The Gallup 2017 State of the American Workplace report is the finger on the pulse of employees in America – how much they love or hate their work, when they’ll leave, and how engaged they are. The purpose of the report is to give leaders the statistics they need to optimize their ability to attract, retain, and engage talent.
Since the expectations, needs and wants of workers is a moving target – it changes by age, economic climate, political uncertainty, etc. – the findings of the report change every year. But there has been a definitive trend on engagement.
Actually, the lack of engagement.
And we think this is because while the expectations, needs and wants of workers have been changing, the businesses they work for haven’t been responsive. Today’s workers need to feel part of something larger, invested in a purpose, and supported as whole human beings. But don’t let us tell you. Here’s what Gallup has to say about employee engagement in 2017.
“Most workers…approach a role and a company with a highly defined set of expectations. They want their work to have meaning and purpose.” – p.5
This is an increasing factor in millennial hires, and considering they are now the majority of the workforce, this is an expectation that will transform the way in which we do business.
“What is most important is that candidates come away with a sense of why a company exists, what its reputation is and how it is positioned to capture more customers. Any company can say it has been around for ‘x’ number of years, but employees need to hear a story that resonates with them — one that is unique, genuine and compelling.” – p.28
Your employees are the first and best ambassadors of your brand. They’re at every customer touchpoint. Their opinion of you matters, because that is the feeling they’ll translate to your customers.
“Employees want to feel good about their organization and what it offers the world. They want to be able to say, ‘I like what this company stands for.’ If employees do not believe in their company or do not believe the company can successfully uphold its brand or reputation, they are likely to look for a different job.” – p.29
This is what we call an “Engaged Purpose.” It’s the higher purpose everyone in your company can align with and work towards, and it should be something that has a positive impact on people and the world.
“Highly engaged business units achieve a 10% increase in customer metrics and a 20% increase in sales.” – p. 69
Engagement isn’t just good to have, it’s good business.
“Employees who are actively disengaged have the opposite effect on their organization’s prosperity and growth. They are more likely to steal from their company, negatively influence their co-workers, miss work days and drive customers away. Gallup estimates that actively disengaged employees cost the U.S. $483 billion to $605 billion each year in lost productivity.” – p.19
We think that cost is a conservative estimate. You don’t have to be actively disengaged to be less productive and deliver lower quality work – passively disengaged employees do so too, and when you have enough of them, create a culture of mediocrity. And that will cost you customers.
“Organic growth occurs within existing business through an engaged and high-performing workforce.” – p.191
When employees are engaged, their work and interactions with customers become nothing short of inspired. It’s the kind of energy that spreads. It’s the kind of energy that grows. And your customers will notice.
“Employees who are engaged are more likely to stay with their organization, reducing overall turnover and the costs associated with it. They feel a stronger bond to their organization’s mission and purpose, making them more effective brand ambassadors. They build stronger relationships with customers, helping their company increase sales and profitability. “ – p.18
Turnover is expensive, not only for the cost of training replacements, but for the hidden costs of having employees who really don’t want to be there in the first place. They’re not doing their best work. They’re doing just enough work to get by until they can leave. And forget being a brand ambassador!
“In high-turnover organizations, highly engaged business units achieve 24% lower turnover. In low-turnover organizations, the gains are even more dramatic: Highly engaged business units achieve 59% lower turnover. High-turnover organizations are those with more than 40% annualized turnover, and low-turnover organizations are those with 40% or lower annualized turnover.” – p.69
When turnover rates are healthy, they prune away underperforming employees and give engaged employees what they need to grow – personally and professionally.
“But in a uniquely human twist, employees want meaning in their vocation. In fact, for millennials, it is among the strongest drivers of retention.” – p.114
Numerous surveys have shown that Millennials don’t care as much about perks, benefits, or even pay, as they do about being actively engaged. And that means feeling connected to a larger purpose.
On Engagement Methods
“… achieving engagement is simply not as easy as putting together a survey to measure employees’ level of engagement.” – p.66
This sentiment is actually repeated in the Gallup report multiple times. Surveys aren’t enough. They’re a good start, but useless unless you follow up with action. It’s why we have ‘Action Plans’ as part of our process.
“Measurement does matter. But companies that base their engagement strategy on a survey or metrics-only solution can get caught up in a ‘rinse and repeat’ pattern that does nothing to improve their business. They focus on engagement periodically — usually around survey time. As a result, these organizations make false promises to employees, pledging change through intensive communication campaigns but providing little actual follow-through. “ – p.66
This is our central argument against most engagement surveys. They’re done once a year, and that’s the only time anyone thinks about engagement. (See our previous post about why annual surveys don’t work) And then very little (if anything) is done with the information. That “rinse and repeat” pattern tells your employees that you’re just paying lip-service to engagement, which of course, will have the opposite effect.
“When organizations effectively engage employees, they also improve the way they manage performance. Many organizations fall short of their performance goals, however, when they treat engagement as a thing to do or a survey to complete rather than a continuous way to manage and develop people.” – p.124
Engagement, effective management and improved performance are intrinsically linked. Gallup wisely makes the case in this report for a more “coaching” managerial style that focuses on developing talent in an ongoing way, rather than the old-fashioned managerial style of annual employee reviews.
“Employee engagement has barely budged over the past decade and a half. At times, the metric has stagnated, and at other times, it has even retreated. From 2012 to 2016, employee engagement increased by just three percentage points. The U.S. — and the world at large — is in the midst of an employee engagement crisis.” – p.61
Gallup has said for the past several years that we are in a “Global engagement crisis.” It’s true. And never has engagement been so important, both to employees and sustainable business practices. We simply can’t afford to be disengaged anymore.
- “Engaged: Employees are highly involved in and enthusiastic about their work and workplace. They are psychological “owners,” drive performance and innovation, and move the organization forward. Not engaged: Employees are psychologically unattached to their work and company. Because their engagement needs are not being fully met, they’re putting time — but not energy or passion — into their work.
Actively disengaged: Employees aren’t just unhappy at work — they are resentful that their needs aren’t being met and are acting out their unhappiness. Every day, these workers potentially undermine what their engaged coworkers accomplish.” – p.63
Ownership and accountability is a huge factor in engagement, which is why we often talk about the LEO program (leaders of engaged organizations). These employees volunteer to spearhead – and take ownership of – engagement projects, independent from management.
“Highly engaged organizations share common philosophies and practices. For example, they know that engagement starts at the top. Their leaders are aligned in prioritizing engagement as a competitive, strategic point of differentiation. They communicate openly and consistently. They place the utmost importance on using the right metrics and hiring and developing great managers.
Highly engaged organizations also hold their managers accountable — not just for their team’s measured engagement level, but also for how it relates to their team’s overall performance.” –p.72
Engagement does, indeed, start at the top, which is why we only work with brave, caring, identifiable owners who are willing to lead by example.
Transferable Insight: Notice how closely linked purpose and retention are. The people who stay are the ones who feel connected to your purpose – they like what the company stands for and understand how their work contributes to it. An Engaged Purpose is the core of our program for that very reason. It is the foundation of everything we do to improve employee engagement.