How to Make The Business Case for Investing in Employee Engagement
By Rick DeMarco, Managing Director, Inward Consulting
Inward is an 18-year-old pioneer in employee engagement and internal brand alignment and has helped global companies such Walmart, McDonald’s, Prudential and Cardinal Health align the attitudes and behaviors of their employees so they deliver exceptional customer experiences.
Over the past decade or so, more and more organizations are talking about the importance of creating a culture of high engagement with their employees so they will create exceptional customer experiences. However, although employee engagement shows up as a top challenge for CHRO’s, CMO’s and CEO’s around the globe, the needle has not moved much for high engagement from levels of 30% in the U.S and 16% globally over the past 15 years, according to Gallup. As we talk to existing and new clients, we hear and observe that one of the primary drivers for this lack of movement is an insufficient level of people and money resources dedicated to the effort.
We are beginning to see more and more people with responsibility for engagement in their titles, and yet there is rarely a sufficient number of staff members assigned to this person or a budget of enough substance to make a difference. I served as Director of Internal Brand Alignment for Hewlett Packard before joining Inward Consulting, with responsibility for engaging and aligning over 325,000 people in 170 countries around the brand and culture. At that time, HP was the largest technology company in the world with over $125 billion in annual sales, and yet I had only one person on my staff and a negligible budget which required me to pass the hat to fund any of the initiatives that would accomplish our objectives. In the meantime, the company spent hundreds of millions of dollars in advertising to consumers and its channel partners.
If, as the research suggests, employee engagement is in fact a major challenge for companies around the globe, why is the effort not receiving sufficient financial and human resource support to solve the problem? If a company had a safety problem or a product quality problem or a production problem, it would certainly dedicate resources to address it. Years ago, we were all enthralled with the quality movement started by W. Edwards Deming. One of his key teachings was that it costs more to do something ineffectively and fix it later than to do it right in the first place. And yet organizations spend significant amount of resources on rallies and all-hands meetings and rewards & recognition programs in an attempt to drive a culture of high engagement without realizing an acceptable ROI on the investment. In a world in which we are challenged to show returns on any investment in people or money, there is mounting research and evidence that affirms that an investment in a comprehensive plan to create a culture of highly engaged employees yields returns in growth, productivity, lower turnover and customer loyalty and satisfaction.
So how can those assigned the task of creating high employee engagement ensure that they have the resources to accomplish their objectives?
1. Any time an organization makes an investment of money and people in an initiative, leadership will wish to assess the return for that investment. Often, the return is a little harder to identify because there is not a clear cause-and-effect relationship. But even if it’s an intangible, it is the responsibility of leadership to be good stewards of resources. The good news is that there is significant empirical evidence that a highly engaged workforce leads to higher growth, productivity, margins and customer satisfaction and loyalty, as well as reduced turnover and waste. Take the time to create a solid business case for the investment in employee engagement using the available research and data to demonstrate to leadership that there is a significant return for that investment.
2. Do your homework and find out where funds are being spent today on training, communications, rewards & recognition, assessments and other engagement initiatives that are not yielding a return and create a partnership with the owners of these funds to redirect them to efforts that will have an impact. The key to successful execution of an employee engagement strategy is strong collaboration across functions and business units. Although HR may be the guardian of culture and Marketing the guardian of Brand, everyone in the organization must own and be accountable and responsible for both.
That means that despite individual efforts being made by different functions or departments in an organization, the shared vision is the same…create a culture of high engagement and commitment to providing exceptional customer experiences. Reach across silos and functional boundaries to create a common articulation of an aspirational vision and then work together to pool resources to make the biggest impact, regardless of which function manages or executes a particular initiative. The Marketing department has a significant stake in maximizing the customer experience and is an important source of budget dollars. The objective of collaborating and working towards a common goal is that the impact of each of the individual initiatives will be compounded when they are part of a larger strategy driving towards a common goal.
3. Develop a Strategic Engagement Plan with a budget, deliverables, clear accountabilities and metrics that will increase levels of employee engagement and sustain those levels over time.
4. Engage a cross-functional, cross-business-unit collaborative team that will be responsible for execution of the strategic plan and be accountable for the results.
5. Deliver! Show the impact of your results and difference it makes in the business. As you move through execution, refer back to the business case you used to convince leadership to make the investment and demonstrate that you are in fact delivering what you committed to deliver.
There will always be more to do than we have resources to accomplish. But the key for employee engagement leaders in securing sufficient budget and staffing to make a difference is to demonstrate that the return far outweighs that received from other initiatives that are being funded, and then to deliver what you promise you’ll deliver. And that starts with creating and presenting a solid business case to leadership that convinces them that an investment in employee engagement will generate better returns than the time and money invested in alternative initiatives.
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