The sentiment that happy employees equal happy profits may be yawn-inducing for HR – it’s nothing that the industry hasn’t recognised for the past several decades. Yet just how quantifiable is the correlation between happiness and productivity? The difference is some $32 billion.
The latest Employee Engagement Capability Report by RedBalloon and AltusQ put the average cost of disengagement at the multi-billion dollar priced tag based on research that just 18% of Australians love their work.
The report draws on the established knowledge around employee engagement and provided insights into why organisations and HR should continue to engagement front and centre of the business strategy.
The 2013 report found that organisations with the highest levels of engagement outperformed others in every single commercial metric - sales and turnover, percentage profit, productivity, staff retention, attracting talent, customer loyalty and satisfaction.
When compared to 2012 figures, the percentage of organisations with 80% or greater employee engagement reported the following improvements across key commercial metrics:
Productivity – 68.4%
Customer satisfaction – 64.1%
Attracting talent – 63.2%
Customer loyalty – 63.2%
Percentage profit – 60.7%
Staff retention – 50.5%
Sales and turnover – 50.4%
Other Key Findings:
1. Buddies. The difference between the top performers and the rest is that they know how to transfer strategy, processes and desired behaviours throughout their organisations. Think mentoring, buddying, coaching, recognition and internal networks that build a clear sense of purpose, well understood targets, strong recruitment, training and development programs.
2. Spend. It is not a simple matter of “spend X to get Y”. The report shows organisations are far more likely to achieve a strong engagement outcome if their spend is at least $1,000 per person per year. Some 50.3% of those spending $1,000 or more achieve engagement uplift, compared to only 29.4% of those spending less. Those with an engagement score of less than 80 per cent were also twice as likely to have cut their spend on engagement activities in the last 12 months.
3. CEO. The research shows that CEOs in the top performing companies are more enthusiastic about employee engagement than the Leadership Team or even HR. Mixing enthusiasm with responsibility will create an employee engagement program that is led from the front, achieving better results. But for the best results, everyone needs to have ownership and enthusiasm for the employee engagement reality.