Why investing in your employees will deliver results.
Business leaders have been struggling with employee engagement long begore the ‘Great Resignation’ or ‘Quiet Quitting’ became buzz words we seem to hear everywhere in the media. The truth remains that disengaged employees cost companies a lot of money. Simply replacing an employee is costly. The Society for Human Management estimates that replacing one employee costs approximately 50-75% of that employee’s annual salary.
What costs more than replacing an employee is the financial impact current disengaged employees have on your business. In studies by the Queens School of Business and by the Gallup Organization, disengaged workers had 37% higher absenteeism, 49% more accidents, and 60% more errors. In organizations with low employee engagement scores, they experienced 18% lower productivity, 16% lower profitability, and 37% lower job growth. Conversely, businesses with highly engaged employees enjoyed 100% more job applications.
An engaged employee is aware of business goals and how they contribute to those goals. It gives them context. Being engaged also makes it easier for employees to work together with their team to improve job performance, for the larger benefit of the organization as a whole. True employee engagement comes about when enough people within a company not only care about doing a good job, but also care about what the organization is trying to achieve and how it goes about doing it.
This caring attitude and behavior only develops when people are consistently satisfied with their jobs and when they believe the organization supports them.
WHAT GOES INTO IMPROVING EMPLOYEE ENGAGEMENT
There are several factors that go into creating a culture that encourages employee engagement.
- Measuring what matters most for employees’ performance. Leaders often focus on metrics that don’t tie strongly to employees’ psychological needs and ultimate performance.
- Investing in their career. Employees need ongoing purpose and development, not biannual perks, to achieve more for your organization.
- Acting quickly. Employees who strongly agree that their organization acts on survey results are 1.9 times more likely to be engaged.
- Make it an ongoing process. One of the most common mistakes that leaders make is to approach engagement as a sporadic exercise in making their employees feel happy.
- Empowering managers to drive engagement. Managers account for 70% of the variance in team engagement. There are no quick fixes when it comes to human relationships. It is essential that managers effectively interact with and develop each team member over time.
- https://www.enrich.org/blog/The-true-cost-of-employee-turnover-financial-wellness-enrich#:~:text=The%20Society%20for%20Human%20Resource,in%20recruiting%20and%20training%20costs.
- https://hbr.org/2015/12/proof-that-positive-work-cultures-are-more-productive
Organizational leaders who embrace the notion that investing in their team’s growth has a direct correlation to employee and customer retention understand the value. In a 2014 tweet, self-made billionaire and founder of the Virgin Group Sir Richard Branson said, “Train people well enough so they can leave. Treat them well enough so they don’t want to.”
Many leaders will cringe after reading the first half of this quote. I have too often heard people in leadership roles opt for limiting training within their companies for fear that employees will leave as soon as they add more skills to their resumes, thereby losing that investment made. Or, the leader may not have taken the time to understand the value the training will have on the individual’s performance. Either scenario demonstrates a short-sighted perspective.
Yet ‘winning’ companies do invest significantly into their workforce because it is their belief that by taking care of their people’s needs and desires to grow, those employees will in turn give their best effort and feel valued enough to not quit. It is those same companies that have low turnover and are able to recruit more easily. Studies have shown that over 70% of leaders rank employee engagement as very important to achieving overall organizational success. It’s clear that an engaged workforce leads to improved productivity and performance, as well as increased motivation.
TRAINING EMPLOYEES WELL
What does ‘training’ mean in your organization? Is it just focused on skills and knowledge to make them better at specific jobs, or does it also include growth and development in being human that will make them an improved version of themselves?
According to a study of more than 18,000 frontline workers across 150 companies, lack of career growth is the No. 1 reason for turnover. The data shows that people aren’t looking to just clock in, clock out, and cash their checks. They are looking for meaningful work that helps them develop their skills and build a career path. So what are you doing in your company to train, foster growth, and retain your talent?
When your team is armed with the necessary skills that will not only advance their capacity to perform well but also lift their human spirit to be and do their best, productivity will soar, and motivated, self-driven employees will deliver nothing short of the best results. Is it possible that employees may still feel the urge to leave? Of course. As they gain knowledge and expertise, they may feel that they can contribute more elsewhere, if not just shown more external options available. This is innately human and something every leader must accept: people have the desire to grow and take on new challenges. And sometimes those challenged may lie elsewhere.
TREATING EMPLOYEES WELL
This is where effective leadership plays a significant role. If you lead your employees well, and you have hired the right people for the job, you will retain most of them. Unfortunately, many leaders will provide their employees the necessary training to help the business succeed but forget to value them as human beings and invest in ways to allow that person to soar.
A sign of great leadership is cultivating a compassionate organization that relies upon the knowledge and value of individual contributors, rather than the classical hierarchical organization, which relies on the knowledge of those at the top of the ladder. Forward looking leaders who are focused on providing continuous training to upskill their employees and developing their capabilities for future company positions have a distinct advantage. Developing a framework that encourages people to learn, grow, and progress in their careers results in the unleashing of commitment and motivation to willingly remain an engaged employee that actively contributes to the organization’s growth and significantly reduces the desire to look elsewhere for employment.
So, the next time you are frustrated with high absenteeism, or the number of accidents that are affecting your operations and errors impacting profitability, I hope you take a moment to reflect and measure your team’s level of engagement. You will then have the opportunity to take action.
