Businesses with engaged employees earn 25 percent more profit. Here’s how to do it
The secret sauce to companies with greater productivity, higher profits and lower staff turnover? Employee engagement.
The secret sauce to companies with greater productivity, higher profits and lower staff turnover? Employee engagement.
With research showing that businesses who get it right generate 25% higher profits than those who don’t, spending time on your approach to employee engagement is a solid business strategy.
It’s also proven to boost productivity by up to 20%, especially relevant in the hybrid work environment where productivity can be harder to monitor and maintain.
Focusing on employee engagement isn’t only for the people and culture teams of the big corporate end of town, it’s just as important for small businesses. Especially in a competitive landscape where having an engaged and motivated workforce is more important than ever.
Your most precious resource
Forget products on a warehouse shelf or real estate square meters, a company’s people are its greatest resource, so boosting employee engagement is a chance to build motivation, improve loyalty, and increase innovation.
People matter, and the way your people feel at work (and perceive their value within the business), can make a big difference in the way they show up each day. One study found that 59% of engaged employees say that their job ‘brings out their most creative ideas’, while only 3% of disengaged employees said the same thing.
What could you achieve if your people were bringing their best ideas and innovations to work?
Small business challenges
In recent years, we’ve worked with over 500 small businesses and they’ve shared their unique challenges around employee engagement, especially the need to prepare for and adapt to change and to bring their people along for the ride.
A possible recession and geopolitical instability are having an understandable impact on small business confidence. Many have been forced to slow down on hiring or reduce headcount, or they’ve lost great people and struggled to fill their gaps.
For small businesses that are stagnating or not in a period of growth, it can also be hard to retain talent, with people citing that the number one reason they leave a job is a desire for more opportunities to develop and grow.
But the good news is that an intentional approach to employee engagement can help small businesses retain their best people while boosting their productivity and profitability.
Here’s how.
Begin by measuring employee engagement
How you define employee engagement can differ from business to business, but at Culture Amp we use the term to define the level of enthusiasm, connection and commitment an employee has towards their organisation.
To measure this, we assess five key factors:
Motivation
Are they motivated to go above and beyond the basics?
Pride
Are they proud of where they work?
Recommendation
Would they recommend your company as a great workplace to other people?
Present commitment
Are they content enough to not actively be looking for a job elsewhere?
Future commitment
Do they see themselves continuing to work at your company in the future?
Taking the pulse of your overall employee engagement via a survey is a great way to measure your organisational health. It’s a chance to ask your people about their day-to-day experiences within your organisation and will uncover areas to celebrate and changes you can make to improve your employee engagement.
To get it right, you need to conduct a survey that contains clear and actionable questions, timeframes and communication channels, so that people can openly and honestly share their feedback. This isn’t just a casual chat in the tea room.
Understand your data
Once you’ve collected your employee’s responses, take some time to really understand what they’re saying.
Many companies will make the mistake of only focussing on items that are scored least favourably and choosing an action plan against them. At Culture Amp, we recommend companies leverage advanced analytics using a technique called driver analysis to prioritise the areas of the employee experience that will most likely shift the needle on employee engagement.
For example, if one of your top drivers is a learning and development question, it means that people who respond most positively to that question are also likely to be the most engaged.
Benchmarking survey results can also be helpful, but it’s not always relevant to compare your company to its competitors, especially if you’re looking to attract and retain people from a different industry. For example, if you’re a retailer looking to digitally transform your business then it might make more sense to benchmark the experience of those in the tech industry than your retail competitors.
Take action
You’ve asked your employees for their feedback. You’ve analysed the results. Next is the most important step of all: taking action.
Taking action shows your people you’ve listened to them, understood them, and are using this new understanding to create change. No one wants to feel like their input has been relegated to gather dust in a bottom drawer somewhere.
While you might not be able to action all of their requests or suggestions, show that you’re listening and making an effort to improve their experience. Even small changes can make a big impact.
Take a look at the survey results and get clear the focus areas where change is needed. Then, work out how these could be aligned with your organisational goals — this is a great way to prioritise what you’re going to implement first.
If you’re still stuck on choosing ‘what’s next?’, take a vote. Put it to your people, and ask them for their preferences between a few clear options. It’s another way to show just how much you value their input.
Don’t be afraid to test ideas, communicate progress and gather feedback as you start to implement change. Once you’ve got your employee survey framework in place, you can ask for feedback more frequently across the unique touch points your employees will encounter during their time at the company e.g their first couple of weeks at your company, following a performance review or at the time of exit.
Change can be challenging, so start small, and bring your people on the journey. They’ll reward you with productivity, ideas and loyalty, setting your business up for success now, and into the future.
To learn more, watch the full on-demand webinar here.
