It is an investment we have to make for the privilege of future proofing our organization’s operational excellence, organizational agility, productivity, systematic and competitive innovation, organizational alignment and overall business performance.
If you truly want your business to succeed and compete effectively, you need to ensure that your employees are as focused and engaged as possible.
It is clear that today employees want to have more opportunities and better living conditions.
On the other side employers want to have sustainable competitive growth and profitability and at least keep their customer value in the market.
There are a lot of changes in technology, services, customer demands and living style. These changes are creating an uncertain, complex and highly competitive business world.
How companies should compete and achieve a sustainable growth and profitability in a globalized business world? This is a big question for leadership!
These are the some survey results.
- A recent Gallup’s State of the American Workplace: 2010-2012 Report that was written by Susan Sorenson and Keri Garman indicated that “70% of American workers are not reaching their full potential, 52% are not engaged, and another 18% are actively disengaged. Gallup estimates that actively disengaged employees cost the U.S. $450 billion to $550 billion in lost productivity year. Only three to ten American employees are engaged.
- A recent Gallup survey showed that 60% of Turkish workers are not reaching their full potential (not engaged), 33% are actively disengaged and another 7% are engaged.
All of the figures show that we have experienced an extreme decline in worker productivity. But overall productivity is going in the right direction. This is related to the used technology and better equipment by companies. Therefore, companies see the investment in people as a cost and they trust to the new technology and equipment.
Uncertainty and increasing hypercompetitive business conditions will force the companies to think about the employee recognition, motivation, training, development and engagement.
Because they are killing the productivity of their workforce. In reality, they need employee productivity for competition today and tomorrow. I have to say that the lack of alignment creates organizational friction and energy of people is wasted. Normally they have to use this energy on productive value-creation activities.
The truly innovative and competitive companies of future have to invest in leadership teams and their employees to ensure that their past investment in new technology, equipment and physical infrastructure produces a productive return. It is clear that technology and equipment have a shelf life.
Our productivity gains that we had over the last ten years, will not continue at the same pace into the next 5-10 years
According to my experience and knowledge in multi-industry, organizations have to develop and implement a new approach, they have to focus on the things that should be executed to create the most productive worker environment and achieve the perfect organizational alignment. Therefore, companies should;
- Communicate and engage people in a clear collective vision and agenda.
- Recognize people for work being achieved.
- Don’t work with the toxic leaders and negative employees.
- Recognize and respect to the value of employees personal life.
- Don’t allow inconsistent management practices.
- Invest in talent management and lower turnover.
In other words, employee engagement shows the efficiency of employees in expressing themselves cognitively, emotionally and physically during role performances. These are:
If employees engage with their jobs and employers, they are more productive according to researches. They work more efficiently to achieve a high performance organization. If they are highly engaged, they will output twice as likely to be top performers.
In 2009, Harter et Al. Conducted a survey and they detected that an 18% drop in productivity between top and bottom performers in employee engagement and there was a 60% drop in quality in products ( defects).
In another survey, Gonrig 2008, it was found that there was a serious 1,000 percent increase in errors among disengaged and engaged employees in Fortune 100 companies.
Higher Engagement will create lower absenteeism, higher focus, morale, trust and motivation. This will create increased productivity and efficiency.
In a survey made by Harter et Al. 2009, they found that absenteeism is 37% higher in scoring the bottom 25% on employee engagement and this will affect their productivity and overall efficiency.
Employee safety is another critical factor in obtaining a higher engagement. If employees are not engaged, they will focus less on their work and they will make mistakes. This will create serious implications for industries in which safety is an important factor for employees.
Harter et al. in 2009 found that top 25% performers in the engagement has 49% less safety incidents than the bottom 25%.
In another study it was shown that 70% of workplace accidents occur due to unsafe behaviours of employees.
Lockwood studied the average cost of a safety incident for a non-engaged employee was USD392 and for an engaged employee was USD63.
Please note that human and financial cost of safety incidents will cause serious issues about employee engagement and it will negatively affect productivity, product quality, organizational alignment and customer performance.
It is evident that engaged employees are less likely to leave their job. Because their emotional commitment is higher than disengaged employees.
In a survey, it was detected that the most engaged employees are 87% less likely to leave their organization. For example, this study showed that the average voluntary turnover rate is 13% in 100 best places to work while 28.5% in other business in the same industries.
Higher employee retention rate shows the impact of higher employee motivation, trust, morale and effective organizational alignment. So that companies will keep and improve their organizational knowledge and focus effectively on company purpose to create a high performance organization in a superior commitment.
4- Customer Loyalty
I have to say that every person in the organization are customers. They can recommend a business to others if they feel positive in the company. If they engaged well they become more customer focused. They are brand ambassadors. A survey showed that top 25 engaged organizations had 12% higher customer ratings. This is a big impact on business success. We are living in the world of social media, therefore we have to have highly engaged employees who they produce quality products and services and share their experiences in different social media platforms that we can’t control everything. They will interact with customers and share their experiences about company, products, services and culture. If employees are not engaged well this will create failures in long-term company success.
Higher Engagement creates higher voluntary efforts. This improves client service and contributes better customer experience. So that company will obtain increased customer loyalty.
I believe that an ongoing challenge for any firm is the retention of customers. Companies have to develop and implement a well-rounded strategy for building customer loyalty.
Employee engagement has a positive effect on profitability. Because employees are highly committed and focused in their works. So that employees will have effective communication, collaboration, trust, recognition and hard work to achieve the company purpose on time. The top 25% organizations in employee engagement had16% more profitability. This shows the importance of employee engagement about the profitability.
6- Competitive Innovation
I know that innovation is the primary driver of business growth, competitiveness, prosperity, economic development, social responsibility, environmental sustainability and national security.
According to the survey, conducted by MindMatters Technologies in February 2015, with 150 companies, only 5% of of innovation staff feel highly motivated to innovate. 77% say their ideas are poorly reviewed and analysed by their companies
Employee engagement is important to create an innovative culture in any organization. If they are engaged, they will work effectively, improve their work continuously and create a systematic innovation culture that contributes to a sustainable growth and profitability.
I have to define that senior leadership should focus on employee engagement and focus on the business risks, key contributors, engagement barriers and culture. Therefore, they have to ask the following questions and take necessary actions accordingly to achieve the highest performance.
- How engaged are the employees?
- What are the results of high engagement in terms of the productivity, innovation, operational excellence and organizational agility?
- How can we drive their full commitment and volunteer extra efforts for the job and the organization?
Leadership should understand work and lead employee needs and frustrations. They should assure rational and emotional commitment to achieve high performance and retention.
Please note that emotional engagement is four times more valuable than rational engagement in commitment to working effectively.
Another important point is the leader/manager activities and attributes that are enabler of employees’ commitment and focus to their jobs, teams, organizations and strategic purpose.
Employee engagement drives high performance and ensures long-term success of the business in growth, profitability, competitive advantage and higher customer value. A highly engaged workforce can increase innovation, productivity, and bottom-line performance while reducing the costs related to hiring and retention of people.
If employees are not engaged or actively disengaged, this negative wave will surround all the organization and kill the overall productivity of the company that includes the functions such as sales, marketing, manufacturing, supply, technical operations, leadership, finance and others. Therefore, sustain a high-engagement with your employees, create competitive customer value and decrease your costs.
Engage your employees, achieve 10% customer loyalty, a 21% productivity, 22% profitability, 41% less quality defects and 48% less safety incidences (Gallup Research).
How do you create and sustain a high-engagement with employees to achieve a high performance in your organization?
Yusuf Tokdemir is a business advisor and innovation consultant. He has a proven track record of success in multi-industry. He established Innovation Turkey as an innovation training and consulting services.
Innovation Turkey olarak amacımız girişimcilere ve firmalara inovasyon eğitimi, yeni ürün dizaynı, yeni iş dizaynı, büyüme, karlılık ve verimlilik konularında hizmet vermek ve rakiplerinden daha yüksek oranda ticari değer yaratmalarını sağlamak ve görmektir.
If you want to solve your company's problems and achieve a commercial outcome in your startups, new business design, new product design, employee engagement, organizational alignment, leadership development, innovation management, growth and profitability and create commercial outcomes across the value chain and industrial operations in Turkey or abroad, contact Yusuf through Linkedin or call from +90 533 3938268.