RECOGNIZING THE BUSINESS CASE FOR ENGAGEMENT
RECOGNIZING THE BUSINESS CASE FOR ENGAGEMENT
One of the challenges of engagement is recognizing benefits of engagement and the costs of non-engagement. There is a strong business case to make for engagement and the investment that is needed to create a culture of engagement. If you look at most organizations that have earned a “ best place to work” designation, you will find a common feature: employees who are highly engaged and who engage their customers. Whatever definition one chooses, having more engaged employees should lead to better performance and a variety of improved business outcomes. Yet in many organizations, employee engagement is not a recognized, serious initiative that is viewed as having a measurable return.
Research on engagement, positivity, and happiness in the workplace indicates that engagement and happiness are the precursor to achievement and success rather than the other way around! The research indicates that engagement, optimism, and happiness often provide the energy, focus, motivation, and quality of interactions that drive accomplishment.Research suggests that engagement, positivity, and happiness is important in the workplace, because it relates to: increased positive psychological capital; increased wellness, performance, productivity, & profitability; decreased stress, burnout, disengagement; increased customer engagement, satisfaction, and loyalty.
In making a business case for engagement, it is important to:
Characteristics of more engaged workers include higher levels of productivity, fewer quality incidents, lower absenteeism, reduced employee turnover, higher job satisfaction, motivation, positive organizational and interpersonal behaviors, and commitment.
1. Higher Productivity.
2. Fewer Quality Incidents. Organizations with a highly engaged workforce have 41% fewer quality incidents (lack of defects, wrong information given, etc.)
3. Lower Absenteeism. Organizations with a highly engaged workforce have 37% lower absenteeism.
4. Reduced Employee Turnover. Among high turnover organizations, organizations with a highly engaged workforce have 25% lower turnover. Among low turnover organizations, organizations with a highly engaged workforce have 65% lower turnover.
5. Higher Job Satisfaction:
6. Higher levels of Confidence & Motivation:
7. Demonstrate more Positive Organizational Behaviors:
8. Better Personal Relationships:
9. Higher Commitment. Compared with disengaged employees, employees who are highly engaged are 480% more committed to helping their organization succeed.
10. Recommend Company to Others. Highly engaged employees are 370% more likely to recommend their company as an employer, which increases the chances of the organization hiring additional highly engaged workers.
11. Recommend Improvements. Highly engaged employees are 250% more likely to recommend improvements that can benefit the organization or work team.
Characteristics of more engaged workers include higher levels of empathy, more powerful emotional connections with customers, increased customer satisfaction, improved customer metrics, and increased levels of customer loyalty.
1. Engaged Employees Relate More Effectively to Customers:
- Demonstrate more empathy.
- Make better emotional connections.
- Increase customer engagement
2. Customer Satisfaction. In a study conducted by Serco, Inc., increased employee engagement was accompanied by a 12% increase in customer satisfaction.
3. Customer Metrics. Organizations with a highly engaged workforce have 10% higher customer metrics (customer satisfaction, net promoter score, etc.).
4. Loyal Customers. More than 86% of organizations with higher levels of engagement agree that an engaged workforce is a key factor in creating loyal customers.
Characteristics of companies with higher levels of engagement include higher levels of profitability, stock market performance, and business success.
1. Profitability. Organizations with a highly engaged workforce have 22% higher profitability.
2. Stock Market Performance.
3. Business Success. Business or work units that score in the top half of their organization in employee engagement have nearly double the odds of success as those in the bottom half, and those in the 99th percentile have four times the success rate of those at the 1st percentile.
The Engagement Culture is a term that we use to describe an organizational culture consciously designed to enhance engagement on the part of the people who work within the organization and the customers who interact with the organization. It is a culture in which managers and staff effectively use their emotional and social intelligence skills and the resources of their company to create a positive atmosphere in which individuals can thrive as well as provide high levels of service to their customers and to each other.
“ To win in the marketplace you must first win in the workplace.”
- Doug Conant, CEO of Campbell’s Soup
A number of studies emphasize the fact that a workforce of highly engaged employees is the product of company culture. Simply creating a culture that is primarily customer-centric is not the way to get the perceived benefits of such a culture. The critical missing ingredient in a total customer-centric culture is the workforce, which is the delivery mechanism for service to the customer. Research confirms that Corporate Culture ultimately determines the level of employee engagement, and higher levels of engagement occur where the culture is both employee-centric and customer-centric, but not in organizations that are primarily customer-centric.
A CULTURE THAT ENCOURAGES ENGAGEMENT IS BOTH
EMPLOYEE CENTRIC AND CUSTOMER CENTRIC
According to one report, “The formula for creating and nurturing employee engagement is simple, but the execution not always so easy.“ It requires the intentional wooing of employees to an emotional level of commitment. They must see a connection between the organization’s success and the fulfillment of their own, personal dreams and goals.”
Engagement Culture and The Engagement-Profit Chain. The Engagement Culture concept Is a key component of employee and customer loyalty. This concept is informed by research done originally by a group of scholars from Harvard University who studied over 3500 organizations. Their research demonstrated the causal link between employee engagement and well-being, superior customer service experiences, customer loyalty, and financial performance. The original model was called the Harvard Service-Profit Chain. Additional research has indicated the strong impact of engagement and positive emotion in the causal chain that leads from manager and staff engagement to higher profitability and shareholder return, and currently this causal chain is sometimes referred to as the Loyalty-Profit Chain or the Engagement-Profit Chain.
The basic message of the research is that an organizational culture that consciously encourages engagement leads to engaged employees who thrive—they are happier, more productive, and more effective with their peers, managers, and customers. This higher level of positive emotion and productivity leads to better interactions with customers, and higher levels of customer satisfaction and customer loyalty. This leads to fewer lost customers, and more customers who recommend and promote the company, which leads to higher levels of revenue, profitability and shareholder value.
A number of research reports have been published on the impact of employee engagement and customer engagement. For a summary of a number of these reports, you may want to read the White Paper entitled The Business Case For Engagement, (LINK TO ARTICLE) which you can find in the “ Why it Works” section of this website.