It should be simple: pay people fairly, treat them well, give them meaningful work, and they’ll be loyal and productive employees for years to come.
So why isn’t this working? These days companies seem to be competing to offer more and more gimmicky perks to attract and retain star performers. And Bersin estimated in 2012 that organizations were investing $720 million a year on engagement improvement programs.
Yet, despite the free dog-grooming, laundry service and ping-pong tables, only a tiny fraction of employees are engaged in their jobs – 13% globally. The least engaged age group? Millennials. They’re almost twice as likely to be bored at work than Baby Boomers.
Why is this problem so prevalent right now? Gallup believes that resistance to change is a key factor – organizations are not adapting fast enough to new technologies, a globalized, distributed workforce, the gig economy, and younger workers’ unique expectations. Or perhaps we’re simply applying band-aids and not tackling the root of the problem.
But do you really need your workforce to be happy?
In a nutshell – yes. Low engagement is associated with a host of issues that can affect the organization’s bottom line, including low retention, poor quality, bad customer service, and lost business. In fact, it’s estimated that disengaged employees cost companies between $450 and $550 billion a year in the US alone.
Organizations that have high engagement are reaping the financial rewards: Best Buy discovered that a 0.1% increase in employee engagement was worth $100,000 per year at just one store.
Gallup found that businesses with highly engaged teams had 21% higher profitability, 20% more sales, 17% better productivity, and 40% fewer quality defects. They also experienced up to 60% lower staff turnover, 41% less absenteeism, and 70% fewer safety incidents.
And another study found that a 10% boost in employee engagement spending could raise profits by $2,400 per employee per year, and that increased employee motivation resulted in a higher share price.
So, if everyone is aware of the problem, then why aren’t we making any headway? There are certainly strategies that have proven effective, but unfortunately, they’re often poorly implemented, making the problem worse, not better.