The debate: is engagement still a valid concept?
HR professionals are often told that raising engagement is the holy grail of business performance. But does pursuing it truly pay off?
HR has lost sight of the bigger picture
If we define employee engagement as a workplace approach where companies strive to create the right conditions for staff to thrive, I think it is something everyone in the business should be focusing on – not just HR.
I earn a living helping companies create a culture of engagement, so I am undeniably biased. But I believe that the HR community has lost sight of the bigger picture in our desire to implement metrics and analyse engagement to the nth degree. At its core, employee engagement is about three key things: appreciation – we all want to know that our efforts are not going unnoticed; advancement – most of us would like to advance in our careers, either in the form of promotion or skills development; and remuneration – not many of us have the luxury of working for free, so we need to be rewarded for our time, energy and skills to make a living.
These core ingredients need to be in place to build the foundations of engagement. When they are, businesses can look to include other elements such as health and wellbeing initiatives, a comfortable work environment and positive relationship-building among employees.
It is an added bonus – but admittedly a luxury – if employees are able to match their own life purpose to that of the organisation they are working for. But companies are ultimately fuelled by the people who run them and they should do everything in their power to ensure that employees are engaged, committed and willing to go the extra mile.
Founder, Engage Me Online, Middle East and Africa
Engagement is crucial if we want to be more agile
Employee engagement is at the core of having motivated and satisfied employees. With the frequent changes that organisations are facing, it is essential to communicate and keep staff up to date with inside information. This could include challenges that the leadership team is facing, or the direction of the company. Employees want to be in the circle of trust, to be in the know. Communication is therefore key in enhancing employee engagement, as a lack of clear information can lead to low morale and a decrease in productivity.
And engagement is becoming more and more important as businesses are becoming more agile. Smart working, agile working and activity-based working are new terms that we are hearing more and more about. For example, we are seeing a change in office design that encourages collaboration and engagement among employees. Ample room for productivity and opportunities for collaboration and engagement are designed into everything from meeting rooms to collaborative spaces. More engaged companies are opting to ditch cubicles and replace them with spacious open areas. These offices promote comfort and collaboration – and that promotes engagement and motivation too.
Dr Mona Mustafa
Associate professor, faculty of business and management, University of Wollongong, Dubai
Disengaged employees can damage sustainable growth
Employee engagement leads to better business outcomes. It’s that simple. When a staff member has an emotional connection to their company, they are more inclined to hit their targets and deadlines. They will go the extra mile, even when the boss is not looking, and they will deliver enthusiastic contributions to team brainstorms, as opposed to thinly veiled indolence. Engagement also has a direct impact on absenteeism.
While organisations might be able to absorb the effects of both engaged and disengaged staff, many business leaders don’t realise how significant the engagement concept is. A global engagement report commissioned by Steelcase in 2016 observed 12,480 workers in 17 countries, including the UAE. It found that not only does employee engagement positively correlate with employee satisfaction, but one third of workers in several of the world’s most important economies are disengaged.
This can create a crisis for businesses that need to be agile and resilient. Disengaged employees can damage an organisation’s sustainable growth. By addressing the most basic needs of individuals – physical, cognitive and emotional – leaders can show that they care about their employees’ wellbeing, and increase profitability, productivity and retention in the process.
Is there too much focus on engagement? Essentially, no. I believe it has a direct impact on a company’s success and profit as a whole, fuelling organisations during times of economic growth, as well as, critically, when market conditions are uncertain and volatile. But, as with anything, there needs to be a balance and influencing engagement is not easy. It relies on several factors, such as being aligned with the purpose of the company, enjoying working with the team, having a coaching leader and working in an environment that provides choices to match the work being performed.
HR director, EMEA sales, Steelcase
Businesses don’t make the link to financial performance
Despite musings to the contrary, employee engagement is a scientifically valid concept. Aon Hewitt has found that leaders and managers are 30 per cent more likely to act on engagement if they have seen the direct effects it has on business performance. However, not many organisations have linked engagement to financial performance because of a lack of access to relevant KPI datasets.
By establishing internal evidence, there is an opportunity for companies to drive management efforts towards improving engagement. Case studies we have carried out, backed by KPI datasets, demonstrate clear links with performance. At one large organisation, we found business units with top-quartile engagement results had more satisfied customers and a lower turnover rate compared with units in the bottom quartile of engagement. Our research has also shown a strong association between engagement and revenue: business units with top-quartile engagement results have less deviation from their revenue budget.
The winning companies have created a culture of engagement in which it is possible to identify a clear correlation between engagement levels and business performance, including customer satisfaction, sales, operating margins and total shareholder returns. They have successfully created a workplace experience that does not just revolve around pay but around a robust and comprehensive employee value proposition, positively affecting performance and profitability.
Partner, Aon Hewitt Middle East and Africa