Does Employee Engagement Lead to Business Success?
Employee Engagement Improves Business Success
How can I make my company more successful? It’s a question that every business owner should ask themselves. There are numerous factors that determine the success of a business but one that should not be ignored is employee engagement. Studies on workplace culture and business success, including this one from Gallup, have shown a direct link between employee engagement and company performance. Secantor has recently co-authored a blog on the subject with Reality HR.
Why is Employee Engagement Important?
Most successful businesses recognise staff as one of their greatest assets. A committed, highly-skilled and engaged workforce often represents a key differential advantage over competitors. Many businesses simply could not deliver a first-class customer experience without a highly-motivated team. For almost all companies, employees are literally the face of the business to the customer, and as we all know, people buy from people. So it’s not difficult to see why a highly motivated and engaged workforce is essential for business success. You can read how one Secantor client’s transformed their business through excellent employee engagement in this success story. Just as this example shows, good employers don’t just engage with staff solely for the benefit of their business; they also recognise the important positive effect this has on the wellbeing of their staff. Of course, this also creates a virtuous circle.
Engaged Employees Deliver Improved Productivity and Performance
With staff representing one of the biggest costs for most businesses, it makes commercial sense to ensure that productivity is maximised. The Gallup workplace study found that firms with high employee engagement had an 81% reduction in absenteeism and an 18% increase in productivity compared to firms with the lowest rates of engagement. Similarly, the firms that engaged best enjoyed 41% less defects, 28% less shrinkage (theft by employees) and 64% less workplace accidents. Customer loyalty was also 10% higher at firms with the most engaged staff. With such a significant difference in productivity and performance, it is perhaps unsurprising that the top firms enjoyed 23% higher profits.
Employee Engagement Improves Staff Retention
It’s widely known that many businesses are currently having difficulties finding and attracting good staff. Scare resource coupled with inflationary pressure is resulting in businesses offering higher starting salaries to secure the best talent. Add to this the cost of recruitment itself; lost output caused by vacancies; time spent training new starters; plus the opportunity cost of management time distracted from developing the business and the total escalates. It all points to the importance of staff retention. Staff who feel engaged at work are far less likely to leave making this another good reason why managers should pay attention to the engagement of their workforce. A recent study found that 43% of employees have left a job because of their manager.
How To Improve Employee Engagement
As with so many things in life, there is no one-size-fits-all approach to employee engagement so it’s important that managers build strong, trusting relationships with their staff so they know what makes them tick. Having said that, here are several areas that will certainly help with the majority of staff.
Invest in Staff Development
Committed staff value having a career development plan in place that maps out their progression and skills improvement. Firms that invest in training & developing their team benefit from both a higher-skilled workforce and one that is better engaged. Succession Planning builds strength and value into every business but it also provides an excellent opportunity for staff development and progression. Internal promotion and delegation of management responsibilities to staff members who have been carefully selected and trained send a positive message to your entire team that commitment and capability are valued and rewarded. Just make sure you delegate effectively or it could backfire.
Develop Trust With Your Team
Every strong relationship is based on trust and it’s no different with your team. Communicate well and set clear expectations that are achievable and measurable. Job descriptions, objectives and KPIs are essential in establishing clarity around role responsibilities. Manage performance fairly ensuring that excellence is rewarded and underperformance is addressed. Ensure all your staff have regular one-to-ones with their line manager so staff are clear on their personal performance, can see progress on their career development plan and are listened to with their views taken seriously.
Rewards, Incentives and Recognition
Celebrating exemplary performance and behaviour not only recognises the individuals concerned, but also sets the standard for other employees to aspire to and becomes part of company culture. Aside from obvious financial-related rewards including pay rises, bonuses and share option schemes, there are numerous ways to incentivise and reward your team. Flexible working, additional holiday, job stability, career progression, perks & benefits and simply recognising excellent performance all increase staff engagement.
Improving Business Profitability
Excellent employee engagement will benefit your staff, customers and business so should be a priority for all SME owners/directors. It should form part of a wider strategy to add value to your business. We have several resources on our website to help you increase profit and improve business success. If you’d like to find out more about how a Secantor Non-Executive Director (NED) or Finance Director (FD) could impact your business please book a call with one of our experts.
For advice or to talk about Reality HR’s bespoke employee engagement programmes, contact the friendly and professional Reality HR team at info@realityhr.co.uk.
To ready the full employee engagement blog, please click here.
