Most boardrooms see employee engagement as a key priority for the future and net investment in engagement is set to grow, even in the current economic environment. This is a key finding of the most comprehensive study of engagement practice undertaken in the United Kingdom, commissioned by specialist employee engagement consultancy, Engage Group.
The survey of nearly 23,600 directors, managers and employees, conducted by YouGov during October 2008 and launched today, reveals that effective engagement can demonstrably improve an organization's performance. Four out of five board members believe that a focus on employee engagement improves productivity and service delivery and three in four believe it improves bottom-line performance.
A high level of employee engagement is one of the top three drivers of an organization's performance, according to Britain's boardrooms, and nearly a third of the U.K.'s senior leaders see a fully engaged workforce as one of the most critical factors in their organization's success. Half of those board members who say they have engaged their employees to perform well have seen turnover increase in the last year.
However, despite growing board support for engagement, most employees feel disengaged from their organization. Only just over a third of employees believe their organization engages them to perform well. Board buy-in has evidently not yet been translated into action.
The report anticipates the launch in the Spring of 2009 of the MacLeod Review, the Government's top-level inquiry into whether and how employee engagement can help British industry improve performance and weather the economic challenges it faces.
The key findings of the research can be summarized as follows:
· Nearly half of directors consider employee engagement to be more important than a year ago and nearly 60 percent cite it as a visible priority for their boards.
· Nine out of 10 board members say they plan to maintain or increase spending on employee engagement in the coming year and three times as many (34 percent) intend to increase investment in engagement, as intend to decrease it (11 percent).
· One in two line managers still make decisions behind closed doors. Worse still, two-thirds of those managers then just tell their employees what to do or simply expect them to “catch on” to what has been decided. Only one in three make an effort to explain their decisions to their people.
· The more employees are involved in decision-making, the more they feel that they are engaged and performing well. 70 percent of employees involved from the outset in 'big issue' decision-making feel engaged to perform, against just one in 10 employees who feel excluded from the decision-making process.
· Although most board members believe employee engagement significantly strengthens their organization's brand, enabling them to attract more talent and retain it for longer, less than a third of employees say their organization manages to attract the best talent – and fewer still say they hang on to it.
· Five “new world” elements of the successful Generation Y organization emerge from the survey, all involving the introduction of greater power sharing at all levels:
- employee approval of the way change is managed
- employee involvement in “big-issue” decisions
- employee involvement in day-to-day decisions
- understanding of employees' personal contributions
- employee empowerment
· Fewer than four in 10 employees believe their senior leader – usually the CEO – is effective; and forceful and controlling leadership styles both have a negative impact on engagement. On the contrary, employees believe the most effective leaders are those able to inspire confidence and commitment, empower those around them and build effective teams.
Commenting on the report, Engage Group's deputy chairman John Smythe said: “This report confirms an earlier thesis, the outcome of an extensive research program I carried out in partnership with McKinsey & Company in 2004, that the drivers of employee engagement are shifting towards a new inclusiveness. The most successful organizations are as radical about their engagement strategies as they are about their business models. Leaders at every level need to have the courage to share power with their people – to retain the best talent and drive real value, leaders must give employees a voice in shaping their own futures. The old model of the charismatic, controlling CEO who leads from the front and barely looks back is not only dated, but has a hugely negative impact on employee engagement. Another problem is that too many companies are hamstrung by outmoded benchmarking surveys and valueless metrics. Too often organizations indulge in competitive point-chasing rather than the pursuit of real change. The most successful organizations are those that are clear about the outcomes they want and find ways for their employees to help co-create solutions to get them there."
Copies of the report are available to download at http://www.engagegroup.co.uk.
