staffing levels) as well as broken/inefficient processes and imposition on time ( too many meetings, paperwork).
Employees are happier if their roles are clearly defined and there is a clear career development path. They want to feel that their contribution to business goals is recognised.
Employees also want to feel fairly remunerated for their work. Fair remuneration does not mean that your organisation is paying at the top of the market, it means that you have communicated your remuneration policy well and employees identify with the various components that make up your package.
For instance you may have a split between your performance based pay (bonuses and sales incentives) and the guaranteed pay (basic pay) with the latter taking up a lesser portion.
Unless you can articulate the reasons for this and your employees appreciate that the bonuses count and reward those who put in their best foot forward…the issue of poor pay will always feature as a thorny issue in your engagement survey results.
The world trend is to move into a consolidated total package.
Leadership and management styles are another factor determining the level of engagement of staff. The PwC engagement model puts the employee landscape into four groups.
On average, only 41 per cent of employees across the world are Champions. However in high performing organisations, the number jumps to 74 per cent.
The number of Disconnected employees is 24 per cent of the working population, and number of Captives is 32 per cent, suggesting the bigger risk for organisations is not those who are looking to leave, but those who aren’t engaged but not planning on leaving – creating a drag on business performance and goal attainment.
Looking at what helps create champions and activate engagement, the strongest driver is leadership trust and vision. Without confidence in leadership and excitement about where the organisation is headed, it is difficult to engage the workforce.
Other stronger drivers of engagement include respect and fairness, growth and development as discussed above, commitment to quality, and cooperation/collaboration.
Results suggest that performance in these areas is more inconsistent rather than lacking altogether. In other words, the goal for creating stronger engagement for many organisations is consistency of action — doing the right things most of the time rather than just some of the time.