There must be something going on at Time magazine. In roughly a two-month time span they ran two articles about how businesses can thrive by paying more attention to employees. While this doesn’t sound like rocket science, I suppose in a business world seemingly driven solely by the needs of shareholders, it’s a refreshing shift in thought and (hopefully) practice.
Northwestern University released the first study on “employee engagement” back in 2004. The report, “The Impact of Employee Attitudes on Market Response and Financial Performance,” showed a link between employees who have no customer contact and increased customer satisfaction, and then further connected customer satisfaction with higher sales and profits.
These results caught most people by surprise. It was a given that while employees who interacted with customers and clients could directly impact a company’s bottom line, few thought that all employees’ attitudes could have a similar effect. A more recent study from Gallup Consulting, released this year, echoes these findings. Gallup’s research showed that engaged employees are “more profitable” and “more customer-focused.” They are also less likely to quit.
In a few short years, employee engagement has emerged as a hot industry for the big-name management consulting companies that have zeroed in on improving employee engagement in the nation’s top corporations. But there’s a lot that owners of small and mid-sized businesses can learn from the research.
First, more of the obvious. A look at several employee engagement studies shows essentially the same results:
- Employee satisfaction leads to employee engagement.
- Companies with engaged employees show improved financial performance.
- Employee attitudes and behaviors directly influence customer actions.
A 2008 report from BlessingWhite, a management consulting firm, found that only 29 percent of North American workers are fully engaged while 19 percent are actually disengaged, which leaves most workers in limbo. Other surveys report even gloomier results. DDI, a consulting firm specializing in workforce and HR issues, says only 19 percent of employees are fully engaged, while the Corporate Executive Board found only 11 percent of workers were “true believers.”
Logic and experience tell us that it costs our businesses less to retain current staff rather than constantly recruiting and training new workers. The BlessingWhite study reported that 85 percent of engaged employees plan to stay with their present employers. If your business can come close to this percentage, it will obviously positively impact your bottom line. The founders of Whole Foods Markets and the Container Store both recently told Time magazine that they started their companies with the idea of pleasing customers, but as their businesses grew and prospered, they shifted their priorities to their employees. Workers at these to companies receive higher salaries and better benefits compared to workers at most other U.S. retailers.
I know times are tough and it’s not likely you’re in a position to give your staff raises or increase their benefits. But the good news, according to the BlessingWhite report, is that it’s not necessarily the key to more engaged employees. It’s no surprise that the motivations for staying at a job differ between engaged and disengaged employees, but I found these motives interesting. According to the study, engaged employees stay at their jobs for what they can give (they like what they do), while disengaged workers stay for what they can get (job security).
You may think you have the upper hand right now. It’s hard to find work in recessionary times, so your employees might stick around just for the sake of having a job. But that doesn’t mean they’re working to their maximum level of productivity; in fact, it’s likely just the opposite. And their lackluster attitudes will likely reflect on your business’s financial performance. More important, when the economic pendulum swings back (and we all know it will) and workers have more jobs to choose from, you’re going to find yourself without a trained and knowledgeable staff.
It may seem counterintuitive, but instead of asking more and giving less to your staff, you can get a lot by giving a little. It won’t necessarily cost you much. Employees want to enjoy what they do. They want to know they’re making a difference by helping make your company successful, and they want to be valued and respected for those contributions. Try saying “thank you.” It sounds so simplistic, but most bosses simply don’t bother. It won’t cost you anything, but acknowledging your staff’s contributions can pay off, both in the short and the long term.