By Louisa Moreton, Director of Employee Communication and Consultancy, SAS, part of MSLGROUP / Guru on the MacLeod employee engagement taskforce. This article was first published in the People’s Insights magazine The Future of Employee (Re)Engagement, and is re-published below.
Academics and practioners have been making the case for employee engagement for many years. From the approach to employee welfare and personal improvement taken by Cadbury and Rowntree back in Victorian times to today’s employee engagement surveys and focus, and models such as the Service Profit Chain, many people have instinctively felt there is a business case for employee engagement and have sought to quantify it and make it happen.
In the UK, the last (Labour) Government took this a step further and commissioned a former Marketing head, David MacLeod, to build the definitive business case and practical guide to engagement. He started a movement, convincing companies, consultancies, research houses and academics to share all the evidence they had relating to employee engagement.
The movement, known as Engage For Success, has been given momentum by its members: “gurus” (consultants and academics) and “practitioners” (those working in-house), and was launched by the current (Conservative- Lib Dem coalition) Government. The fact that it has transcended political parties underlines just how important employee engagement is seen to the UK economy.
David did three important things:
He targeted CEOs.
Whilst the HR Directors and Heads of Internal Comms are seen as key, it is the CEOs that can change organisational attitudes and behaviour by putting engagement at the heart of their business strategy. The sight of a dozen or so CEOs of large companies, many FTSE 100, talking to the prime minister about employee engagement was heart-warming to those of us who work in the area!
He called for evidence.
His call covered both quantitative/ statistical evidence and qualitative evidence in the form of case studies. The evidence is compelling and next time anyone questions the value of engagement, we have all the (impartial) evidence we need. A few examples are included below.
He catalysed a movement.
One that has its own momentum and can run itself. The gurus and practitioners have taken on work streams on niche areas associated with engagement and the website takes a wiki approach, asking people to share what they know and encouraging everyone to take what they need from the site.
Employee engagement in numbers – a snapshot
- 70% of engaged employees and 17% of the disengaged indicate they have a good understanding of how to meet customer needs (Right Management (2006), Measuring True Employee Engagement, A CIPD Report).
- PricewaterhouseCoopers have found a strong correlation between highly engaged staff and client satisfaction
- Business units that scored above the median on both employee and customer engagement were on average 3.4 times more effective financially (in terms of total sales and revenue performance to target and year over year gain in sales and revenue) than units in the bottom half of both measures (Fleming J, Coffman C, and Harter J (2005) ‘Manage Your Human Sigma’, Harvard Business Review).
- In 2006, Gallup examined 23,910 business units and compared top quartile and bottom quartile financial performance with engagement scores (Harter , J.K. et al (2006), Gallup Q12 Meta-Analysis). They found that:
- Those with engagement scores in the bottom quartile averaged 31-51% more employee turnover, 51% more inventory shrinkage and 62% more accidents.
- Those with engagement scores in the top quartile averaged 12% higher customer advocacy, 18% higher productivity and 12% higher profitability.
I’d encourage you to look at the full report – it’s clearly written and makes the ultimate case for engagement and you’ll find the statistics above and many more in there as well as case studies. It’s UK-based but many of the organisations cited are multi-nationals.