Befitting an article centred on statistics, it is only appropriate that we begin with one and it will undoubtedly send a shiver down the spine of HR departments across the world – more than 40% of the global workforce were considering leaving their employers during the past year. Almost three years into the COVID-19 pandemic, the finding by tech giant Microsoft reinforced the looming threat of what U.S experts are dubbing The Great Resignation, with ABC reporting that millions of people from frontline workers to senior leaders are set to voluntarily call time on their jobs.
This is not an article about The Great Resignation though. Rather, it is about employee engagement and nothing highlights why that concept has never been more important than the fact so many people are currently open to walking away from their offices, factories and pay cheques. While some HR officers will recall times it was difficult to maintain interest from executives when talk turned to the ‘mysterious’ world of employee engagement, it’s a different story when a positive or negative result can be the difference between countless workers choosing to stay or leave.
With this in mind, we have compiled this easy-to-read list of the employee engagement statistics every business needs to be aware of as they navigate the new world order.
What is employee engagement?
Financial website Investopedia defines employee engagement as “a HR concept that describes the level of enthusiasm and dedication a worker feels towards their job”. However, to truly appreciate its importance, consider these three key takeaways:
- Staff engagement can be critical to a company’s success
- Engaged employees are more likely to be productive and higher performing, and
- Employers can foster employee engagement through effective communication, offering rewards and discussing career advancement.
That’s right – employee engagement is about more than how satisfied a person is in their job. It is a measure of their enthusiasm for and emotional connection to their organisation and, thus, can have a huge impact on its mission. Consider the results of a survey conducted before the pandemic that found low employee engagement costs up to $500 billion each year in the U.S. alone. A statistic such as that is enough to make many CEOs cry but, as Investopedia highlights in it’s final point, there is cause for hope given there are also huge opportunities to foster positive employee engagement.
Benefits of employee engagement
One only has to run their eye over the following statistics to appreciate the impact happy and motivated employees can have on a business – and the danger when they’re not.
Highly engaged workforces increase profitability by 21%
This finding by analytics and advice firm Gallup is based on the fact engaged employees are motivated to complete their tasks on time and more likely to strive harder to reach goals and objectives. By meeting customer needs to a higher standard, they are collectively driving more sales and higher revenues, while their personal enthusiasm for their jobs leads to lower absenteeism.
Employee disengagement costs the Australian economy $2 billion every year
Unmotivated employees typically have a lower sense of responsibility that results in a range of negative outcomes from lower productivity and missed deadlines to poor customer service and errors in work. Throw in the expense involved in hiring, onboarding and training new staff to replace disengaged employees that quit their jobs and it’s clear how quickly the financial toll grows.
Highly engaged teams sell 20% more
This finding should come as no surprise. Disengaged teams lack as much motivation and drive to pursue profits, with PeopleMetrics also reporting that employees of highly profitable firms are generally 50% more engaged than those who work for unprofitable companies.
More than 80% of customers are retained by engaged workforces
Customer service is crucial for the success of any business, and team engagement plays a huge role in how it is delivered. Indeed, this survey found more than 80% of customers are retained by organisations that boast more than 50% employee engagement. It’s simple really – staff members that enjoy what they are doing not only create a positive experience for customers but inspire a sense of loyalty from them.
Highly engaged organisations have 41% lower absenteeism
Absent workers can be a huge financial drain on businesses with productivity losses costing Australian employers more than $35 billion each year. While no one begrudges genuine absences, there is plenty of evidence that disengaged workers are more likely to take time off compared to those who are happy and motivated in their roles. One such study by Gallup found high engagement organisations have 41% lower absenteeism, with their staff more likely to show up to work and do more work while there.
Disengaged workers have 49% more accidents
In the words of occupational health and safety magazine EHS Today: “A disengaged workforce could spell trouble … and lead to unsafe behaviour on the job.” The online publication shone a spotlight on studies conducted by Queens School of Business and Gallup that showed disengaged workers have 49% more accidents at work and commit 60% more errors and defects. From going out of their way to protect others to providing more feedback on workplace improvements, engaged workers contribute to safer workplaces.
Improving employee engagement
As a science within its own right, there are no quick fixes for engaging a disengaged workforce but these statistics highlight areas where focus can be directed.
Managers account for 70% of engagement variance
Anyone still in doubt that great managers make great workplaces should revisit Gallup’s report that estimated managers account for at least 70% of the variance in employee engagement scores across business units. The fact it also found that just one in three employees in its global database strongly agree that they trust the leadership of their organisations is further proof of the need to invest in recruiting and developing quality managers. Senior leaders play a huge role in the employee experience and need to know how to praise, educate and inspire their teams.
Internal comms motivate 85% of employees to become more engaged
A simple way to diminish a person’s enthusiasm is to leave them out of the loop. In fact, 74% of employees have reported feeling like they are missing out on company news and information. This is particularly so given a study by Trade Press Services found effective internal communications motivate 85% of employees to become more engaged in the workplace. Leaders should establish regular means of sharing company news to help employees feel motivated to achieve collective goals, increase knowledge and motivate them to become more engaged with customers.
Recognition is a prime motivator for 37% of employees
It does not take much to say “well done” but it sure goes a long way – and if you don’t believe us, consider this trio of statistics:
- 37% of employees feel most encouraged by personal recognition
- 66% of employees would quit if they feel underappreciated, jumping to 76% for millennials
- 54% of senior managers feel it is “common” for staff to quit due to a lack of recognition
Whether they are praised publicly or privately, employees are more likely to be engaged when managers show that they appreciate their efforts. Incentives such as paid leave, gift cards and event tickets are another way of recognising quality work by both individuals and teams and while there may be a small financial cost, any associated spike in employee engagement and productivity will be well worth it. Also don’t hesitate to call out the smallest of accomplishments as such unexpected applause is often the most memorable.
Employee engagement is not a short-term project. It requires an ongoing, daily commitment from executives, managers and key individuals to ensure they are aware of their employees’ needs, wants and concerns. It is not about pandering to staff – it is about listening to them and speaking with them, not at them. When discussing employee engagement, so much of the focus is understandably on ‘employees’ but the key to success is as much about how engaged managers are with their teams.
As one of the key functions of human resources, it is essential that HR teams have the time and resources to adequately focus on improving employee engagement. This can pose difficulties for some businesses and many of them are turning to offshore HR staffing solutions to reduce costs and improve efficiencies. There is a huge number of outsourced recruits and teams ready and waiting to support in-house HR staff with repetitive and time-consuming tasks and allow local teams to focus on more meaningful work such as improving employee engagement.
From freeing up your onshore team’s time to improving policies and procedures, discover five reasons your HR function will benefit from human resource outsourcing (HRO).