Your workforce is one of your most important assets, but you could be on the verge of losing valuable employees who have lost interest or focus on the job.
According to research released in June by The Conference Board, just 47% of Americans are satisfied with their jobs. There’s nothing especially shocking about the findings: The New York-based economic and business research group notes that the last time a majority of Americans (52%) were happy at work was in 2005.
Despite their apparent dissatisfaction, most employees aren’t planning to leave their jobs, according to a study by BlessingWhite, a global consultancy with North American headquarters in Skillman, N.J. The BlessingWhite survey conducted last spring asked 3,500 employed professionals if they plan to remain with their current employer for the next 12 months. Some 56% of respondents said “yes, definitely” and another 33% said “probably.”
For employers, there is both good and bad news in those numbers.
The good news is that, at least for the near future, most companies are unlikely to be rocked by high levels of turnover. Turnover, as we know, can be costly. According to a 2008 Society for Human Resource Management Foundation report, the cost to replace an employee is about 60% of his annual salary.
The bad news is that some of those employees who are sticking around may be doing your company more harm than good.
In fact, a new study by Towers Watson, a professional services company with offices around the world, suggests that 63% of U.S. workers are not fully engaged in their work. And that lack of employee engagement, according to the study’s authors, makes companies more vulnerable to lower productivity, higher inefficiency, weaker customer service and greater rates of absenteeism and turnover. The cost?
“Gallup estimates that the cost of employee disengagement is approximately $300 billion in lost productivity,” says Sharlyn Lauby, president of ITM Group Inc., a consulting firm with offices in southern Florida. “That can equate to tens of thousands of dollars for an individual company.”
The numbers may be even higher in some industries, says Timothy Clark, founder and chief executive officer of TRClark LLC, a management consulting firm in the Salt Lake City area, author of The Employee Engagement Mindset, and an expert on leadership, change and employee engagement.
“For many people in many organizations, it still feels very much like the recession, even though technically we stepped out of it,” Clark says. Companies continue to hold off on hiring, requiring more and more from already-weary employees.
“There’s a lot of burnout,” he says. “There’s a lot of disillusionment with the workplace and with the economy in general.”
Whether you call it burnout, dissatisfaction or disengagement, the real risk for employers is that, as the economy improves and new opportunities emerge, they will lose key employees. As the studies indicate, for now, many employees are simply biding their time until things turn around.
Two groups, different issues
If employees are unhappy, why do they stay? Reasons vary, according to the BlessingWhite study. Among employees who were “most disengaged,” explanations included:
- Not feeling there are other job opportunities available (23%)
- No desire for change (17%)
- Favorable job conditions, such as flexible hours or a good commute (15%).
Disengaged employees represent an area of obvious concern for employers because of their potential negative impact on overall productivity and customer service.
Their more engaged colleagues represent a different challenge. These are the employees you hope will stick with you when employment opportunities begin to emerge in other companies. Their drivers are different, according to the study:
- They like the work they do (42%)
- They believe in their organization’s mission (17%)
- They feel they have significant career development or advancement opportunities (9%)
The feelings of these engaged workers provide some important clues for employers hoping to fend off an exodus as the economy improves. Now is the time to begin thinking about what your company can do to both increase the engagement of disenchanted employees and strengthen relationships with engaged employees so they aren’t tempted to jump ship when a headhunter comes calling.
Who’s responsible for engagement?
Morgan Norman is co-founder and CEO of WorkSimple, a social performance management system company based in the San Francisco Bay area.
“Disengaged employees will always be a problem in the workforce, no matter if we’re going through a recession or a booming economy,” Norman says. “The good news is that employers don’t have to do much to help with employee engagement. When employees are disengaged, it’s usually because of the following: They don’t get the proper feedback on their goals, they are bored in their current position or they aren’t credited with their achievements.”
There is truth in what Norman says. Employers certainly bear some responsibility for employee engagement. But by automatically putting the onus for employee engagement on the employer, companies may be missing key opportunities.
Through his research of highly engaged employees in 50 organizations across multiple industries, Clark discovered something that has enlightened the consulting work he does with both companies and individuals.
Engagement, he says, isn’t the primary responsibility of the employer—it’s the primary responsibility of the employee. While that may initially seem backward, highly engaged employees themselves understand.
“To a person, they have an attitude that says, ‘This is my responsibility,’ ” Clark explains.
This perspective represents a shift in thinking that has been entrenched among both employers and employees since the rise of the Industrial Age.
“We’ve sort of created a concept of a benevolent organization—meaning an organization that kind of takes care of you,” Clark says. “That’s wonderful, but what that has done over time is it has bred dependency. It’s bred a degree of learned helplessness in employees.”
Lauby cautions against confusing engagement with happiness and explains that fostering employee engagement requires “creating a workplace where employees care and contribute.”
And the creation of that type of workplace is the shared responsibility of both employers and employees, Clark says. The employee, he says, has the primary role; the employer, a secondary role.
“Both companies and employees share some responsibility when it comes to engagement,” she says. “Employers need to set expectations, offer training and coaching, and manage performance. Employees need to perform to the company standard, take an interest in their professional development and be full-time participants in the company business.”
Assessing your employees and culture
How engaged are your employees? Knowing the answer is critical, and Clark notes that many companies already conduct regular employee engagement or satisfaction surveys. Such surveys can point to areas where employee satisfaction is low or declining, as well as areas where employees feel more positive. While surveys can provide a useful quantitative perspective, Clark also recommends that companies take some time to gather qualitative perspectives through focus groups or one-on-one conversations with employees.
“Now is an excellent time to take inventory with people—to understand how they’re feeling and what adjustments need to be made,” he says. “Do a post-mortem on the recession. Obviously, the world has changed; it’s never going to be the same again. We’re going to define a new chapter.”
Your own internal employment data also can tell a story. Absenteeism, turnover rates, complaints and other factors can provide an indication of employee satisfaction relative to both a company’s own past performance and the performance of other companies in the same geographic area or industry.
Insights gleaned from broad industry reports and surveys also can provide benchmarks against which your company can be compared. For instance, consider some of the findings from the 2012 Aflac WorkForces Report, which is based on an online survey of 1,900 benefits decision-makers and more than 6,100 U.S. workers conducted last winter. The survey indicates that benefits are a big driver for employees, with 84% saying benefits were at least “somewhat” important in their decision to leave an employer and 50% saying they were “very” or “extremely” influential in their decision.
How do your benefits stack up against other employers in your area or industry? How satisfied do employees indicate they are with their benefit packages? Is their level of satisfaction declining over time? (The International Sleep Products Association’s Wage Survey–which is free to members–is a good resource for such information for mattress manufacturers.)
Other interesting findings from the Aflac survey include:
- More than one-third of workers who don’t believe their company has a reputation as a great place to work say they are “extremely” likely to leave in the next 12 months. To what extent is your company considered a great place to work?
- One-third of workers who don’t believe retaining employees is an important priority for their employer say they are likely to leave. What messages are you sending your workforce about the importance of retention?
- Workers who say they are stressed out are nearly twice as likely to leave their jobs as workers who aren’t stressed. What is the level of stress among your staff?
After areas of potential concern are identified, you can take steps to help re-engage and re-energize your workforce.
There are some simple things you can do: Listen to your employees, recognize their efforts and communicate regularly. Employees want to feel valued and know that their contributions make a difference. Really making a difference, though, requires a concerted focus on your culture and a partnership between you and your employees.
Clark’s book, The Employee Engagement Mindset, outlines specific drivers of engagement: shaping, connecting, learning, stretching, achieving and contributing.
In terms of shaping, Clark says, “As we observed and learned about this, what we identified is a pattern where highly engaged employees customize their professional experience as much as they can.”
That doesn’t mean, he says, that they can do everything that they want to do—there are constraints in any job. But, he says, “There are also opportunities in almost every case for people to customize or personalize or tailor their professional experiences to their preferences—the way they work, how they work, where they work, with whom they work. Again, there are real limits to that, but in almost every case there are things you can do.” A flexible, open-minded employer can help the employee create these opportunities.
In each of the six areas, there are roles for both employer and employee. As we discussed earlier, for the employer that typically means building a culture that fosters employees’ efforts.
“Managers and HR professionals are in a facilitating and enabling role,” Clark says. “They sit down with the employees and they put together development plans. They move forward in trying to support the employee as the employee applies these drivers.”
In addition to Clark’s six engagement drivers, there’s another that can’t be overlooked and that’s compensation, says Scott Rollin, president and founder of Management Compensation Resources in Edina, Minn.
Rollin says there has been increasing interest in compensation plans as “people are seeing some light at the end of the tunnel.
“Some employers are sending the message, ‘Hey, you’ve stayed with us through thick and thin and now it’s going to get thick and we’d like to share the business and some of that growth,’ ” he says.
But it needs to be focused sharing, Rollin says, not simply an entitlement program or an additional benefit.
“A lot of companies are doing a lot of thinking about how to implement that basic concept of how to share in the growth and the value of the business with their key employees,” he says.
Two years ago, Rollin says, companies weren’t giving raises and bonuses were nonexistent.
“Everybody was in the same boat, but everybody isn’t in the same boat anymore,” he says. “Large chunks of the economy are doing better.”
Finally, there are certain factors that might be called “reputational,” which can impact employees’ loyalty to a company.
“Your company’s reputation within your industry can be a mega-motivational factor for your existing employees,” says Tina Hamilton, president and CEO of hireVision Group Inc., a firm that provides hiring and human resource outsourcing services from its headquarters in Allentown, Pa.
“Building and sustaining a best-in-class reputation means identifying and measuring behaviors that consistently deliver a positive client experience,” she says. “And it’s normal for good workers to want to be a part of a winning and respected team.”
Strong brands foster loyalty and pride among employees. And, she says, “stellar employees like working where there are other stellar employees.
“You can develop this sort of team with high performance standards, absolute accountability and commensurate rewards and recognition.”
What’s the single most important thing that companies can do to help their employees and ensure their continued engagement?
“Communicate, communicate and communicate some more,” Lauby says. “If companies want their employees to be engaged, they have to share information. It sends the message that the company cares.”
Reducing turnover in a recovering economy
Here are 10 tips for keeping your employees satisfied and on the job, courtesy of Linda Henman, owner of Henman Performance Group in Town and Country, Mo., and the author of Landing in the Executive Chair: How to Excel in the Hot Seat.
- Compensate employees fairly. Don’t pay an average wage unless you want to settle for average employees.
- Treat workers fairly.
- Require managers to develop the employees in their chain of command.
- Give employees opportunities for advancement. Even when you can’t increase their salaries or give them new titles, you often can make their work more interesting. Let them specialize or cross-train.
- Know your people. Understand what motivates them and what they find interesting. Give them opportunities to do what they enjoy and to avoid what they don’t like.
- Be predictable and steady. People won’t work long for volatile, erratic leaders.
- Create a company that people are proud to work for and that they know will be around for years to come.
- Hire well. People want to play on a winning team and they resent having to take up the slack for others.
- Give ongoing feedback, not a once-a-year performance review.
- Listen to your employees—both their ideas and their emotions.
Little things can mean a lot to workers
Salary is not the only driver of high performance and employee engagement. “Increasingly, people care about finding purpose in their work, rewards beyond just their paycheck and a day-to-day work environment that suits them well,” says Elizabeth Cogswell Baskin, president and chief executive officer of Tribe Inc., an internal communications agency in Atlanta.
Baskin encourages employers to consider offering at least one or two “shiny hooks” or “benefits that catch the imagination.”
Here are some examples:
- Allow employees to bring their well-behaved dogs to the workplace.
- Offer college tuition reimbursement for employees’ children.
- Bring in a licensed massage therapist to offer Friday afternoon chair massages.
- Encourage employees to turn off cellphones in the evening and during weekends.
- Provide a concierge to run errands for employees.
- Offer company-paid monthly housecleaning services.
- Allow employees to spend a certain percentage of the workweek on independent projects.
- Create a quiet room for meditation or naps.