Culture, Smulture. Amiright?
For many, this culture stuff is malarkey. Employee engagement is just coddling a bunch of snowflakes who need to learn how to grow up, join the real world, and learn the meaning of hard work. And do it all without crying to Mommy or getting a trophy for participation.
Hey, I get it. I got your employee engagement right here: "Come in. Do your job. And you'll get a paycheck in exchange." That should be enough, amiright?
If only that 20th century approach worked in a 21st century environment.
Culture is an essential factor in employee engagement. There is a direct line between employee engagement and employee productivity. And productivity directly impacts a business' profitability. When employees are fully engaged in their work, they are producing more, selling more, serving more. Whatever it is your business does, you're employees are doing more of it.
If your employees are not working at their full potential (because they're not engaged in their work), your company is not earning at its full capacity.
OK, so I see the connection between productivity and profitability. But I'm certain my employees are "engaged."
Odds are, they are not. Research consistently shows that 2/3 to 3/4 of the US workforce is not "actively engaged" at work (Gallup, 2018). That means, at best, employees come to work and do exactly the minimum. Not a bit more.
Hey, I'll take that hassle-free deal every day of the week. Imagine: Employees who get their work done and don't give me any trouble? Sounds like a dream!
A company that runs this way, though, is standing still. Not moving ahead. Not advancing. Not acquiring new customers. Not innovating on products/services. In today's competitive environment, when a business is standing still, it's falling behind.
On the flip side, however, according to Gallup, "organizations that are the best in engaging their employees achieve earnings-per-share growth that is more than four times that of their competitors."
OK, so the benefit of high engagement is being more profitable than my competitors. But is it worth it? What's the cost of low engagement? What is my business really losing anyway? I need to know the ROI of engagement.
On the back of a napkin, there are three essential calculations any business can use to determine the impact low engagement has on their individual businesses:
Optimum vs. Lost Productivity: productivity = total output (of goods or services) divided by total input (# of employees)
Opportunity Costs: value of productive work NOT getting done due to "people problems"
Real + Absorbed + Intangible Costs of Employee Exits: ranging between 20% for mid-level managers (i.e., $10,000 on a $50,000 salary) to 200% for executives or technical specialists (i.e., $200,000 on a $100,000 salary)
Yeah, but we do a company Christmas party every year. We spend a lot of money on that. Isn't that enough? Doesn't that mean our employees are engaged?
Engagement is not a one-and-done proposition. It's not a holiday party and -- BOOM -- you're done, your employees are magically engaged. Furthermore, engagement has nothing to do with ping-pong tables and summer picnics. That's a common misconception. While these things may be fun, they are superficial. They do nothing to advance the business.
Engagement starts with your culture and is facilitated by effective People Practices, which ensure things are done in a way that reflects your culture and supports your employees' ability to be engaged in their work.
You mean employee engagement is an ongoing campaign for the duration of the employment lifecycle of each of my employees?
If business owners and entrepreneurs are going to be successful in sustaining and growing their businesses, they need to be intentional and thoughtful about their People Practices.
After all, people are how business gets done.
Andrea J. Applegate is the founder and president of Applegate Talent Strategies, a boutique consulting firm dedicated to helping businesses get the most out of their workforce.