Talent management describes a wide range
of activities, and not all positive. Most em
ployers have already frozen or restrained hiring
and many have downsized their workforce.
While both are at times necessary, it is our con
tention that the largest opportunity for corpo
rate performance improvement lies in engaging
the workforce to drive better customer engage
ment, better revenue and higher profits. Em
ployers that can improve employee engage
ment during the downturn will reap immediate
and long-term benefits.
The cost of employee disengagement is pro
found. In the aggregate, employee disengage
ment is estimated to cost the US economy as
much as $US350 billion ($435 billion) dollars per
year in lost productivity, accidents, theft and
turnover. For organisations, the difference be
tween an engaged and disengaged workforce
can ultimately mean success or failure.
What’s the difference?
The most important difference between en
gaged and disengaged workers is productivity.
Engaged and disengaged workers of equal
skills, knowledge and abilities do not contribute equally. Engaged workers are significantly
According to a 2008 study by Gallup, about
54 per cent of employees in the United States
are not engaged and 17 per cent are disen
gaged. Only 29 per cent are engaged. In Decem
ber 2008, Towers Perrin’s Global Workforce
Study of almost 100,000 employees in 20 coun
tries found that only 22 per cent of the US work
force is engaged, 66 per cent not engaged and
11 per cent disengaged.
Over the years, credible research based on
millions of employees and hundreds of organisa
tions has demonstrated the direct link between
employee engagement, customer engagement,
revenues and profit. Gallup, a leader in engage
ment research says the following: “Research has
shown that engaged employees are more pro
ductive employees. The research also proves
that engaged employees are more profitable,
more customer-focused, safer, and more likely
to withstand temptations to leave. Many have
long suspected the connection between an em
ployee’s level of engagement and the level and
quality of his or her performance. Our research
has laid the matter to rest.”
Why engagement counts
So why don’t more organisations do something
about employee engagement – particularly now,
when every dollar counts?
Employee engagement is driven by the fun
damentals in organisations. For it to be high and
stay high, an organisation needs a solid culture
and value system that supports the ingredients
necessary for engagement. Senior leaders have
to drive the process, “walk the halls” to demon
strate their commitment to employee engage
ment. Managers must be selected and devel
oped with employee (and customer)
engagement in mind and they must be held ac
countable, through a total rewards and perform
ance management strategy that aligns their de
sired behaviours, goals and outcomes with
those of the organisation. Employees must also
be made partners in the effort.
In most organisations, both the challenges
of engagement and the remedies to improve it
are daunting. But the payoff is enormous, and,
beyond the bottom line, it is arguable that – in
the near future, post-recession, beyond the
baby-boomer retirements and after the num
ber of companies investing in engagement reaches a tipping point – an engaged work
force will be a matter of survival. After all, who
would continue to drag themselves into work
every day for a paycheque when they can have
the paycheque and be highly engaged in their
work at the same time?
By Allan Schweyer, executive director, The Human Capital Institute
This article is excerpted from a research report by the Human Capital Institute entitled The Return on Engagement. The paper is available at www.hci.org.