Declining Employee Engagement

Employee Engagement – def. from Wikipedia –  An “engaged employee” is defined as one who is fully absorbed by and enthusiastic about their work and so takes positive action to further the organization’s reputation and interests. An engaged employee has a positive attitude toward the organization and its values. In contrast, a disengaged employee may range from someone doing the bare minimum at work (aka ‘coasting’) to an employee actively damaging the company’s work output and reputation.

Each year Gallup conducts a global employee engagement survey using the 12 questions (factors) that have defined this concept for decades. The percentage of engaged employees has remained flat at about one-third of the for nearly two decades.  There was an improvement to 36% in 2020 but a decline to 34.5% in 2021 and 32% in early 2022.

So, what’s happening here or, more accurately, why is it happening? I have some theories as follows:

1. One of the impacts of COVID has been a re-examination of work-life balance by the workforce. Then came the Great Resignation, which persists beyond the time of payments to workers during COVID.
2. Millennial and Gen Z generations place greater importance on their work experience, opportunities for advancement, and development. When those go unmet, they are inclined to move on.
3. Raising engagement scores or solving the engagement riddle has been given over to Human Resources departments. Based on their ongoing research, Franchise Business Review continues to advise, “By introducing, implementing, and organizing employee engagement activities, HR can foster a stimulating workplace that values each employee’s individual contributions and recognizes productive collaboration…Lastly, the HR department must play the role of gatekeeper for employee engagement.” Herein lies the problem, HR is often viewed as the gatekeeper rather than the creator and nurturer of best practices. A gatekeeper is not needed, but rather a champion, a meaningful level of investment, and evaluation to define and disseminate best practices by individual managers.

Is raising engagement worth it?

A 2013 Gallup poll found that the actual cost of employee disengagement was $2,246 per disengaged employee.  Thus, if you had 100 disengaged employees in your organization, the cost would be at least $224,000. Other estimates place the cost at anywhere between 18%-34% of an employee’s salary. Nationally, the impact of these estimates is $400B.

What about the opposite?  Is there benefit to engaged employees beyond just the elimination of the costs just mentioned? Gallup reports on this as well. Specifically, companies with engaged employees are 21% more profitable, experience 59% less turnover, 41% less turnover, and 10% higher customer ratings.

Given the costs of disengagement and the potential profits from engagement, it is worth exploring if effective engagement programs can be deployed and if they would generate a return on investment.

 How to raise engagement

A 2020 blog from Give and Take Inc. cites the following 7 causal factors of disengagement:

• Recognition shortfall
• Micromanagement
• Lack of communication
• High levels of work stress
• Lack of empathy
• Absence of good employee relationships
• Lack of transparency

My experience is that quality of the relationship between employee and manager primarily determines and/or impacts these factors. The manager is the employee’s window to the company; the primary connection of influence and the source of potential cures to most of the causal factors. Therefore, to improve employee engagement, an investment in manager training and development is invaluable as opposed to HR-driven programs to raise connection to the organization.

But organizations generally under-invest in training their people managers.  Case in point, a recent study found that 84% of managers received no training in their first three years. The following are the knowledge, skills and actions people managers need to raise engagement:

• Understanding that the product of people management is people development not supervision or oversight
• Commitment to helping employees reach their full potential
• Knowing how to establish and maintain meaningful relationships
• The ability to communicate effectively in one-on-one meetings
• Understanding how to give honest feedback that is constructive
• Empathy and the ability to deal with employee personal problems that are impacting their performance
• Diagnosing and correcting lapses in people management that lead to reduced performance and disengagement
• Gauging the level of motivation to correctly identify those who are pretending
• Coaching and mentoring
• Development and execution of action plans by the manager and employee to raise performance or reach employee goals
• Building teamwork and improving team performance

A tall order to be sure.  Notice that the primary focus of good management training is not how managers can best get employees to do their work tasks (task management), but rather, how managers can coach employees to a higher level of performance overall (people management). With the one, comes the other, i.e., teaching your managers better people management skills naturally encourages higher performance in employees, while building employee engagement and commitment to the organization.

I cover much of this in my book, Creating High Performers[1] and detail an easy-to-use methodology I now call The Question Method® that has been proven to raise engagement. The Question Method® is a low-cost, easy to implement means to achieve higher engagement scores and thus higher performance. If you are interested in learning more, contact me or grab a copy of the book.

[1] Dann, W., Creating High Performers, Growth Press, 2021. Available at Amazon, Barnes & Noble, Bookshop