Engagement During Difficult Economic Circumstances

Posted in : HR Updates on 23 April 2012
Anne Dougan
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Anne Dougan writes:

Many HR professionals and business leaders have been failing on Engagement Strategy. We challenge readers to think about their own contribution. Having touched on the importance of focusing on Engagement Strategy in our November article, we wonder, have things moved on any? 

The UK economy is struggling to recover from recession, a recession which has left many people either out of work or wondering about the stability of their jobs. Part of the recovery which, we are promised, will come sooner rather than later, will be dependent upon galvanising the efforts of an often disenchanted workforce through a meaningful and targeted Engagement Strategy. As a reminder Engagement Strategy is defined as:

‘A workplace approach designed to ensure that employees are committed to their organisation’s goals and values, motivated to contribute to organisational success and enhance their own sense of wellbeing.’ 

And yet across the board, experts are seeing a widespread failing of HR and business leadership to drive through tangible improvements in engagement and an inability to convince the top team to focus their efforts on something which has a proven impact on the bottom line. Why? Perhaps the squeeze on finances created in all sectors by the current economic circumstances is part of the excuse. 

Are leaders wrongly equating Engagement Strategy with a costly reward strategy? 

The link with performance outcomes

Here’s a brief reminder of some facts linking Engagement Strategy with performance which were outlined in the well documented McLeod report on Engagement. Gallup in 2006 examined 23,910 business units and compared top quartile and bottom quartile financial performance with engagement scores. They found that: 

  • Those with engagement scores in the bottom quartile averaged 31 – 51 per cent more employee turnover, 51 per cent more inventory shrinkage and 62 per cent more accidents.
  • Those with engagement scores in the top quartile averaged 12 per cent higher customer advocacy, 18 per cent higher productivity and 12 per cent higher profitability.

In addition McLeod reported that: 

  • Engaged employees in the UK take an average of 2.69 sick days per year; the disengaged take 6.19.
  • Seventy percent of engaged employees indicate they have a good understanding of how to meet customer needs; only 17 percent of non-engaged employees say the same.
  • Engaged employees are 87 percent less likely to leave the organisation than the disengaged.
  • Engaged employees advocate their company or organisation – 67 per cent against only three per cent of the disengaged. Seventy-eight per cent would recommend their company’s products or services, against 13 per cent of the disengaged. 

The recession can and should be a catalyst for re-connecting with your employees, reminding yourselves as an organisation about what you stand for and what you expect of each other in order to secure long term sustainability.

Be clear on identity

Engagement Strategy starts with a strong sense of what the organisation is about and what your mission and value set is. Only then does this have a chance of being understood, transmitted and reinforced by senior and line managers in particular. Is part of the problem a lack of identity? 

In the midst of the recession have we lost our way? 

Employers who score highly on engagement tend to have developed a clear brand with an underlying culture which employees can experience and can describe. There will be a set of clearly articulated values which are consistently communicated and are demonstrated and modelled by the top team and line managers. 

Resources are tight, which has meant we are depending upon significant discretionary effort from our people. Discretionary effort comes from engaged employees. It’s pretty simple. 

Communication is key and it doesn't have to be good news

Honest communication about tough times, about difficulties with cash flow and the need to find efficiencies in partnership with employees has a greater likelihood of engendering collective efforts to turn things around, than failing to share the realities of the situation and leaving employees wondering how stable their jobs are and what is being discussed behind closed doors. Its common sense, people need to know they have a part to play in your survival and prosperity. We need to let them know that their efforts are valued. 

The best things in life are free

Two of the top three factors which are said to impact engagement levels are ‘challenging work’ and ‘opinions being valued’. Neither of which has any cost associated. Right Management's Managing Director, Jayne Carrington, says:

"A disengaged workforce shouldn't simply be accepted as a by-product of the recession. As we all eagerly anticipate a period of recovery, employers will face a number of challenges, such as staff turnover, low morale and talent shortages, which still remain a key issue for many organisations, many of which have had to undertake downsizing activities as well."

If you do nothing else, focusing on manager competence will be crucial in re-engaging your people. How confident are your line managers? Identify those who will need additional training or coaching to improve their ability to engage successfully, particularly through regular open and honest dialogue with their team and having the confidence to empower direct reports to take ownership for adding value in difficult trading or operating conditions.

Think about the four broad enablers that are reported as critical to gaining employee engagement. What are you doing to reinforce each of these? Remember that none of them need to involve any financial burden but will help secure sustainable improvements in performance. These are:

  • Leadership - employees need to understand not only the purpose of the business but also how their individual role contributes to that vision.
  • Engaging managers - engaging managers offer clarity for what is expected from the employees, treat their people as individuals, with fairness and respect.
  • Employee voice - employees' views should be sought out, listened to and employees made to feel that their opinion count.
  • Integrity - if an employee sees the values of the business ingrained in the management team, a sense of trust is more likely to be developed.

In November we suggested some of the following strategies to improve levels of engagement: 

1. Find out where you are starting from. 

Take steps to discover the current situation and provide a starting point from which to monitor and measure improvements in engagement in relation to performance. This will be important in getting buy in from senior stakeholders. Schedule one to ones, encourage ‘open dialogue’ and discuss the commitment to re-engaging those who may have become disillusioned. Conduct an anonymous survey to get an understanding of the real issues. Formulate an action plan, focusing on key issues. Repeat the survey annually to track improvements and identify areas which require focus.

2. Focus on Manager Competence. 

It is important that employees feel that their ideas are valued and that they can make a valid contribution to decision making. Line managers should be consistent in an approach to involving their teams and respond honestly to issues and feedback when raised, without creating fear of punishment. Regular opportunity for one to one time is an important element of engaging individuals. It is likely that some managers will be less comfortable with this approach and may need to be coached in how to adopt a more inclusive approach. Research has identified that Manager competence is the single most important factor in engaging employees. Making time, fairness, setting challenging but realistic targets and encouraging job discretion are all important factors.

3. Leaders as role models. 

Employees will take their cue from the behaviour and commitment of senior people. Consider whether the organisation is clear about its direction, its goals and values. Have these been well and regularly communicated? Do leaders model their passion and commitment?

4. Wellbeing. 

Engaged employees report a sense that the employer is concerned for their wellbeing. This may come in many forms including regular assessment of stress factors such as workload, levels of job clarity and autonomy. You may also consider encouraging employees to improve their health and fitness via awareness sessions and providing free information. Larger organisations may stretch to a wellbeing policy which may include gym sponsorship or private health care options.

5. Provide opportunities for growth. 

Turnover may have reduced in recent years across many organisations and there may be fewer opportunities for promotion. It is important to look for ways in which employees can continue to grow. Consider the use of talent programmes, project work, job rotation and acting up positions. 
Ed Sweeney, chairman of ACAS has said:

"The recession means that a lot of businesses have experienced a challenging period. Inevitably, this has had a knock-on effect on employees and morale. As we approach what might be the beginning of the end of the downturn, business leaders and managers have a responsibility to encourage an open business culture.”

The market is fiercely competitive and we need our people to be close to the customer and advocate our business or services in all their interactions. It follows then that Engagement Strategy must be a priority for survival. We need our people to lose any sense of indifference. We need to get the passion back. When recovery does take hold, those employers who have taken tangible steps to improving engagement will be in a better position to retain their talent and build upon the momentum. Those who do not may face an uphill struggle to compete and a potential mass exodus of any talent which remains.

This article is correct at 10/11/2015

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.

Anne Dougan

The main content of this article was provided by Anne Dougan. Contact telephone number is +44 (0) 7739 188564 or email Anne.Dougan@thinkpeople.co.uk

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