Employee Engagement: The Impact
In the executive search industry, we support the hiring of leadership talent for a variety of different firms differing in both size and industry focus. What is a consistent theme across all of our clients however, is that they all want to hire the best talent possible.
We’ve been in a candidate driven market now nearing on 8 years, meaning that with the strong economy there has been an abundance of opportunities for candidates to consider and those with sought after skills have been able to drive up their price as companies compete for the same talent.
So How Does Employee Engagement Fit Into This?
As companies fight to hire and are forced into paying highly competitive salaries often in addition to head-hunter fees, the return on investment is important. Not only is employee engagement critical for retaining great talent once they join, it is a key factor in attracting candidates as they evaluate different opportunities; it can be a deciding factor in whether they join your company or your competitor.
As employers may carry out back-channel referencing on a potential hire, savvy candidates will be doing the same for a potential employer, using multiple digital channels and personal networks to get the inside scoop, and what better question to ask in the market than “what’s it like to work there?”
Employee Engagement as a Hot Topic:
Employee Engagement is a phrase that has been a hot topic for years with companies spending in excess of $750m per year on engagement surveys and solutions to increase the engagement rate, with this figure set to rise to $1.5bn (Bersin & Associates), but do we really understand what it means?
There are many definitions of Employee Engagement and it can mean different things to different people and organizations, however what is clear is that it’s a concept that goes much deeper than simply commitment to a company or job enjoyment.
Employee Engagement is a simultaneous occurrence of employees understanding or experiencing the following:
- how their job fits into the overall strategy of the business;
- job satisfaction based on the content of the work;
- how their personal values align with those of the organization;
- value of contribution and feeling that they have a voice;
- active support and recognition by their manager;
- enjoyment of the physical working environment
Engaged employees will typically demonstrate the following:
- desire to stay with the organization for a long time;
- actively act as an ambassador for the firm;
- bring their full self to work;
- produce high quality work (www.greatplacetowork.com)
Overall, high levels of Employee Engagement and Experience correlate to better organizational performance; a more positive working environment; higher customer satisfaction;, lower attrition and a healthier workforce (Gallup, 2018).
Engagement rates in the US have remained stable in the last few years due to a strong economy, with good job opportunities. Data from (Aon 2018), shows that they peaked last at year with 64% of the US workforce being ‘engaged’*, signifying that the US market remains a good place to do business. Historical data however tells us that when the economy declines, engagement levels will fall too (Aon 2015). The firms who have invested in creating an environment with high engagement and positive experience levels (as per the definitions above) are the ones who continue to outpace the market and attract and retain the best performers. (HBR, 2017) and equally recognize that it isn’t a short-term solution but a longer-term strategy embedded into the inner-workings and culture of an organization.
* There is some inconsistency around this figure depending on the source (this ranges between 34% and 64% and there is some complexity around how these numbers are derived. What is consistent across sources however, is that engagement rates are at the highest seen in the last decade.