By Legal Futures’ Associate DPS Software
Employee engagement is a key driver of motivation, commitment, and productivity in a company. Encompassing many aspects of the workplace, it reveals how likely an employee is to stay, strive, and thrive in their role.
It may seem an obvious concept, but in fact only 15% of UK workers consider themselves ‘highly motivated’, and 24% admit to ‘coasting’. A direct result of lack of engagement, this leaves far too much room for below-par performance, which results in financial impact on the business.
Employee engagement – the stats
- 61% of the UK working population admits to being disengaged – with no enthusiasm, passion, or emotional commitment to their company.
- Only 35% rate their productivity as ‘strong’.
- Employees believe they would be as much as 45% more productive if they were doing a job they loved, and 28% more productive with better training.
- 84% of employees would consider leaving their current job if offered another role with a company that had an excellent reputation.
- Disengaged employees cost their employers between £3,400 and £10,000 in wasted salary per annum.
The impact of low employee engagement
These statistics clearly show that low employee engagement can have a massive impact on a business. This can fall into four main, but not exclusive, areas:
Profit – According to a recent UK government report, companies with low engagement can bring in 33% less than companies with high engagement. This is hardly surprising when teams with disengaged employees sell 20% less than teams with highly engaged workers.
EXAMPLE: Maplin, a UK electronic goods retailer, held a company-wide engagement survey in 2015, where they discovered solid links between employee engagement and sales performance. The stores that actively managed engagement outperformed their sales budgets by £0.5 mil and grew year-on-year sales by £1 mil.
The customer experience impact – It doesn’t take rocket science to realise there is a direct correlation between low engagement and customer service. If an employee doesn’t take pride in their work, isn’t an advocate of the brand, and is generally demotivated, then this will lead to poor customer service. In fact, disengaged employees make 100 times more errors than their engaged colleagues.
EXAMPLE: Serco, the leading customer services provider, demonstrated a strong link between employee engagement and the NPS (Net Promoter Score, a measure of customer loyalty). Contracts managed by employees whose engagement had improved over the year saw NPS scores that were 24% higher than employees whose engagement had dropped.
The retention impact – It costs approximately 20% of a salary to recruit an employee and another 7% to train them up. As time goes on, the cost of losing that employee and having to hire another one increases due to additional training. Keeping employees engaged gives a company the best chance of retaining its staff.
EXAMPLE: Zappos, an E-commerce company, approaches this situation in a rather unusual way. Having been with the company for two months, new recruits are offered $2000 to leave. If people stay, it shows they are engaged, are there because they want to be there, and more likely to strive for the company.
The absenteeism impact
A PWC report in 2013 found that sick days cost UK organisations nearly £29 billion a year. This is a staggering figure, especially considering that 12% of absenteeism is reported to be fraudulent according to a CBI report. Disengaged employees are thought to take twice the number of sick days compared to engaged employees, which not only impacts the operation of the business, but also the morale of engaged members of the team.
EXAMPLE: The results of the M&S 2015 annual employee engagement survey revealed that absence levels across stores in the top quartile of engagement were 25% lower than those in the bottom quartile.
How to improve employee engagement
“Direct managers account for 70% of the variance in employee engagement, according to Gallup. The ideas above are all related to the way that managers treat their employees. Successful employee engagement doesn’t just happen – it’s a conscious strategy that takes significant investment in time and resources. If a company is to be successful in the long run, engagement needs to be prioritised on the management agenda.” – Shaun Bradley, Director of People & Organisational Development at Perkbox.
- Frequent feedback and recognition – This is a big factor in stopping employees from disengaging. At present, annual pay rises and rewards for long service are the most popular forms of recognition. However, these don’t help individuals feel appreciated for their daily efforts or make them realise they are an integral part of the company. Recognition can range from a simple but sincere thank you to offering an in-house opportunity that will provide a new challenge.
- Train and retain – Investing in opportunities for employees to gain new skills will keep them more engaged.
- Build peer-to-peer relationships – Spending time each week (or even month) on this can positively impact teamwork, morale, and camaraderie. From beers on a Friday to board games to full team-building days out, making sure this is incorporated in business life is essential.
- Take the lead – People naturally follow the leader, so managers should adopt the same practices as they want from their team.
- Fully train new hires fully – Making a new hire feel like part of the team immediately is crucial to their success in the company. Provide an appropriate mentor, give them an uncomplicated initial project, and make efforts to help them integrate into the team.
- Flexible working – This is becoming a must for almost all industries now, and law is no exception. Providing software packages such as the cloud-based DPS Spitfire Practice Management shows employees that you understand work sometimes needs to be adapted around life, and that you are willing to make adjustments in order to retain valued employees.
The list could go on, but in essence, if you want employees to be engaged at work, you need to create an environment that is motivating, rewarding, and a pleasure to be in. The ultimate result of investing in employee engagement is a more productive team, which leads to significantly increased ROI for your business.
If you’d like more information about any of the DPS software solutions that could help you achieve more employee engagement, just get in touch with our friendly team.