Are your employees engaged?

October 1, 2007

By Davis Klaila, Ceridian senior director of Strategy and Research

Employee engagement is a hot topic these days -- and for good reasons. Research shows that disengaged workers cost U.S. businesses between $270 billion to $343 billion each year.

On the flip side of the coin, engaged employees can have a positive effect on the bottom line. Engaged employees are three times more likely to stay at their current job than employees who are disengaged; and 73 percent of organizations who have initiated engagement programs have seen an increase in their operating profit. (Source: T. Welbourne, 2007)

Despite these positive results, many organizations still don't have a dedicated employee engagement program that is linked to financial performance.

Too many unengaged employees
Unfortunately, a majority of employees in the United States are unengaged in their work. Industry studies have found that within an organization:

Engaged employees represent only 29 percent of the workforce. This group works with a passion and feels a profound connection to the organization. They drive innovation and move the organization forward.
Not-engaged employees represent 54 percent of the workforce. They have essentially "checked-out," and sleepwalk through the workday. They put in their time, but they have no energy or passion for their work.
Disengaged employees represent 17 percent of the workforce. They are not just unhappy at work, they act out their frustration and continually undermine the work of their engaged coworkers.

(Source: T.Welbourne, 2007)

While the issue of engagement is generally presented in terms of the employee, the behavior of the employer plays an integral role in driving that engagement.

What does employee engagement really mean?
Employee engagement is the rational and emotional connection individuals have with their job, manager, team and organization. The rational connection is the extent to which employees believe that managers, teams or organizations are in their financial, developmental or professional self-interest. The emotional connection is the extent to which employees value, enjoy and believe in their jobs.

Attaining engagement is the result of a relationship between an employee and employer that demonstrate:

Connection because leaders show they value the employee.
Contribution and input matter.
Credibility through a shared set of values.
Change resilience as employees accept the challenges of an ever-changing business climate.

What are the barriers to employee engagement?
The barriers to engagement fall into two categories: tangible and intangible. Tangible barriers include:

An aging workforce and a 25 percent overall decline in the workforce since the 1960s. The net result is an employee who is not as compelled to "make it work" in the absence of engaging management.
An overall decline in the skill sets found in the workforce. Literacy rates are declining. The United States produces fewer scientists and knowledge workers. Employers have not stepped up to the training and development challenge as fewer than one in 10 workers are involved in active, ongoing development and training programs that align with business objectives.

(Source: U.S. Bureau of Labor Statistics, 2006)

Intangible barriers include:

The Center for Creative Leadership (CCL) reports the single greatest competency an executive needs for driving success and engagement within their organization is interpersonal communication. Yet nearly every executive in CCL's study on competencies falls far below the required level for communication skills.
Studies show that experiential learning programs that engage employees in a set of exchanges that reinforce engagement are rarely provided. Instead, programs are used that utilize rote learning methods to tell employees what to do -- even though such programs have proven to be unsuccessful.

What can you do?
The levers for engagement are connection, contribution, credibility and change resilience. Applying those levers and creating engagement is a three-step process. The quality of, and investment made, in each of these steps will demonstrate your credibility and determine your success.

The first step is to create an employment brand strategy. This is an image of the organization as seen through the eyes of the employee and potential employees. The brand allows an employee or applicant to connect to the organization and encourages pride. This should not be a one-size-fits-all model because your organization and employees are diverse. It is important to connect all employees to some facet of the organization.

A roadmap for employee engagement begins with leaders articulating a clear vision of the company's direction and how each employee contributes to the success of the organization. Once this process is under way, continued executive and employee involvement and communication is key.

The final step is to make engagement stick. Best practices may include:

Improvement process programs -- such as Six Sigma -- to drive productivity.
Competency development to ensure that individual growth and development is in line with current and expected requirements.
Reward and recognition programs that reinforce the desired behaviors.

Employee engagement is about trust. Trust is a simple thing and is gained via consistent behavior over time. As you explore employee engagement, think about what it takes for you to develop trust with a person, process or organization. While you may have certain criteria for building trust, each trust-building circumstance is unique and built upon past experiences -- good and bad.

A common approach to employee engagement is to repackage existing materials and make assumptions around employee satisfaction. This approach -- while convenient and cost effective -- rarely achieves the desired results. What it really demonstrates to employees is a lack of commitment to engagement.

Employee engagement directly addressed issues surrounding employee commitment and contribution resulting in tangible financial benefits. And, an organization's credibility may be judged by the commitment made to this endeavor.

Davis Klaila is senior director of Strategy and Research at Ceridian. He has more than 25 years of experience in strategic planning, innovation and organizational excellence. He has worked with a broad spectrum of public and private sector organizations to help them to define and achieve their business and mission strategies. Klaila has a doctorate in psychology with a specialization in decision theory.

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