Employee engagement is more than just a new, cool concept in Human Resources Management. People spend two-thirds of their daily life at work. So, their need for work satisfaction is nothing but legitimate.
Staff Engagement is mainly about:
- Giving people roles that best suit them
- Making people feel like their contributions adds value to the organization
- Rewarding people for their efforts
The American work scenery is far from that ideal, though. Almost 70% of Americans are not very fond of their job, according to a study carried out by Gallup.Inc.
How come many managers do not focus on staff satisfaction? It may be the fact that they do not fully picture its impact on the business.
Once leaders understand the following significant benefits, they should take action. They need to make it their core goal to improve employees' well-being.
1. High Retention Rate & Commitment
Does this sound like a trivial reason for employee engagement? You should check with your CFO about the real costs of people leaving the company too easily.
- Extra costs for advertising and hiring
- Gaps in the work process
- Additional expenses for training newcomers
- Decreased performance quality and customer service flaws. It may take a few months up to one, two years for a new employee to reach the quality standards of the previous one.
All the above translate into money. High turnover rates produce many changes that decrease productivity and increase overall costs. It may even cost you the entire business.
Apart from the financial side of the matter, there's also a motivational aspect. People who are satisfied with their job tend to be more loyal.
They commit themselves to putting in their sweat and tears for the sake of the organization.
Plus, engaged employees tend to follow business goals, rather than their financial ambitions. They care less about time sheets and more about completing a task successfully.
There's a funny thing about creativity. It seems to flourish when people feel good about themselves and the environment they work in. According to The Gallup Study, engaged staff:
- Come up with most of the innovative ideas
- Create most of a company's new customers
- Have the most entrepreneurial energy
Wow! Who would want to miss out on the opportunity of growing a business?
The key is to invest in your staff's strengths and give them opportunities to put their skills to use.
3. Great Business Culture and Reputation
Happiness is contagious. Employees who enjoy their work tend to have a positive influence on their colleagues. I don't mean in a chirpy kind of way.
It's just that satisfied people are comfortable enough to engage and motivate other team members. They generally create a friendly and open work environment.
Engaged employees also focus more on the overall company's goals. That's why they make good team players. They want to involve others in the process of reaching those goals. All this attitude builds a strong base for an amazing company culture.
Here's the other side of the coin. No business should ever underestimate the power of word of mouth advertising. People talk to others about their work experience in a company.
What sort of reputation do you wish to create for your organization? This aspect touches essential areas of your business:
- The ability to attract a valuable workforce.It's quite simple. High performers avoid bad work environments. They look for companies that ensure stability and proper use of their skills.
- Credibilityin its relationship with partners. It's only natural to assume that corporations may treat their partners poorly if they do the same with their employees.
- Building customer loyalty. Most buyers these days are savvy and value-oriented. There's a high chance that they might stop buying products or services from companies with a bad reputation.
Who could have imagined that employee engagement had anything to do with work safety? Apparently, it does. It may not be clear why. The facts revealed by Gallup in their State of the American Workplace Report are quite impressive, though. It seems that companies focused on staff engagement have:
- 50% fewer work accidents
- 25% lower staff health care costs than those with poor human resource management.
There's also the problem of absenteeism. People who feel frustrated or under pressure tend to get sick more often than the happy ones. That means more sick leaves which lead to additional health security costs.
These facts take the people management problem to a much higher level: National costs. So, try investing in building employee engagement for your company's and the national health budget' sake.
5. Employee Engagement Boosts Profit
In the end, healthy human resources management comes down to money and profit. The Gallup Study confirms this idea. It shows that companies with a 9/1 ratio of engaged to disengaged employees have had 147% higher Earning per Share compared to their competitors.
On the other hand, organizations with much lower staff engagement have had lower EPS. So, it's not just that a company with less satisfied people doesn't grow as much. Facts show that it actually goes down.
Gallup Business Journal presents an incredible case study of Fabick CAT manufactory. After investing $500,000 in their staff, Fabick CAT made $3 million in return. There's a whole story behind this case. One that many managers should read.
Of course, it's hard to turn such examples into general principles. However, it is agreed that a healthy staff management culture tends to produce excellent returns for a company.
And, no matter how much money you choose to invest in your people, the payoff will be greater.
Looking again at these arguments, I hope you can see the importance of people for your business. They are in fact the main competitive advantage you may have on the market. People are the starting point of your business (r)evolution!