Every organisation waxes lyrical about improving efficiency and productivity that it expects from its employees. It is a common discussion among senior executives, but strangely enough, they fail to recognise the solutions that are sitting right in front of them.
In the national employee engagement studies that I have conducted over the last 15-odd years, I have found three distinct segments – Promoters, Detractors and Passives. Passives have average engagement levels. In comparison, Promoters are more loyal and are more likely to go above and beyond to spread positive word of mouth. Detractors are the exact opposite and are less loyal. They also go above and beyond, but to do just the opposite – spread negative word of mouth. The loyalty factor is staggering even in the case of loyal and detracting staff and their discretionary effort. A critical difference between these two segments is:
Stated Loyalty of customers – Promoters show a loyalty factor of 86.6% towards a brand, while Detractors exhibit only 32%. This is almost a 3X difference.
Employees’ propensity to go above and beyond – Engaged staff scored a 7.6 out of 10 in their willingness to go above and beyond and provide discretionary effort, while disengaged staff scored a 4.3 out of 10 in employing discretionary effort. That leaves a staggering 76% difference between the two.
Staff going above and beyond obviously has a direct impact on productivity. Loyalty is a huge cost that does not show up fully on the balance sheet. It is estimated that the cost of replacing an employee is half a year’s salary considering the time invested to bring the new employee up to speed and proficient, along with the recruitment costs. An MIT Sloan research also states that companies spend between 1% to 2.5% of their annual revenue on upskilling new hires before they even reach a break-even point. What do you think happens when the attrition rate is high and you need to fill the vacant spots quickly? Do the math. You’ll realise the humongous waste of time, manpower and money.
When we analysed the results of our employee engagement surveys further we found something very interesting. Every organisation is like a pyramid where staff at the bottom of the hierarchy make up the majority. It is common sense that there must be greater focus towards engaging this cohort. However, our research showed us just the opposite in most organisations. The higher an employee is in the organisational hierarchy, the more he/she is engaged.
One of the reasons could be because senior staff are more self-motivated and also understand the goals and strategies more intimately than a staff member in the lower rung. This in itself drives a person in a management or leadership role to engage better with their job. But when the larger cohort is less engaged, can you imagine the economic loss the company faces?
Here is another insight – Why do practically one-third of employees not want to recommend their organisations products and services to others?
A primary reason could be that they do not have enough knowledge about the products and services that you offer, or they probably have greater knowledge about them and believe it to be of a lower quality than that of your competitors.
But a more critical reason for their low engagement with the business is their lack of understanding of your brand’s strategies and goals.
Hence, as a leader within your organisation, now ask yourself – Is the leadership doing enough to explain the company’s strategy and direction to the staff at the lower rungs of the hierarchy? May be enough is not being done here!
So how do you tackle this problem and create an engaged workforce that is obsessed with driving your organisation on the path of constant growth and success?
To understand this, let us liken your organisation to a marching band where the leadership is the lead drummer. The entire band follows his cue to set their own rhythm, pace, formations, etc. This lead drummer leads them in the direction he has in his mind, while the rest of the band follows him with precision and faith.
Translate this to the organisational leadership that has a business strategy in mind and you set KRAs for your staff so that your company can achieve the goal you have set. Your staff will do their job robotically.
Now imagine a situation where you sit down your staff across hierarchy and explain your vision and goals to them. Ask them for their opinion and suggestions. Take feedback from your frontline staff because no one knows your customers and their needs better than them. Assimilate all this while finalising your business strategy and show your staff that you value their suggestions and appreciate their work. Always remember without involvement there is no commitment?
Instantly, their monotonous routine turns into one of high engagement where they feel valued and cared for. From mere employees, they become stakeholders within the organisation, becoming more involved in the business and steering the brand towards the path of growth that the leadership has charted.
In troubled times where attrition rates are running high, as a leadership member ask yourself these questions. If the answer to even one is missing from this matrix, it’s time for the leadership to take steps to fix them immediately:
Do staff understand your brand’s strategy and direction?
- Are they personally committed to making your strategy successful? If not then why not?
- Are employee contributions recognised?
- Do you have a set of leadership values, standards and behaviors, and are they measured?
- Does your leadership style encourage discretionary effort from staff?
- Do your employees feel valued, cared for and supported?
Views expressed are personal.