Employee Engagement

Widespread failure to get workers to care about their roles within a company hurts productivity and the bottom line

Derek Sankey
Calgary Herald
Saturday, November 10, 2007

Employee engagement -- the desire by workers to go the extra mile to help their employer succeed and who deem their work meaning and satisfying -- is so low that in strong economies like Canada's, it's having a big financial impact on companies and is seriously hindering recruitment and retention efforts, a new study shows.

"Engagement matters in retention and in organizational success, so it's real clear (that) senior leadership is still not doing the job that employees expect in terms of changing their minds about engagement," says Mark Dahlman, a managing principal in Calgary with global consulting firm Towers Perrin.

The workforce study of 90,000 workers worldwide, including 5,000 in Canada, found that only 23 per cent of workers currently feel engaged at work, while 32 per cent of Canadian employees are partly or fully "disengaged."

"There's a misperception that employees leave companies because of their managers alone," says Dahlman. "We're finding that the organization plays a much greater role in an employee's decision to stay or go."

Things such as office politics, having adequate resources to do the job, an organization's commitment to social responsibility, open lines of communication with senior leaders, opportunities for advancement, challenging work and training all contribute to an employee's perception of engagement in the workplace.

"There has been no real increase in engagement levels among workers," says Byrne Luft, regional vice-president of Manpower in Calgary. "That just goes to show the lack of awareness around engagement, which starts out at a very, very early time in your working career."
He says some organizations don't fully understand the concept -- or how to improve it -- so it falls to the bottom of the priority list.

However, that doesn't mean it's not having a significant financial impact on the company's profitability.

The Towers Perrin study found that firms with the highest percentage of engaged employees collectively increased operating income by 19 per cent and earnings per share by 28 per cent year-over-year.

In contrast, the companies with the lowest percentage of engagement showed declines of 33 per cent in operating income and 11 per cent in earnings per share.

The study is published at a landmark time in Canadian history with the country's unemployment rate dipping below six per cent for the first time in 33 years, giving people more options about where to work than they've seen in decades.

Add to that picture the stark demographic reality facing companies and the situation will intensify in coming years.

Human resource experts say failure to address engagement could translate into financial failure sooner than later.

Figuring out strategies to improve employee engagement starts with researching your employees thoroughly, knowing who they are and what they value, and then segmenting those employees in whatever way matters to them, says Dahlman.

For example, the number one factor affecting engagement for workers over the age of 35 is the reputation of the company and how that translates into the daily workplace versus workers between 18 to 35 who value opportunities for advancement and challenging new work projects.
"But what drives engagement depends on what kind of organization you have," Dahlman says, explaining that the industry, structure and culture of a company have a big impact on what measures can be taken to improve engagement.

"If you're in a customer service or retail business, employee engagement is impacted by their autonomy to meet the customers' demands," he says.

"The kinds of companies where operational efficiency is highly important, like the pipeline and oilfield services business, will improve engagement with better training and development."

Adding to the challenge of engaging workers is the fact that a growing percentage of a company's human capital is now considered part of the "contingent" workforce -- consultants, independent contractors and temporary workers.

The number is expected to grow dramatically as baby boomers retire and return as consultants in the next few years, particularly in industries such as the oilpatch.

"Even though they're contractors, they still have career aspirations and those are all real drivers of engagement," says Dahlman. "They still make decisions as to whether or not to stay."

Dale Carnegie Training works with over 400 of the Fortune 500 companies, and has graduated over 8 million people in 95 years, strengtheneing the people skills of their leaders to create strong teams and positively influence morale, leading to an increase in productivity.