"Any company trying to compete … must figure out a way to engage the mind of every employee.” — Jack Welch
“Employees first” is the de-facto motto for most HR departments. It’s a noble and well-intentioned motto — after all, no one sets out to make employees miserable.
In fact, employee attrition has a cost — recruiting and training employees, only to watch them turn over, costs companies a ton of money — 10% to 30% of employee salaries, to be precise. Statistics are staggering: 76% of full-time workers would leave their current workplace if the right opportunity came along, says this Careerbuilder.com report, while other studies say that an average company loses anywhere from 20% to 50% of its employee base yearly.
With rampant “talent wars,” especially in technology sectors, companies need to be on their game to attract and retain the best and the brightest.
If you think employee engagement is a nice-to-have that doesn't really concern you, think again. If your employees aren't engaged and aren't reaching their full potential, you are literally leaving money on the table. Let’s consider the ways:
If you aren’t yet sold on the value of employee engagement, let’s bring out the big guns first — it’s been proven to drive financial performance.
Studies show that they experience 18% higher productivity, 12% higher profitability and 51% lower turnover than companies with disengaged workforces. [*Source: Gallup Consulting "Employee Engagement, What's Your Engagement Ratio?" 2008]. A recent study by Kenexa found that the most engaged companies have five times higher total shareholder return over five years than the least.
A study by Towers Perrin similarly linked employee engagement to 6% higher net-profit margins, and Aon Hewitt tied high levels of engagement (65% or greater) to outperforming the total stock market index and posting total shareholder returns 22% higher than average in 2010.
Because a brand voice is a composite of how customers, employees and the rest of the world feels about your brand, employees catalyze through the rest of the ecosystem. Gallup research has shown that engaged employees drive customer engagement, and Constellation Research Group has also agreed that engaged customers are three times more likely to recommend or advocate a product or service to a friend. Reality is a little different for an average company, as employee pride in the company has decreased from 73% to 66%, and desire to recommend the company dropped from 49% to 41 percent.
Thought Leadership Fuels Trust
Buyers aren’t content with buying simple widgets anymore, they are looking for an expert partner. According to the Edelman trust barometer, the employee is the new influencer, and is in a position to be this trusted partner.
To fully maximize the exposure of our employees’ expertise to the rest of the world, we need to give them the tools to keep up to date and hone their skills, oftentimes by bringing them together in communities of practice internally and across company borders. If we allow our employees to constantly learn, and build personal brands on top of their expertise, our companies will stay on the cutting edge, and our customers will trust us and vote with their wallets.
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