Six Drivers That Determine Engagement Success

Just because companies move in the positive direction of engagement doesn’t necessarily mean they’re doing it right

By Yash Chitre, VP Consulting, Inward Strategic Consulting, and Dale Buss, Business Writer and Author

The evidence can’t be ignored. Companies with engaged workforces demonstrate an average of 19% higher operating income and 28% higher growth in earnings per share than the average employer, according to the Towers Watson 2012 Global Workforce Study. In stark contrast, companies with unengaged workforces average 34% less operating income than average and 11% lower EPS growth. Airlines that fail to engage their workforces in the corporate purpose are forgoing $590 million a year in potential revenue, according to a Forrester Cain Research study. And in the hospitality industry, forfeited opportunities sacrifice a total of $1.2 billion.

Consider productivity and safety, just one arena where active engagement is hugely beneficial. More than 70% of U.S. employees are actively disengaged, according to a 2011 study by the Corporate Executive Board, meaning a lost productivity cost to the economy of $370 billion a year. (Imagine the improvement in the economy if this figure could simply be halved!) And while the average cost of a safety incident for engaged employees was $63 one recent year for MillerCoors, the average cost was $392 for disengaged employees.

Establish, Nurture, Succeed

Just because companies move in the positive direction of engagement, however, doesn’t necessarily mean they’re doing it right. It’s one thing to launch an engagement program or strive to match “best practices” in that area. It’s quite another to establish, nurture and succeed with a system and a process that is meant to guarantee results for the long term.

“To ensure that an organization’s employees can become engaged in meaningful ways, that it builds over time and costs less to execute, employee engagement must be part of an integrated approach to improving the corporate culture in profound ways,” says Allan Steinmetz, Founder and CEO of Inward Strategic Consulting. “It begins with corporate commitment to establishing meaningful employee engagement and broad experiential communications, and includes training and learning techniques for both workforce and management.”

The Drivers of Engagement

Once such a process is firmly in place, six main drivers determine whether companies will be able to tap into the benefits of engagement:

Work: How the employer organizes work tasks and processes, manages resources and creates the opportunity for employees to feel a genuine sense of accomplishment.
People: How senior leadership regards the priority of engagement and drives it through all levels of management. Focusing on the importance of people, both employees and customers. Creating a culture of engagement through leadership. Selecting employees who are predisposed toward engagement.
Opportunities: How workers can avail themselves of career opportunities, including learning and development. Highlighting what matters most and where there is greatest opportunity for improvement and growth.
Total rewards: How employees perceive their overall compensation, including recognition as well as pay and benefits. Acknowledging and rewarding people’s efforts and performance.
Company practices: How corporate practices encourage engagement, including performance management, brand alignment, reputation management, diversity, communication and connecting with employees.
Quality of life: What the company does to enhance the physical work environment and encourage work/life balance.

Mediocre or Exceptional?

The positive and profitable experiences of companies like Chrysler, UPS, Ford, Southwest Airlines, Audi, Enterprise Rent-A-Car and others prove that employee engagement does matter and can make a significant difference in productivity and operations improvement.

Improvements generated by engagement can be measured, recognized, rewarded and built upon in a sort of “virtuous cycle” that can revolutionize how companies and brands do business. It is an integrated process that should be managed, just like any external branding effort. “When it’s done well, people will be able to connect the dots and see the full picture of what the brand stands for and how their behavior and roles contribute to exceptional customer experiences,” notes Steinmetz.

“Engagement is a differentiator between mediocrity and exceptional customer experiences,” he continues. “It creates a sustainable workplace environment where people enjoy their work and their surroundings. People come to work eager and motivated to contribute. It all depends on leadership to have the commitment and the will to trust their people to do the right thing.”

Yash Chitre is Vice President of Consulting at Inward Strategic Consulting. Dale Buss is a veteran financial journalist who has written about corporate culture and employee engagement for a variety of outlets, including Chief Executive, Edmunds.com and The Wall Street Journal. For more information about Inward Strategic Consulting, go to www.inwardconsulting.com

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