Employees are the lifeblood of any business. They drive revenue, increase productivity, and create customer loyalty. But if they aren’t engaged, they won’t be happy or loyal. How can human resources managers improve employee engagement within their company, and in turn, increase profits?
What Is Employee Engagement
Employee engagement describes a person’s attitude towards their organisation and its values. Engagement is a composite measurement of employee commitment to their organisation, how hard they work, and how long they stay because of their commitment.
The Gallup organisation suggests that there are three types of employees:
1. Engaged: employees who work with passion and feel a profound connection to their organisation. They drive innovation and move the organisation forward.
2. Not engaged: employees who attend and participate at work but who are time-serving and who put no passion or energy into their work.
3. Actively disengaged: employees who are unhappy at work and who act out their unhappiness at work. These employees undermine the work of their engaged colleagues on a daily basis.
Workplaces should prioritise employee engagement – after all, why wouldn’t they want employees that feel passionate and energetic about the work they’re doing every day? However, with only 21% of the global workforce reporting they feel engaged at work*, there is a clear need to bridge the gap further and improve rates.
Why Employee Engagement Is Important
Whether employees are engaged within their company plays a big role in the success of the company. Employees are at the heart of the business and are part of the everyday mechanics of running a business. When any one part, or one employee, of these mechanics starts to shut down, so can the whole system.
Businesses that have higher rates of employee engagement generally find higher rates of the following:
Customer service improves
For sales and customer-facing teams, it’s important that they believe in the company and what they’re selling, to be able to convince customers that they should be investing in the business, too. An engaged team member will also go above and beyond in customer service in a business they are thriving in. If they are coming in every day not wanting to do the work, they will do the bare minimum they can, and customers can notice this.
Engaged employees are a vital part of running a profitable business. Teams with high employee engagement typically result in a 23% difference* in profit than those with low engagement. In fact, employee disengagement costs the Australian economy $2 billion every year according to a study by Gallup.*
When employees are engaged, they want to be at work. If a good business and HR manager are ensuring mental well-being is a priority, there will be less time away from the office for mental health days and employees will want to return to the office quicker after sickness or leave. According to a report by the Australian Industry Group, the Australian economy loses $7 billion due to absenteeism every year.
The more people’s workplace needs and wants are satisfied the more they become engaged. The more they become engaged the greater their discretionary effort – effort above their job description. This is particularly shown in the extent to which they give their time and talent beyond their remuneration package.
Download our FREE HR Course Comparison Guide
Find valuable information on the latest HR industry news, different HR jobs to pursue and a course comparison chart to help you pick the right HR course!
When Employee Engagement Is Low
Of course, not all employees are engaged. In Australia, employee engagement rates have dipped lower in recent years, with only 17% reporting feeling engaged* within their workforce. How do employees become disengaged? And what are the adverse effects of employees disengaging at work? There are social and profitable consequences within the office and beyond when employees become disengaged.
Some studies suggest that employee engagement has fallen while working from home has become more commonplace. This signals the importance of managers understanding the different needs and wants of employees as our world, and workplaces, change.
Negative stress also has a very adverse impact on employee engagement. Management has both a legal (legislative and regulatory) and ethical (corporate governance) obligation to provide a safe workplace. This requires preventative measures to be implemented to ensure that the causes of stress are eradicated or minimised once identified.
In 2021, the global stress of workers reached an all-time high. 40% of Australians* surveyed said they felt daily worry during their workday, and 44% felt daily stress. While it wasn’t always directly about work – they were certainly stressed at work. And while sadness and anger went down, stress went up.
Employee Engagement Strategies
Close to one-third of CEOs* identified the HR activity of “engaging employees in the company’s vision/values/goals” as one of the three factors most important to their company’s success. There is no doubting the vital role human resource managers and leaders play in boosting employee engagement.
Leaders can provide better engagement strategies through:
Creating an environment where people feel valued
If you want to keep your top talent, you need to make sure they’re engaged with your company’s mission and values.
Giving them opportunities to grow
In order to retain employees, you must give them opportunities to grow. This means providing training and development programs, as well as offering flexible work schedules.
Providing training and development
Training and development programs help employees learn new skills and develop existing ones. These programs should be designed with the needs of the individual in mind. For example, some people thrive when they’re given the opportunity to teach others. Others prefer hands-on learning experiences. Still, others enjoy self-paced courses. Whatever type of program you choose, make sure it’s tailored to each individual’s strengths and weaknesses.
How Culture Improves Employee Engagement
Increasingly, CEOs are seeing the link between corporate integrity and values. Engaged employees and reputation are vital to competitiveness and profitability. Coupled with strong leadership, a positive company culture makes all the difference when driving employee engagement rates and more.
Australian research conducted by the Independent Commission Against Corruption found that the ethical tone of an organisation impacts:
- Efficiency and effectiveness
- Decision-making processes
- Staff commitment and job satisfaction
- Staff stress and staff turnover
This research also determined that strong, clearly stated values could guide people through choices so that making ethical decisions was the path of choice. The bottom line from this research was that ethical practices can optimise the efficient functioning of an organisation. Ethics are good business.
To be successful, managers, supervisors, and leaders of all kinds, need to focus on making their organisations truly great places to work. There is a shifting focus to developing future generations of ‘work happy’ employees – individuals who are genuinely challenged, committed, and engaged. For many organisations, employee engagement could be the ‘holy grail’ solution to both talent retention and profits.
If you’re ready to develop strong strategies to retain employees and keep them happy, our Diploma of Human Resource Management (BSB50320) will afford you the skills you need to be a stand-out HR professional.