Is low employee engagement costing your business money?

employee engagement intranet

Over the years, one of the challenges facing internal communication and engagement professionals is how to prove your worth.

We have all faced a situation where a new leader or new FD joins the business and starts to review functions to understand where and how they add value.  And rightly so, if part of the business is not contributing in a meaningful way to the commercial goals of the business, then its existence should be challenged.  Or perhaps trading conditions force the business to look for savings and non-revenue generating roles and functions will come under scrutiny.

For internal communicators, defining in monetary terms what you do can be a challenge.  How do you prove the value you add?  For years, as a profession, we have been encouraged to use metrics and KPIs in this area, in order to move away from the ‘fluffy’ image. But I’ve seen many cases where those metrics relate to channel performance, and it is hard to translate that to the top line.

Yet we know, and thankfully so do many CEOs and leaders, that an investment in great communication and engagement strategies (the two are strongly linked) can and does enhance employee performance.  And here are some metrics to help you demonstrate it:

According to global workforce consultants, Towers Watson, 4 out of every 5 employees don’t work to their potential.  That is a lot of time, talent and potential that is being wasted.

To add to that, this study and others show that, on average, 4 out of every 10 workers are ‘actively disengaged’.

That is a lot of people who are being paid to come to work but are giving a lot less than they could, are potentially unhappy and have little interest in the organisation’s objectives. It’s also interesting I think that this data differs from the usual bell curve application of performance.  Food for thought?

So how do you spot an engaged employee?

Well, for me the key characteristics of highly engaged people are that they:

  • Use their talents daily
  • Have high energy
  • Are committed to the organisation
  • Live organisation values
  • Build connections and professional networks
  • Are pro-active
  • Are solution rather than problem focused
  • Demonstrate consistent high performance
  • Help make the organisation more profitable

In contrast, the key characteristics of disengaged employees are not surprisingly the opposite to the above. They are:

  • Often unsure what is expected of them
  • Do not feel committed
  • Focus on task not outcome
  • Are low energy ‘complainers’ or ‘gossips’
  • Negative networkers
  • Problem rather than solution focused
  • Unlikely to demonstrate corporate values
  • Do the minimum
  • Cost your business money. $3400 to $4000 for every $10k invested in their salary according to research by Gallup.

Some of these questions are asked in employee surveys.  But do your surveys measure engagement based on the drivers of engagement or ‘satisfaction’ as an employee? In my opinion, these aren’t quite the same.

As we have some data, let’s equate that to salaries for a moment.

The Human Capital Institute has put together a salary based model which shows the impact of engagement/disengagement with a similar ratio to Gallup’s.

If you have engagement data for your business and you have accurate numbers of what percentage of your workforce are in each of these boxes, you can calculate the cost of engagement or disengagement to your business.

This, of course, does not take into account recruitment and onboarding cost savings relating to reduced turnover and talent retention, which will also be delivered as a result of increased engagement.

This type of approach can be really helpful when considering the return on investment for employee engagement programs and presenting your case to a new leader or a sceptical finance director, for example (not all FDs or CFOs are sceptical!).

 

Emma Alcock is a Senior Consultant for RALC Consulting and specialises in Internal Communications, Employee Engagement and Intranet delivery. 

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