Employee Engagement – Why This is Really Important
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There is an old quip, “It is difficult to drain the swamp when you are up to your a*** in alligators!” This may strike a chord with you today, and, at a time when your business is struggling to survive, let alone thrive, you may feel bemused by the sudden focus on employee engagement.
As you struggle to maintain sales and generate the cash-flow needed to survive, this might seem like the last thing you need to think about. Let me assure you that it is not.
The fact is that if people are not fully engaged they are leaving something on the plate. This is waste and, with surveys showing levels of employee disengagement running at around 80%, is clearly significant and creates a ‘black hole’ of unrecognised and hidden costs.
The whole concept of lean management is about eliminating waste and yet this waste – the waste of human economic potential – is rarely considered.
But, before delving into the implications of this, let’s take a moment to ensure we share a common understanding of the term ‘employee engagement’.
The term can best be summed up by the story of President JF Kennedy asking a NASA janitor what he did and being told, “I help put people on the moon.” That janitor was engaged, and thus a fully engaged employee is someone who:
* Gives 100% effort;
* Is intellectually and emotionally bonded with the organisation;
* Feels passionate about the organization’s goals and values.
From this it is self-evident that if you don’t have engaged employees you are wasting a portion of your salary costs. However, the problem runs much deeper than that because there are additional consequential costs that arise from people not giving it their all. This is not the time and place to try to produce an exhaustive list, and I am sure you could create a list of your own if you really thought about it.
Suffice to say that employee disengagement is estimated to have cost the UK economy £59.4-64.7 billion in 2008, which seems to be consistent with earlier estimates that placed the drain on the US economy at around $300 billion. This is clearly why government is taking a greater interest in the subject, especially in the current economic climate. And, while your business may not be as bad as employee engagement surveys indicate, it could still be a problem that is causing you to hemorrhage hidden, unnecessary costs. So whether you are going through tough times, or not, this is certainly an issue that you need to be giving your full attention.
If, however, you are not convinced, let’s look at it from two other perspectives.
Firstly, let us assume that:
* You employ 100 people; and
* Your business conforms with the results of the latest employee engagement survey and thus has only 20% of your people engaged.
* The average disengaged employee contributes 60% of what they are truly capable of contributing to their work effort.
* For the purposes of this exercise, there is a standard measure of human power that equates to 1% engagement.
This means that people efficiency is effectively as follows:
20 x 100% = 2,000 ‘manpower units’
80 x 60% = 4,800 ‘manpower units’
Total 6,800 ‘manpower units’
Possible total = 10,000 ‘manpower units’
The simple arithmetic suggests that you are only getting 68% value for your total wage bill and are operating at a 68% efficiency level. Now of course the figures have no empirical value, but the logic does and has profound implications. Can you imagine what the effect on your bottom line would be if you could increase that figure?
Now let’s take it a stage further and answer the following questions for your business.
* How many executives does your business employ?
* How much time do these executives spend with your customers?
* How much time do these executives spend on day-to-day operational problems?
* How many people do you employ?
* How much time do they spend on the day-to-day operational problems?
* What is the proportion of executives to employees?
Now, when you have those figures in front of you, ask yourself who is expected to drive the business forward? If, like most organisations, you drive things from the top, ask yourself just how much resource you are wasting? And if you are, it is hardly any wonder that engagement surveys indicate employee engagement is running at only 20-25%.
Let’s hypothetically assume your organisation comprises the 100 people we identified previously, of whom 5 are executives. If you are expecting those 5 people to lead the way and develop the answers to all the strategic and tactical problems and come up with all the new ideas to move your business forward, you are effectively reducing your capability by 95%. That is worse than trying to fly across the Atlantic in a jumbo jet with only one engine operating!
However, it doesn’t just end there. Ask yourself how much management time is taken up with such issues as:
* Trying to improve productivity
* People related problems
* Resolving operational problems
* Trying to improve performance
Now ask yourself how effective your efforts really are? (And be sure to answer honestly – anything less is simply deluding yourself.) Then just imagine, how much executive time – and how much personal frustration – you would free up if you let go the false-responsibility and allowed people more freedom to resolve their own problems and come up with new ideas of their own. How much more successful do you think you business would be?
The key thing you need to understand here is that it creates a real win-win situation. People who are not allowed – implicitly or explicitly – to be responsible for shaping their own environment, will never be engaged. Consequently if you redress this latter scenario you will automatically simultaneously improve your employee engagement. The ability to bring the full intellectual and emotional power of your people will make your other challenges less daunting and place your business in a position where the risks of failure are considerably reduced and the prospects of sustained success dramatically improved.
Bay Jordan, author of “Lean Organisations Need Fat People” and “A Feeling of Worth,” is the founding director of Zealise Limited. Zealise helps businesses to value their people, offering a unique employee ownership system that creates greater employee engagement with better teamwork and strategic alignment that transforms performance and bottom line results. To find out more about how these breakthrough management solutions will help you and your business please check the website at http://www.zealise.com.
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