Employee engagement matters a lot!
According to Deloitte, HR professionals in Australasia are most concerned about engagement and culture than any other people challenge they’re facing, and are not feeling ready to address these challenges.1
Employee engagement is directly related to how committed a person is to their organisation2 and is mirrored in the extent of discretionary effort they put into their job.3 Discretionary effort is what they want to do rather than have to. This extra effort has an immense impact – it’s how organisations can achieve the productivity and performance gains they are seeking.
Low employee engagement has many negative effects that flow-on through an organisation, including inadequate business performance, low productivity, poor customer satisfaction, and high levels of employee absenteeism and turnover.4
Employee engagement is a major issue in Australia and New Zealand organisations
Research by Gallup shows that in Australia and New Zealand, only 24% of employees are engaged – 60% are not engaged, and 16% are actively disengaged. This percentage of engaged to actively disengaged workers is one of the highest in the world.4
The impact of this is hurting organisations, as illustrated by Ernst & Young research, which shows that Australian employees say they could be 21% more productive. They found the top 2 issues employees blame for holding them back are poor management and a lack of motivation.5
Managers are responsible for at least 70% of the variance in employee engagement ratings across business units.6
High employee engagement has a very positive impact on organisations
Aon Hewitt research found that each % improvement in employee engagement predicts a sales increase of 0.6%, and that a 5% improvement in employee engagement predicts a 3% increase in sales growth.7
If your employee engagement levels are lower than what you would like, then you have a substantial opportunity to grow your sales whilst increasing your employee engagement.
Business units in the top quartile of employee engagement outperform those in the bottom quartile by a considerable difference, and have:
- 22% higher profitability
- 21% higher productivity
- 37% lower absenteeism
- Up to 65% less staff turnover
- 48% fewer safety incidents 4
This is reinforced by the findings from the Corporate Leadership Council. The most engaged employees perform 20% better and are 87% less likely to leave an organisation.2
High employee engagement is also critical when an organisation wishes to successfully implement a major change programme or execute a business strategy.8
1 Deloitte University Press. (2015). Global human capital trends 2015, p. 4.
2 Corporate Leadership Council. (2004). Driving performance and retention through employee engagement, p. 3, 42.
3 Towers Perrin. (2003). Understanding what drives employee engagement, p.3.
4 Gallup. (2013). State of the global workplace, p. 21, 78.
5 Ernst & Young. (2013). Productivity pulse, p. 2.
6 Gallup. (2015). State of the American manager: Analytics and advice for leaders, p. 4.
7 Aon Hewitt. (2013). Trends in Asia Pacific employee engagement, p. 23.
8 DDI. (2005). Employee engagement: The key to realizing competitive advantage, p. 7.