For years, the Gallup organization has been measuring employee engagement, its positive impact on businesses, and the negative impact of unengaged workers. Gallup surveys hundreds of thousands of business units and finds strong correlations between engagement with productivity, profit, and retention.
Benefits of Engaged Employees
According to Gallup data, companies in the top quartile of engagement deliver:
- 25 percent more profit.
- 81 percent lower absenteeism.
- 43 percent less turnover.
- 18 percent higher sales.
On the other hand, disengaged employees cost businesses an estimated $450 to $550 billion in lost productivity annually. They are twice as likely as engaged employees to report diagnoses of anxiety and depression. Those losses come from:
- Higher absenteeism.
- Higher turnover.
- Lower sales and profits.
"92 percent of business executives believe that engaged employees perform better, boosting the success of their teams and the outcomes of their organizations," Quantum Workplace said. "Engaged employees work harder, stay longer, and motivate others to do the same."
Eroding Gains in Employee Engagement
Gallup's surveys found engagement hovered around 30 percent for most of this century and jumped to its highest level ever at 40 percent in 2020 but returned to 34 percent in 2021. Why the change? Employers ramped up support for employees when everyone went remote, and workers rallied to make the change.
Gallup found that "during the first half of 2020, half of employees strongly agreed that they felt well prepared to do their job." But in 2021, "organizations lost sight of the basics," Gallup said. "Among the engagement elements Gallup measures, the greatest declines were in clarity of expectations, having the right materials and equipment, and the opportunity for workers to do what they do best."
Remote Work Taking a Toll on Engagement
The isolation of remote work has contributed to eroding engagement. A Microsoft survey of its workforce found that connections between employees dropped 25 percent compared with 2019. Organizational silos became more defined during the pandemic, and these silos also became less connected to each other as people talked less to their team members.
A 2021 survey by job-search site Indeed found that 73 percent of employees missed socializing with coworkers in person, and 46 percent missed work-related side conversations in the office. Heck, 50 percent even miss their daily commute.
"There is no denying the cold fact that it is getting harder to keep employees engaged and satisfied within their job role when they are not based in the office, and the truth is, it is only going to get more difficult for companies that do not understand or realize the potential damage that a lack of employee engagement can have," James Scott, CEO of Thrive.app wrote in The HR Director. "There is a need for businesses to focus on their employee experience and staff wellbeing to avoid losing valuable staff members to other companies that are offering more in these areas."
How to Improve Employee Engagement
How do you improve employee engagement? "Focus on the basics" is Gallup's message. "During significant turmoil, the basic elements of employee engagement become vulnerable, as was evident in 2021," Gallup said. "Employees' confidence that they know what is expected of them, have the right materials and equipment, and can do what they do best declined the most."
According to the ADP Research Institute employee engagement:
- Strongly depends on the engagement of the team leader.
- Drives performance and retention. Highly engaged employees sell more and are more likely to stay with an organization.
- Starts with trust. Employees who trust their team leader are 14 times more likely to be fully engaged.
Specific recommendations from Gallup include:
- Provide clear and frequent communication from leadership. Managers are responsible for implementing leadership decisions while motivating their teams to get work done. For example, investing in cloud collaboration software may help facilitate more employee engagement.
- Clarify expectations. Managers can only keep employees informed and engaged if organizational priorities are clear and well communicated as changes occur.
- Manage your managers. It is almost impossible to engage your employees if their managers are burned out and unengaged.
- Cultivate purpose and meaning. Meaning and purpose are what drive employee engagement.
- Foster meaningful relationships, particularly with managers who can coach them to the next level. Managers are the ones who drive employee engagement.
One of Gallup's most significant discoveries: the manager or team leader alone accounts for 70 percent of the variance in team engagement.
Make Engagement Everyone's Responsibility
Gallup said that 85 percent of employees worldwide are still not engaged or actively disengaged. "The greatest cause of a workplace engagement program's failure is this: employee engagement is considered 'an HR thing.'"
Engagement needs to be owned by leaders, expected of managers, and experienced by front-line employees.
Improving Employee Engagement in a Hybrid Office
As the challenges of keeping employees engaged when they work from home all or part of the time become clear, how do you overcome that distance and improve engagement? LinkedIn's research suggests the following best practices:
- Increase the frequency of one-on-ones and ensure two-way dialogue, not just information broadcasts. Hold open discussions, allow workers to challenge assumptions, and share quality research and insights. Holding consistent one-on-ones opens dialog and acts to help your employees feel more understood.
- Encourage and train managers to develop greater self-awareness and to recognize that their leadership is their primary job, not an afterthought to their daily work tasks.
- Hold frequent future-focused conversations to explore growth opportunities, the kinds of experiences they seek, and how you can support them. Employees that see opportunities to learn and grow are 2.9x more likely to be engaged.
- Create voluntary, employee-led groups for employees with common interests, experiences, and challenges to support one another, solve problems, and spur positive change. Consider offering stipends for employees that lead these groups.
- Solicit continuous feedback through anonymous engagement surveys to gain firsthand insights and then act on those insights with initiatives customized to people's preferences and needs.
Invest in Your Most Valuable Asset
The Predictive Index asked 600 executives across 20 industries how much of their companies' value they attribute to employees. The answer: 72 percent. If three-quarters of a company's value comes from its employees, investing in employees is the best investment a business can make. If it is true that an engaged workforce is more profitable, productive, and loyal, companies that give lip service to the notion that "our employees are our most valuable asset" need to walk the talk. Hybrid work creates challenges, but leaders can overcome them.
About the Author: Bill is Prialto's senior content marketing manager and writes about the future of work and how businesses can be more productive and successful. His work has appeared in the World Economic Forum Agenda blog and CIO magazine.