Don’t forget employee engagement

While there’s a lot of interest in customer engagement, don’t forget employee engagement. And it seems most companies have. A Towers Perrin study found that just 21 percent of all US employees are fully engaged; most are frustrated and skeptical about their senior leadership, which correlates to operating profit and income, according to two recent studies.

The bottom line upsides of an engaged work force:

• 3.7 percent increase in operating margins and a 2.1 percent boost in net profit margins, according to an I. M Dulye & Co study of 41 international companies with 360,000 employees.
• 19.2 percent increase in operating income and 13.7 percent increase in net income, according to a Towers Perrin study across 50 global companies.
• 19 percent improvement in annual operating profit, 18 percent improvement in productivity and 400 percent reduction in errors at Rolls Royce Engine after committing to an employee engagement program. “It’s been like a tidal wave,” said Raj Sharma, president of the division. “Employees couldn’t believe that we’d listen to their suggestions, that decisions would involve them. And business performance is the only motivation to do this.”
• There’s a direct link between employee satisfaction and customer satisfaction, and between customer satisfaction and financial performance, according to a study by Prof. James Oakley of Ohio State University.

What three things matter the most in engaging employees, aside from the obvious Sr. leadership commitment to involving employees? Says Julie Gebauer of Towers Perrin:

1. Rational understanding of the company’s goals and values

2. Emotional attachment to the organization

3. Willingness to go above and beyond specific job tasks

Whose job is it anyway? HR? Corporate Communications? Marketing? Probably not HR. None of four HR functions — selection, development, performance management and compensation — was found to influence employee engagement according to a study by Northwestern University Forum for People Perfrmance Management and Measurement.