Michelle Rodger: Engaging staff – it's a very good place to start

Published on Saturday 8 May 2010 15:02

EFFECTIVE employee engagement. It's a phrase that has been bandied round boardrooms the length and breadth of the country since the government launched a series of advisory materials highlighting the importance to the economy of happy, loyal staff.

It's common sense really: a happy workforce means increased productivity, innovation, competitiveness and lower rates of sickness and absence. Conversely, disgruntled, dissatisfied employees can damage your business.

But if the latest indicators are to be believed, the impact is more significant than most of us would appreciate.

The cost of disengaged employees to the economy was between 59.4 billion and 64.7bn in 2008, according to Gallup. A report compiled by the Hay Group identified that engaged employees generate 43 per cent more revenue than disengaged ones.

And the Work Foundation says a 10 per cent increase in investment in good workplace practices would increase profits in companies by between 1,083 and 1,568 per employee per year.

As the UK emerges from one of the most challenging economic periods in memory, it is clearly more important now than ever before that companies realise the potential of their people.

Little wonder then that business leaders are backing a government initiative encouraging employers to put the principles of employee engagement into practice. Justin King, Sainsbury's chief executive, says employee engagement is about making sure that the 150,000 people that work for Sainsbury's understand what it is the company is trying to achieve for its customers, and why.

Philip Green, chief executive of United Utilities, says employee engagement is one of the key drivers of the success of any business.

And the CBI's director general Richard Lambert says one of the things that has become really clear in the recession is that employee engagement and trust between employer and employee have made it easier for people to come through the tough times in better shape.

Which is all very well for the big boys of business with big engagement budgets, but how does it translate into the SME world – the vast majority of UK businesses? And why is it so important?

Well, for starters, keeping your talent onside while emerging from the recession is key, especially if you want to manage the Meerkat Factor, where all your best people sit up, stick their heads above the parapet and look around for pastures new.

According to Jackie Loughery, founder of Oryx Solutions, recognising this and ensuring you engage creatively with and retain your top talent is crucial. Loughery insists engagement can be simple as well as effective. She cites the example of one company with ten employees which had a positive result from a monthly "ask the team" session, where the MD presented a strategic question or challenge to the team.

"Keep it simple, think about the way communication flows within your organisation and plan engagement carefully," says Loughery.

Employee engagement is just about how involved people are and how willing they are to give their best. For this to work most effectively, says Julie Moulsdale, founder of Perceptive Partners, people need to genuinely feel part of the organisation, involved in and consulted on important issues.

All companies have an opportunity to genuinely listen to employees and as a result identify the key issues which would make a difference to their working lives and, in turn, company performance. Moulsdale recommends the Sound Of Music approach: starting at the very beginning.

It's important to understand the starting point, so ask yourself how involved and committed are your employees currently?

There are some standard engagement measures against which to benchmark the responses, such as willingness to recommend the company as a good place to work.

Moulsdale also advises using this part of the listening process to identify employees' views on key issues to be addressed within the company, but warns you must follow up or risk your efforts being seen as lip service.

"If employees are genuinely consulted and involved in generating solutions to issues, this helps create a culture where individuals feel ownership and are more likely to be more committed," says Moulsdale. "The principles for this are the same whether an organisation employs five or 5,000 people."

So start at the very beginning and consider focusing on the top four or five issues that will make a real difference to your employees; talk, listen, seek their input and then deliver on the outcomes.

I recommend the government's series of guides containing practical ideas on how to address the key enablers of employee engagement (www.businesslink.gov.uk/employeeengagement)