If the talent retention war was difficult to navigate prior to the Covid-19 pandemic, today it is even more complex given the unprecedented changes to the workplace environment and culture the pandemic has caused. What hasn’t changed is that finding and retaining qualified employees remains a top priority. While there’s no single consensus on measuring the cost of employee turnover, it’s clear that the impact on the bottom line is significant. For example, one consultant and research estimate that the turnover costs for a 1,000-employee firm with a 16 percent turnover rate are upwards of $10,000,000 with about 85 percent of that coming from “hidden costs,” such as lost productivity.
And that’s just the tip of the iceberg. According to the Gallup State of the Global Workforce, a whopping “85 percent of employees are not engaged or actively disengaged at work,” costing an estimated $7 trillion in lost productivity. What’s more, approximately 1/3 of all employees voluntarily leave their jobs each year, and that figure only appears to be growing. Interestingly, Gallup has also found that businesses with engaged employees tend to have 21 percent higher profitability.
Given these figures, it should be abundantly clear that retention should be a top concern for today’s HR leaders. That’s where employee engagement programs come in. Employee engagement programs are designed to optimize employee performance by engaging them in a mutually beneficial relationship with the organization.
Of course, people are complex and there’s no one-size-fits-all solution. Employee engagement goes far beyond compensation and benefits, and different people want different things from their jobs. To help HR pros navigate this complex issue, we’ve developed the following guide to employee engagement. Let’s dive in!
What Does an Engaged Employee Look Like?
There are a number of ways you can define an engagement, but generally speaking, an engaged employee is one who is passionate about their work and is personally invested in furthering an organization’s goals.
While that definition may be fairly straightforward, engendering personal investment in a business isn’t. To understand what it takes to make an employee feel engaged, it’s important to look at what makes them feel good about work? The trick, of course, is that can vary from person to person.
That said, we can break down factors that contribute to employee engagement into a few different categories:
- Compensation and Benefits: Employees need to feel that their compensation is equal to their worth. When employees aren’t paid sufficiently or are not satisfied with their benefits (for whatever reason), then they will likely be less engaged.
- Leadership and Management Transparency and Communication: Employees want to feel like they’re part of something larger. However, when they feel their managers or leaders aren’t being honest or open about things, they tend to feel less connected to the firm. Clear communication also plays a large role in helping employees feel engaged; they want to get constructive feedback on their work, they want to understand how their day-to-day tasks contribute to the greater cause, and they want to know they can communicate to their superiors about issues important to them.
- Career Development and Training: Employees want to feel like their company is invested in them, and that they’ll be rewarded for improving their skillset, knowledge base, and experience.
- Tools and Resources: Similar to career development and training, employees want to feel they have what they need to do their job.
- Teamwork and Collaboration: Part of feeling connected to a bigger cause is having colleagues who help each other get there.
- Recognition and Rewards: Employees want to be recognized and rewarded for their contributions, both publicly and privately. When someone goes the extra mile, they want to be praised. Rewards are also important, and they typically go beyond simple raises and bonuses (though those are helpful, too).
3 Strategies for Growing Employee Engagement
There are a large number of approaches that a company can take to grow employee engagement, but any program should take into account the above-mentioned factors. Remember that not every strategy is going to apply to every employee, thus it’s important to get a sense about what matters most to your workers in order to develop a program that is effective.
Embody Your Core Values
Your company’s core values are more than just fluff. They define how work gets done as well as expectations for behavior of everyone in the company, from the CEO to the interns. But it’s not enough to simply pass out a memo with those values stated. Employees need to see them in action, particularly from their leadership. Lastly, these values need to be upheld. It’s not enough to give them lip service, and in fact, when leadership or managers do that, they undermine their effectiveness.
Think Beyond the Job Description
Career advancement can play a large factor in whether an employee stays in a position long-term. But too often, firms don’t create a clear path for employees to advance. Leadership needs to take the time to understand how different roles can connect to and progress from each other, but also to create a clear path for employees to travel to take their career in a satisfying direction.
Create a Culture of Participation
Employees need to feel empowered to contribute to the corporate culture, and that means being consulted on decisions that impact them. For example, if you’re revamping your benefits package, it’s a good idea to consult with employees on what they’d like to see in the package. They might not get everything they want, but including them in the discussion will go a long way to make them feel heard and appreciated.
Similarly, participatory culture is one where employees feel comfortable talking to their superiors, be it their direct manager or someone three levels above them. Feedback needs to flow in both directions.
Increasing Employee Engagement Shapes Company Culture
Most managers might think that a business with a strong company culture automatically will result in engaged employees. In the real-world, though, it is employee engagement that actually builds company culture. That is, culture is built through actions just as much as it is through words, and the more your employees feel engaged, the more likely they will embody your company culture. When employee engagement works well, this becomes a self-reinforcing virtuous cycle, which ultimately will translate into a firm becoming more profitable, more efficient, and a great place to work.