Category Archives: Workforce Engagement

The Real Cost of Disengaged Workers

While employee engagement has been the topic of several posts, including our previous one, it is less common to hear people speak in specific terms about the real, often hidden, costs associated with disengagement.

During recent meetings with our Partners in Improvement these costs were discussed in detail. The Partners concluded that disengaged employees create a negative and expensive ripple effect throughout an organization, and drive-up costs five specific ways:

  1. Higher turnover: Disengaged employees leave their employers as soon as they see a better opportunity. This turnover increases the costs of recruiting, on-boarding, and training, which typically range between 16% – 22% of salary for low-to-mid-level employees, and significantly more for higher-level executives based on a Center for American Progress study.In addition, every new hire brings a risk of a bad fit, and every employee leaving an organization takes with him or her some organizational knowledge that might have been helpful to that organization in future decisions.
  2. Lower productivity, lower profitability: Disengaged employees don’t go the extra mile; they do not make an extra effort when faced with a challenge, and don’t put forth the same discretionary effort that an engaged person will make. A 2013 article from the Harvard Business Review concluded that organizations that cultivate high employee engagement yield a 22% increase in productivity over the norm.
  3. Little or no process improvement: Improvement requires engagement — a willingness to design and conduct experiments, a willingness to take risks to try something new and potentially better. However, disengaged employees tend to focus on their personal agendas and see little upside in trying something new to forward the organization’s goals.
  4. Higher pay: When we say about someone, “They are only in it for the money,” we are observing disengagement. While money is important to nearly everyone, if that is the only motivation, there is no genuine engagement. As the behavioral economist, Dan Ariely, said, “Money is the most expensive way to motivate someone.” Organizations that are unable to create an environment that intrinsically engages their employees must pay them more to keep and motivate them.
  5. The associated cost of lost opportunities is difficult to calculate; but it is significant and probably far greater than any of the direct costs outlined above.

In our next post we’ll share five ways to reduce these costs.

Ten Things Engaged Workers Say…

Data presented by Gallup during a recent event was very compelling, and might well give organizational leadership some clear targets for better-engaging their workforce.

Based on the research shared, here are ten things that engaged workers tend to say:

  1. I’ve been recognized for my work in the past 7 days
  2. My supervisor seems to care about me
  3. Someone at work encourages my development
  4. My opinions seem to count at work
  5. In the past 6 months someone has talked about my development
  6. I know what’s expected of me at work
  7. I have the opportunity to learn at work
  8. I have the opportunity to use my strengths at work
  9. The company’s mission, values and goals make me feel that my work is important
  10. I have a best friend at work

Leadership, Engagement & Continuous Improvement

Leadership is getting people to want to do what needs to be done, and it provides the energy for change as well as the commitment to sustain it.

This aspect of leadership is critically-important if an organization hopes build and sustain culture of continuous improvement in which employees are truly engaged, and in which measurable improvement goals are achieved through people.

In a recent article published by Engagement Strategies Media, the connection between leadership and engagement was discussed.

“They’re connected because we can’t create the levels of engagement we would want and get all of the benefits we know can come from that without people leading…. we have to have someone leading us in the direction of this desirable goal of higher levels of engagement. They’re completely one hundred percent connected.”

The article goes on to explain that improving engagement scores requires intentional effort, and “most leaders, most organizations, aren’t placing a high enough priority on it to make that intentional.”

Thus a formalized, goal-oriented plan is a must… a concept that is presented in our “Engagement Around the Work” white paper.

Consider that people are much more likely to become engaged when they feel productive… when they feel like they are achieving success and that they are an important part of the organization’s success; when they feel that they have a voice in creating a better, more productive workplace.

By following proven Continuous Improvement methodology leaders and people at all levels can achieve measurable goals and higher levels of productivity; and this productivity leads to engagement.

Once leaders recognize that productivity leads to engagement, not the other way around, it becomes easier to allocate the necessary resources to sustain the Continuous Improvement effort. This means we must create a culture that is based on improving all that we do and which enables and empowers every employee at every level to make improvements through involvement and commitment — through being engaged!

Team Capability & CI

educationarrowsWhile identifying the right things to work on is a critical decision we must make each day, it is also important to have the right people with the knowledge and skills working on the right things.

Do managers at all levels understand how the strengths in our organization can form the basis for the creation of a systemic continuous improvement process?

Do people at all levels understand as well as use tools and charts to track progress, problems and opportunities for improvement?

Are people at all levels being developed and educated so as to engender engagement and loyalty?

The importance of providing employees with ongoing education and development opportunities is consistently identified as a necessary component of engagement, and also as a step in developing a culture of continuous improvement. People can’t improve the work or their workplace if they don’t know how… and people can’t move forward in a career path without learning.

educationIn support of this perspective, a recent article in Human Resource Executive magazine identified “continuous learning opportunities and personal development” as being two of the four key criteria (scheduling flexibility and social responsibility being the other two) recent graduates value most as they evaluate career options. Of course, the need to empower the workforce through education is not a new concept.

For example, a 2004 Harvard Business Review article, Capitalizing on Capabilities noted that what people respect about many of the nation’s prominent companies is not how they are structured or their specific approaches to management, but their capabilities.

“These capabilities—the collective skills, abilities, and expertise of an organization—are the outcome of investments in staffing, training, compensation, communication, and other human resources areas. They represent the ways that people and resources are brought together to accomplish work. They form the identity and personality of the organization by defining what it is good at doing and, in the end, what it is.”

Stop Chopping Trees to Sharpen the Ax…
But expanding workloads and limited resources can make it difficult to provide initial and refresher  training for both senior leaders, associates, and new hires.

Some organizations have addressed these issues by hiring external training partners, and others have turned to peer-education models by giving employees temporary assignments in different functional areas where they learn from co-workers while assisting with the work.

A great many more are relying on learning management systems (LMS) or e-learning, which has enabled them to maintain training and development programs in a manageable way as well. These systems address the administration, delivery, and tracking of education, and enable employees to learn in smaller “doses” in less time.

This advantage of the “e-learning” approach is significant. As outlined in a recent article on “Engagement Trends” by John O’Brien, Vice President, Employee Performance Group at BiWorldwide, “Train more with less.”

O’Brien suggests breaking-down material into smaller pieces that can be delivered on-demand, noting that this approach is consistent with evolving work habits and flexible schedules.

Keeping people at all levels educated, empowered and engaged is an important element of creating and maintaining a culture of continuous improvement which, when combined with consistent measurement, communication and recognition can lead to world-class performance and a competitive edge.
 

More Hidden Costs of Disengaged Workers

hiddencostsIn an earlier post we discussed the direct and “hidden” costs of disengaged workers.

Carrying-on with this theme, a recent discussion among a group of Continuous Improvement leaders included some additional perspectives on the real-but-often-hidden costs associated with disengaged workers:

  • Higher turnover: Disengaged employees leave their employer as soon as they see a better opportunity. The turnover increases the costs of recruiting, on-boarding, and training.
  • Greater risk: Every newly-hired person comes with the risk of being a bad fit, or worse!  Every employee leaving an organization takes with him some organizational knowledge that might have been helpful to future decisions.
  • Lower productivity: A disengaged employee does not go the extra mile or challenge the status-quo.
  • Little or no process improvement: Improvements require engagement, a willingness to design and conduct experiments, a willingness to try something new and potentially better.  Disengaged employees focused on their personal agendas see little upside in risking trying something new in an effort to forward the organization’s goals.
  •  Higher pay: When we say about someone, “They are only in it for the money,” we are observing disengagement.  While money is important to nearly everyone, if that is the only motivation, there is no genuine engagement.  Organizations that are unable to create an environment that intrinsically engages their employees must pay them more to keep and motivate them.

Possibly you have some ideas we might add to the list?

Update on Engagement & Work

engagementproductivity2We have found that engagement and productivity are inextricably linked, but not in the way people tend to think!

As presented in our “Engagement Around the Work” white paper, people are much more likely to become engaged when they are productive… when they feel like they are achieving success, that they are part of the organization’s success, and that they are learning.

As it turns out, productivity leads to engagement, not the other way around; and this is a fundamental principle that clearly explains why so many organizations have had so much trouble engaging employees over the years – leaders were unaware of the things their employees really valued.

The dress-down Fridays, healthy snacks, and free lunches were nice, but they didn’t motivate people and they didn’t result in higher levels of engagement or productivity.

Only recently has it become clear to forward-thinking business leaders that the path to sustainable employee engagement is to drive productivity, and to do so through ongoing education and empowerment.

In support of this perspective, a recent article in Human Resource Executive magazine identified the four key things that college graduates value the most as they evaluate career options:

  • Flexibility and work/life balance
  • Continuous learning opportunities
  • A socially-responsible employer
  • Room to grow and personal development

In that article, data from a PwC survey of 44,000 workers who had become less-engaged indicated that “71% said their jobs interfered with their personal lives, and 70% said they wanted to be able to work from home.”

Similarly, a September 16th letsgrowleaders.com blog post shared the plight and surprise of a call center leader who had tried everything to address poor morale – bagels, lunches, contests and games. In the end she was shocked to find, “They didn’t want more fun, incentives or even time off the phones. It all came down to one thing. They wanted us to take a hard stand on the slackers.”

“Letting slackers slide may seem like a short-cut to being likable,” author and Human Capital Consultant Karin Hurt said. “But such pleaser behaviors crush the spirit of those making the biggest impact on your team.” It’s apparent that those who want to be productive and successful do not want to work with those who don’t.

Also quoted in the post was Paul Rubenstein, a partner at Aon Hewitt who said that prospective employees “want to know about your commitment to lifelong learning and development.”

 

 

CI & Engagement a Successful Combination

productivityAndEngagementJust like Continuous Improvement (CI) has become a standard component of doing business for most organizations, the emerging field of Enterprise Engagement applies a strategic approach to designing and implementing programs that achieve clear, measurable results through people.

When no one could measure the economic benefits of engagement, it was a “nice to have.” But now, as summarized in a recent article published by Engagement Strategies Media,  it is quickly becoming an essential means for maintaining a strong competitive position, as market share tends to go to those organizations that are the most productive and that “wow” not only their customers but all of the people involved with their businesses.

Yet most companies lack formalized engagement strategies.

Fortunately the emerging field of Enterprise Engagement has led others to take a more strategic approach, such as Engagement Around the Work. Based on the simple principle that productivity drives engagement, which in turn drives greater levels of productivity, this process-driven methodology can bring about breakthrough results.

While implementation strategies will vary, here are five of the things we have seen organizations do to achieve greater levels of productivity and engagement:

  1. As with all change initiatives, get acceptance and buy-in from senior leaders. Little will be accomplished without this; the best results are achieved when leaders understand the benefits of engagement and take action.
  2. Create a formalized implementation plan and establish performance measures so that progress can be tracked. Develop realistic, achievable, and measurable goals and objectives.
  3. Work with the leaders so that they can model the right behaviors and cascade the concepts to their reports and throughout the organization. These behaviors include timely performance feedback, effective listening, and empowering people with education and support.
  4. Reward and recognize people so that they feel supported in their efforts.
  5. Measure return on investment.

Engagement Around the Work

Our previous post shared perspective on how productivity drives engagement, and that by enabling our workforce to become culturally-involved in continuous improvement we can promote greater levels of productivity which, in turn, yields greater levels of workforce engagement.

And so on…

Data clearly indicates that this outcome is most desirable, as organizations with an engaged workforce consistently outperform those without.

Here’s a short video that shares more details:

How Productivity Drives Engagement

productivityAndEngagementIn an earlier post we shared some of the reasons why so many organizations struggle to engage their workforce. Among the challenges cited was the failure to understand the link between engagement and productivity.

Based on research and experience, we have concluded that productivity drives engagement, not the other-way-around. By increasing employees’ productivity, you get increased engagement, and that engagement, in turn, increases productivity, and the other positive and measurable results that come from increased engagement.

A couple of supporting comments:

“Employee happiness and morale is NOT the critical path to employee productivity. but productivity and employee achievement are the critical path to high morale and a happy work environment. Morale and employee happiness aren’t the means to the end — they are the end itself.” —Morale and Motivation Myth…No Strings Attached

“Improving our work is what ultimately captures the mind, the heart and the spirit of employees.” —Results From the Heart by Kyoshi Suzaki

The concept of productivity driving engagement is one of the core principles of our approach to engaging a workforce and, ultimately, customers and the marketplace — it’s all about the work.

The Cost of Disengaged Workers – Part 2

hiddencostsContinuing with our previous post’s topic about the  often-hidden costs associated with disengaged workers, we found some very telling statistics published by the Enterprise Engagement Strategies Media

As you’ll see, the premise that disengaged workers are, in fact, very costly is clearly an accurate one.

For example, more than half of managers (52%) consider their employees less loyal than five years ago, according to a survey of more than 1,200 executives and managers by the American Management Association (AMA). Just over one-third (37%) perceive employees to be about as loyal as they were five years ago. The most telling statistic: Only 11% view employees as more loyal.

This trend is even more pronounced among organizations with more than 1,000 employees. Just over 60% of respondents at large organizations consider employees to be less loyal than five years ago, compared to 44% of respondents at firms with fewer than 1,000 employees.

Other highlights from the survey:

  • Declining employee loyalty is thought to harm organizations by causing low morale (84%), high turnover (80%), disengagement (80%), growing distrust (76%) and lack of team spirit (73%).
  • One-third (33%) of senior leaders believe employee loyalty has a direct link to profits.

Clearly it is in the best-interests of all (management, workforce and customers) for business leaders to put the proper focus on the value of engagement and the impact it has on the work as well as the workplace.