What exactly is employee engagement and why does it matter? Employee engagement refers to the additional discretionary effort that employees bring to work. Frankly, there is no better time than now to grasp the criticality of optimised human capital in the new world of work. But what is the impact of disengaged employees on the bottom line? Our research reveals clear causality between low employee engagement and poor productivity, which in turn retards societal and economic growth. The impact of disengaged employees on productivity in the UK during 2019 alone, amounted to an estimated figure of between £52 billion and £70 billion. The bottom line is that employees with high states of engagement are instrumental in productive, high performing and sustainable organisations. Yet many, even some well-known and very large companies who profess to do ‘’engagement surveys’’, neither has the statistical capability nor a proper peer reviewed model to calculate and validate the costs of low engagement and to demonstrate clear causality between the desired employee engagement state and its academically researched root causes.
When discussing topics such as employee engagement, we often hear “so what’’, and then witness a casual proceeding with business as usual, hailing the topic as ‘’soft and fluffy’’, followed by outsourcing the responsibility for building a healthy organisational climate to the human resource function. It is only possible for employees to function optimally when the right level of attention is given to the building blocks of a healthy and enabling work environment. This is a leadership task, with business sustainability as a measure off the effectiveness of this task. Why? Because employee engagement, if properly measured, understood and addressed, answers a fundamental question about the capability of a business to act on its strategic intent – or not! There is nothing ‘soft and fluffy’ about this, as the King IV governance framework with its intent on business sustainability declares in no uncertain terms.
Research conducted by Indigo Skye and our associates, revealed that South African businesses, on average, benefit productively from a measly 15% of employees that are highly engaged, 67% moderately engaged and 18% actively disengaged. We call this presenteeism, where the main driver for showing up at work is only the pay cheque at the end of the month. For some of our larger clients, we have achieved massive productivity and profitability increases, followed by effective intervention design and implementation that had proper statistical modelling and analysis as a foundation, with clear causality to root causes and business performance. In one of our smaller clients, (a large medical practice), we returned R12 million on the bottom line due to reduced resignations of key medical specialists, in another larger client with 3500 employees, we calculated a productivity loss arising from low engagement at 7.4%, equating to a loss of R 3,9 million per month. In yet another client, we could estimate the risk arising from stress and related disengagement as a massive contribution to the delayed implementation of a multi- billion ERP implementation project.
In conclusion, understanding the level and root causes of disengagement amongst employees are crucial if businesses want to embrace change, be more innovative, productive, agile and profitable. Many make effort in measuring employee engagement, only to fail at properly identifying the root causes, others fail at prioritising what matters most and yet others fail to take remedial action on the findings. Considering what global and extensive research indicate as key drivers of employee engagement, the measure hereof offers a window into leadership effectiveness, but only to those who are ready to embrace the results and take appropriate action. These are the businesses that will flourish, whilst others perish.
Are you up for the challenge?