The buzzword you can't afford to ignore
â€˜Employee engagement' is a catchphrase firms need to take seriously, says Helen Hamilton-Shaw
Business buzzwords have the power to drive normally reasonable people to the edge, and I’m sure I’m not the only one who feels slightly ridiculous even uttering them. ‘Let’s circle back and deep-dive a value-added synergistic dynamic,’ anyone? Argh!
But one such catchphrase does embrace a concept that has real value and is something all firms should focus on. Because succeeding at ‘employee engagement’ will result in more than just happy employees.
Richard Branson once said: ‘Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.’
A wide body of research demonstrates the direct link between employee engagement and business performance, notably client satisfaction. In the US, Temkin Group’s 2016 Employee Engagement Benchmarking Study found companies scoring highly for customer satisfaction had one and half times more engaged employees than customer experience laggards. They also found that highly engaged employees were four times more likely to go the extra mile for the business and twice as likely to stay late at work if something needed to be done.
Recent research published by the Institute of Customer Service backs up this view. Its November 2016 report, ‘Disengaged UK workforce push customers away’, found just 25 per cent of UK employees are actively engaged, which is very worrying considering the correlation between engaged employees and customer satisfaction.
The institute’s data also shows only 11 per cent of customers would repurchase from an organisation after a bad experience with an individual employee. Even more concerning is that 43 per cent of customers would actively warn others not to use them too. Your people are your business and their behaviour has an enormous impact on its success.
We know that how your people behave is directly linked to how they feel, and that is largely down to how they feel they are being treated by the business. Your culture is key. As Walmart’s founder, Sam Walton, said, ‘The way management treats associates is exactly how the associates will treat the customers’, so it’s vital that an employee-focused outlook is part of your strategy.
In the recent Autumn Statement, the chancellor identified raising productivity as one of the key long-term challenges for the UK, as we lag well below the average of the major G7 advanced economies.
Employee engagement has a role to play in addressing this challenge. We know that companies with highly engaged employees deliver better performance across the board, demonstrating twice the annual net profit; two and a half times the revenue growth; 12 per cent higher client satisfaction rates; and 18 per cent higher productivity levels than engagement nay-sayers (according to Gallup and others in Engage for Success’s 2012 report).
With statistics like that, can anyone afford not to take employee engagement seriously?
Helen Hamilton-Shaw is member engagement and strategy director at LawNet