What’s Employee Engagement? A key question for successful leaders

what's employee engagement?

Employee engagement in Europe and the UK continues to stagnate in a decade long trend. The COVID-19 pandemic made this worse, with 36% of employees in Western Europe indicating that their lives were affected ‘a lot’ by the pandemic and 24% indicating they lost pay due to the pandemic.

For organisations and people to recover, employee engagement has to be a priority. Moana Balasubramanian and Jeremie K. Brecheisen, from employment research group Gallup argue that employee engagement is vital to increasing performance outcomes coming out of the pandemic.

To improve, you must first ask “What’s Employee engagement?” 

Employee engagement is not employee satisfaction – your employee that comes in 9-5 without complaints. Engagement starts happening in the steps after that; in the extra effort that she does on her own.

Kevin Curse  – CEO of LEADx – gives this definition:

“Employee engagement is the emotional commitment the employee has to the organisation and its goals.”

Kevin Curse  – CEO of LEADx

Why does employee engagement matter?

Discretionary effort is the trait of an engaged employee; working on behalf of the organisation’s goals even when no one is watching. Numbers from Towers Perin research company show that engaged workers have 6% higher net profit margins. It is an essential part of workplace culture if a business means to grow or overcome difficult economic periods. A wide range of organisational outcomes rely on good engagement. Retention, safety, sales, productivity, and profitability all improve with engagement.

In addition, it is shown that engaged workers experience less workplace stress, making engagement key to employee well being. Therefore businesses who care about their employees’ well being, care about their engagement too. Satisfaction promotes well being in a less resilient way, problems may demotivate instead of encouraging solutions.

Why has engagement stagnated?

Stagnating employee engagement is down to several factors. Firstly, circumstances like the pandemic affect how the organisation must adapt to survive which involves making the future of some roles uncertain. However, companies with already high engagement tend to have better retention during difficult periods. An existing culture of engagement prevents the disengagement that comes from difficult periods.

Secondly, poor management can lack personal development strategies which are vital for engagement and a feeling of recognition in the company. To this end, better managerial training is essential. Many workplace factors contribute to engagement including knowing what’s expected of oneself at work, experiences of encouragement and development, and knowing how one’s daily work contributes to the purpose of the organisation.

These all have a stem in the leadership strategy, therefore, directors must put a culture of engagement from the top down so the employees can return organisational outcomes from the bottom up.

How to nurture engagement in your business

What practical steps can your business take? Kevin Curse uses the Engagement Profit Chain (EPC) to measure the ROI of engagement, because what you can measure, you can manage.

The EPC includes:

Higher service, quality, and productivity which leads to… 

Higher customer satisfaction, which leads to…

Increased sales (repeat business and referrals), which leads to…

Higher levels of profit.

Increasing funding and tracking returns on every one of these steps lets you measure how much engagement efforts are boosting productivity and profits. For instance, businesses need to provide managers with data so they can know where they stand and where they can take action. In other words, when management encourages employee development, productivity and well being increase.

Earlier we saw engagement defined as the emotional commitment an employee has to the business’ goals. This relies on the employee and employer finding a common set of beliefs. Gallup’s 2021 ‘State of the Global Workplace’ report evaluated employee’s views on environmental, social, and governance (ESG) criteria.

It recorded a historic shift in how business success is seen – positive impacts on people and the planet take on a similar weighting as profit margins. ESG alignment must come from the top down, be incorporated into managerial policy as part of a wider managerial shift towards employee development.

Where are you on the engagement journey?

Has the pandemic affected your employees’ engagement, are the levels of discretionary effort stagnating? If you need help with evolving your ESGs and creating a management trategy based on development, get in touch with Beagle HR. We offer results-based and flexible HR consulting. Get in touch, see where your engagement profit chain can improve.