While it’s only a relatively recent idea, employee engagement has some key economic benefits for businesses and is growing in its use around the world – particularly when you consider the needs of newer generations like Millennials. Employee engagement not only reflects your employees’ happiness and devotion, but it also has an impact on a business’s bottom line, affecting everything from productivity and absenteeism to staff churn.
In this Planday guide, we’ll explain:
- Definitions of employee engagement
- Employee engagement’s benefits
- How to identify employee engagement (and its absence)
- A guide to how people become disengaged
- A look at who’s responsible for employee engagement
- How to implement and maintain employee engagement
- How to conduct an actionable staff survey
- Examples and metrics of employee engagement
- And, finally, some resources on tackling this vital component of your business (from software to books and podcasts).
What is employee engagement?
Definitions of employee engagement vary, but a good rule of thumb is to consider how enthusiastic and committed someone is with their work.
Polling company Gallup breaks employee engagement down to three categories:
- “Actively engaged” staff are enthusiastic about both their work and their employer
- “Not engaged” do the bare minimum
- “Actively disengaged” dislike their work and employers, leading to work unfinished and/or a hostile work environment
Employee engagement should not be confused with work satisfaction, job satisfaction or employee experience. Engagement refers to a combination of enthusiasm for both the work and the company.
While definitions vary, Maslow’s hierarchy of needs is a good starting point. Essentially, he says everyone has a list of needs, ranked in order of importance. In a broad sense, people need shelter, food, warmth; and once those are taken care of, we yearn for purpose, love, and so on. Modern adaptations also include factors such as WiFi and/or internet connectivity as one of the fundamental requirements people need to function. At Planday, we think that’s a great starting point!
This means there are base needs in the workplace – such as salary and security. This might be followed by job satisfaction. Higher up the pyramid sit “empowerment needs”, such as the ability to make company changes or to trust colleagues. Then, towards the top of the pyramid — once an employee has achieved their basic needs — they would seek challenging work and a clear path to meet their potential.
So, what drives employee engagement?
There are a number of studies on this subject, with many reaching similar conclusions. Quantum Research found leadership played a massive role in employee engagement. One of the highest ranking statements among those surveys was: “The leaders of this organisation are committed to making it a great place to work.” This is often reflected in praise from employers.
Similarly, Deloitte Research says 62 per cent of employees who want to stay in their jobs do so because they’re happy with management. And vice-versa – more than a quarter of those planning to leave are unhappy with their bosses. (We have previously discussed how to handle a disgruntled employee.)
A sense of comradery – and good team building – as well as trust definitely helps too, as we discussed in our guide.
Why is employee engagement important?
Beyond keeping good employees for longer, Gallup suggests an estimated $450 billion (€403 billion) is lost annually due to lack of engagement.
Unsurprisingly, staff turnover is directly linked to engagement. If someone isn’t happy and engaged, they will start looking for another job and leave. That means, every time someone is replaced, money and time is spent in finding a replacement, training them and waiting for them to reach their productivity potential. The cost climbs further if you don’t replace a departing employee on time: think of the productivity or (worse) billable hours lost every day you’re short staffed.
This number is not theoretical. SHRM estimate that it costs over $4,000 (over €3,600) to replace an employee.
(To read more about hiring and onboarding the right staff for your business, visit our blog.)
What are the benefits of having engaged employees?
Just as there are big risks in neglecting employee engagement, there are rewards for businesses which pay attention to their staff.
Apart from fostering an overall happier workplace, an engaged workforce brings monetary benefits. They are:
- Higher productivity. A company with an engaged workforce is three times as productive as one with an disengaged staff, according to a survey of 50 companies by Willis Towers. This means billions of Euros are lost in productivity to unhappy workers.
- Reduced hiring costs. Many of the headaches and costs of staff turnover could be avoided if you have engaged staff. The Gallup poll we mentioned earlier also finds that engaged staff are at least 25 per cent — and at most 65 per cent — less likely to look for a new job or leave.
- Lower absenteeism. Gallup also says engaged employees are 37 per cent less likely to be absent from work.
Engaged vs. disengaged employees
Why do employees become disengaged?
Most employees start their new job with the best of intentions. And certainly, every new hire is seen at the time as the best choice on offer. (See our guide on hiring and onboarding new employees for more.)
So, what happens? How do staff drift into indifference (or worse)? We’ve discussed before how to deal with an unhappy employee, but here we’re looking at the warning signs.
There are six factors that can lead to employee disengagement:
1. Quality of life
This means quality within the office (an appealing workspace, equipment they need, etc) and the hours worked. This is typically referred to as a work/life balance. In other words, set reasonable demands and working hours.
2. Appropriate work
Assigning seemingly impossible tasks, deadlines or metrics is a big discouragement. On the other end of the scale, asking an employee to do something with no challenge is dispiriting too. The ideal balance is a working day that’s gratifying and challenging, without seeming insurmountable. Put simply, set work which challenges your people and gives them a feeling of accomplishment when it’s done.
A nice atmosphere at work, pleasant co-workers and reasonable bosses contribute hugely to wellbeing and engagement in the workplace. Try to hire people who are not only good at their job, but pleasant to work with. And you should have systems in place to handle toxic behaviour.
Staff want to know that their work will be rewarded, whether it’s with a promotion, pay reviews, training, or other forms of recognition.
Rewards mean a fair salary and/or bonus package. Make sure you track the market and pay your people a competitive rate, with an ability to regularly review that as responsibilities change and they continue within your business.
6. Company practice and values
An employee is more likely to be engaged if their philosophies and values align with that of their employers. Free beer Fridays? Dogs in the office? Sounds like a good company culture. (And one we actively promote at Planday!) But more than a few beers in the fridge, “culture tells us what to do when the CEO isn’t in the room,” says Frances Frei & Anne Morriss in the Harvard Business Review. Read more about good company culture in our recent blog.
Who’s responsible for employee engagement?
Employee engagement tends to be cultural and company-wide. An engaged workforce doesn’t happen accidentally. Instead, it’s a result of the combined efforts of the company, which are:
A company’s culture filters down from the top. If a manager is irritable, demanding or volatile, this fosters a culture of fear and unease in the workplace. On the other hand, an approachable, fair boss will make staff feel more secure, happy and more engaged.
An HR manager is one of the most important parts of the puzzle. They are responsible for putting systems into place to protect against employee disengagement. This can take the shape of rewards programmes, clarity of company purpose, staff surveys and an open-door policy to the HR office, meaning that staff should have easy access to their HR manager.
The Planday Blog recently spoke with our Head of People & Culture, Mollie Oving, about how the old school days of HR management are over. You can read more here.
3. Team leads
A team lead should be approachable and clear with employees about their workload. They should also recognise good work, in an official and unofficial capacity. Specific praise for a job well done promotes good morale within the team. There should also be a plan in place for the employee’s long-term career.
4. Team members
Team members should work together, recognising good work, making themselves available to help colleagues and welcoming to new staff. This should be a cultural endeavour, not just dependent on employees to initiate.
How to engage your employees
There are several ways to engage your employees. It should start with a good plan…
Planning an employee engagement program: a step-by-step breakdown
Step 1: Start with a survey
A staff survey is a hugely important step in advancing moral, motivation and engagement in a workplace. Here is a quick guide to conducting one.
Why conduct an engagement survey?
There is often a disconnect between how a manager perceives their workforce and what’s actually going on. An effective survey will illuminate what’s motivating your staff, what they want, whether they’re at risk of leaving and whether you have a happy workplace. It’s also a fantastic opportunity to tap into your employees’ ideas on how to make it a better place to work.
Regular, well-conducted surveys will help guide employers to maintaining a productive, efficient workforce with low staff turnover. (At Planday, we use Office Vibe)
What are survey best practices?
Prior to drafting a survey, it’s a good idea to establish what you want to get from it. There should be clear, long-term objectives to guide the survey. There should also be a plan of when and how to implement survey findings, including a calendar and (if possible) a budget.
The survey should be tailored to the company’s current situation, size, goals and issues (if any). An “off the shelf” survey might work as an initial guide, but ultimately, it should be created with your unique company in mind.
Finally, the surveys should be anonymous and staff should feel safe to answer questions honestly.
What are some questions to ask?
A common approach is to ask statements that can be ranked from “absolutely disagree” to “absolutely agree” (say from one to five). Then for sample statements might be “I feel communication is effective within the company”, “I feel valued monetarily”, or “I feel I can talk to bosses openly.”
Be sure to leave an open-ended suggestion box at the end of the survey.
What is the cost of undertaking a staff survey?
This varies according to many factors, such as company size, survey size, outside consultancy costs (if any) and the amount of time you want to invest.
If you want to conduct it yourself, then the cost is the time spent on the survey. For anonymity, efficiency and speed, a software programme like Survey Monkey is worth the relatively small investment of roughly €500 – 1,000.
Going bigger scale, you can hire a consultant or specialist company to conduct the survey. Some major corporations spend much on these surveys and the analysis that follows.
This is a classic “how long is a piece of string?” question, but – like any investment – if the money is well-spent it should pay for itself. In this case, the savings would be in productivity and low staff turnover.
Step 2: Implement the employee engagement survey ideas
Some of these staff survey results will have quick fixes (“kitchen could be cleaner”, “need a new photocopier” etc). While others will be more complex (“I don’t have a career plan”, “I don’t feel valued” etc).
Share the results with staff, what you intend to do (a clear plan and calendar) and then allow the appropriate amount of time to implement the necessary changes.
Employee engagement strategies
- Implement an employee engagement roadmap
A long-term, clearly-defined future helps an employee feel valued and visualise staying at the company. Work on a trajectory with each employee, outlining where they would like to be in one year, maybe even five years, and how to get there.
This journey might include regular updates on how they’re doing, training programmes, plans for future projects and promotions, and pay reviews.
- Invest in staff development and training
This means training, seminar and conference attendance and workshops. The training can take many forms. It can be as simple as informal one-on-one work-throughs and discussions. Or it might be providing a training budget and time for staff to attend courses outside of work. An employee who’s learning and developing is happier and more engaged than one who is not.
- Have a recognition system
“Employee of the month” programmes, little rewards for minor accomplishments, and even simple emails praising good work, will all boost morale. Employees notice when they haven’t been acknowledged.
- Work on wellness
While your first thought here might be yoga and free fruit (both of which are also good ideas!), wellness can also be nurtured with a good attitude from management, being flexible (more on that below), maintaining reasonable work hours and fostering an atmosphere of kindness and support.
- Be flexible
Flexible hours are a great start if you want to encourage trust and good will. Strict 9am to 5pm hours (and beyond) do not suit every employee, so allowing the same volume of hours to be performed at slightly different times removes a lot of stress. This way, they’re not anxious about being late to work. For instance, parents might like to get in and finish early to help with school pick-up.
Flexibility might go further too — consider allowing sabbaticals, or letting staff work on passion projects which can turn into great investments for your business. Being flexible also means keeping workloads and expectations fair and realistic.
- Start a newsletter
This is a quick win. Talk to staff about what they’d like in a regular communication that’s short and informative. Use the newsletter to inform them of company and staff news, and celebrate little wins and milestones. Make it a fun, punchy read and a regular send-out.
- Align and clarify company values
What are your company values? Do you want to make the world a better place? Are you proud of what you do and how you make your clients’ or the public’s lives better? Do you want to make a positive difference (with a charity partner, for instance)?
Draft a plan and a mission statement, share it with staff, and stick to it. Employees like to know that they share the goals and vision of the company.
- Maintain engagement as an ongoing process
Engagement is not a one-off project. It should be a constant, as regular and frequent as paying invoices and keeping the lights on.
Have a calendar in place to maintain and update these engagement processes and keep communication open with staff.
Employee engagement examples
While we can’t speak to every moment that happens within a company’s walls, there are several real, practical examples of employee engagement happening throughout the business world.
Here are some positive initiatives that might provide inspiration…
1. Hilton Hotels’ “Heart of House” Programme
A common problem in any workforce is the disconnect between staff and management. Often, employees believe that management don’t fully understand the rigour, challenges and day-to-day routines of their staff.
In many Hilton Hotel branches, management does the “Heart of House” programme, where they spend three days in various departments, including housekeeping, food & beverage and engineering. Almost like the popular US TV show Undercover Boss, which gives leadership an on-the-ground understanding of how a business and its employees work.
This tells staff that management are interested in what people do. It shows management what it’s like to work in different departments. It also breaks down barriers, helping communication by having these people work in closer proximity than usual.
2. Salesforce give time and money to staff’s chosen charities
Salesforce staff are given 56 hours a year of paid time to work with their charity of choice. The company also matches its employees’ donations (up to $5,000) to charity.
3. Culture Amp hire personal coaches for each employee
Every employee at Culture Amp enjoys one-on-one time with a personal coach, who advises them on matters personal or professional. This is an ongoing process, and any coaching that takes place is between the employee and the coach only.
4. Lendlease gives its employees wellbeing leave
The mental health of your people is something managers and other co-workers should always consider. As the stigma around mental health continues to breakdown, global companies such as Lendlease now give their employees a day’s wellbeing leave every four months to attend to their health and wellbeing needs. Whether it’s taking time to get the help they need or just taking the kids to the park for a day, almost 70 per cent of Lendlease employees used their wellbeing leave in FY18.
Employee engagement resources
Employee engagement is a constantly-evolving process, as work culture changes, the workforce evolves and industries do too. Thankfully, as a result, there is a wealth of resources available to learn about this deep, changeable discipline.
- Employee engagement and business podcasts like the HR Happy Hour and the Tim Ferris Show discuss HR issues like engagement and workplace satisfaction.
- Employee engagement books such as Carrots and Sticks Don’t Work and Awakening Compassion at Work are both popular and influential.
Employee engagement metrics: How to measure employee engagement
Measuring happiness and engagement is never easy, whether in work or beyond. But there are ways to find out how your staff is feeling, without fear of recrimination or awkwardness on their end.
Here are a few…
1. Anonymous employee suggestion box
A traditional resource, but still an effective one. The anonymity will give you a first-hand look at how employee engagement strategies are working out.
2. Employee net promoter scores
This is an overall view of employees, following a survey with a simple, single question such as “how likely are you to recommend working here to a friend?”. From this question, you’ll have a picture of promoters, detractors and indifferent. (The wikipedia page on NPS is a great resource on this measure.)
3. Employee absenteeism and turnover rate
This is a good guide for staff engagement. A poll by Gallup on staff satisfaction found that a turnover rate should not exceed 10 per cent each year.
Employee engagement software
There are many engagement tech and software solutions to make life easier for management and staff. Here are some of the highest profile products available:
This Scandinavian scale-up is leading platform for measuring and improving employee engagement.
Employee evaluation management software. This simplifies employee feedback.
This company provides numerous HR software solutions for everything from onboarding to performance evaluation and beyond.
Real-time performance management software that works in tandem between management and staff.
Employee engagement software, including tools for employee recognition, surveys and communications.
Analytics tools that help evaluate staff engagement and satisfaction, then presents data in an accessible manner.
Insights, diagnostics and goal-tracking tools for employee engagement.
Engagement and feedback software favoured by several tech multinational companies.
Scalable survey software that works across entire organisations before providing
Providers of branded, native internal communications apps.
Employee engagement: More than an investment
It’s clear that good employee engagement makes for a smoother, more profitable workplace. But the investment pays off in other ways. Staff and management both benefit hugely from this practice. It can lead to a happier workplace, a friendlier atmosphere and a better work/life balance.
Want to keep your shift workers engaged and productive?
While many factors influence your employees’ happiness, work-life balance is a critical piece of the puzzle. As a Scandinavian employee management platform, Planday understands that when shift workers experience unpredictability and a lack of flexibility in their schedule, they can quickly become disengaged.
Planday’s Shift Worker App lets you communicate changes with your staff in real time and empowers team members to swap shifts and set their availability, keeping everyone in the loop and you and your team in sync with each other.