There’s no question that employee engagement is one of the most important topics that companies face, especially when dealing with today’s workforce. Not only does poor engagement lead to poor productivity, but it also leads to a higher turnover rate within organizations.
A report by the U.S. Department of Labor’s Bureau of Labor Statistics shows that millennials, now the largest generation in the American workforce, have a medium tenure of only three years. That’s less than a third of the tenure among people aged 55 to 64 years old! This high turnover rate costs U.S businesses a LOT of money (as much as $11 billion annually according to the Bureau of National Affairs).
“We know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment, and loyalty,” said Craig Jelinek, CEO of Costco.
The problem isn’t a lack of awareness around the topic. In fact, businesses in the United States invest over $720 Million annually to improve engagement. But despite this effort, only 24 percent of executives say that employees in their firms are highly engaged and Gallup reports that 7 out of 10 workers are either not engaged or actively disengaged in their role.
So what are companies doing wrong?
Most leaders think that the key to employee engagement is in making employees feel valued, when in reality it is helping employees learn how to create value. Increasing employee benefits, such as game rooms, paid trips, catered meals and company parties, can help an employee feel valued, but it isn’t enough to drive long-term engagement.
In a survey done by The Corporate Leadership Board, employees from all over the world reported that the single most important lever for driving engagement is a strong connection between work and organizational strategy. The second most important lever is the importance of job to organizational success. This means that employees are engaged when they have a clear understanding of why their role is important and how it contributes to the organization’s success.
Sounds simple enough, doesn’t it?
A Harvard Business Review article shared that “on average, 95 percent of a company’s employees are unaware of, or do not understand, its strategy.” That’s a big problem! When only 5 percent of employees understand corporate strategy, it’s no wonder that only 3 out of 10 workers report being engaged in their role. How can employees be expected to connect their work efforts to the organization’s strategy and success, when they don’t understand what that strategy is?
It ultimately comes down to this: employees must develop their business acumen, or their ability to see the big picture, in order to drive long-term engagement. If an employee can first identify the impact that a project will have on the company, his or her team, and career, then that project will become much more meaningful than just busy work. And they’ll approach the task with much more enthusiasm.
Most people genuinely want to have a lasting impact on the business, they just don’t know how. Companies that figure out how to bridge this gap not only will have a workforce that knows how to impact the bottom line, but also will be more engaged in the long run.
So ask yourself. Are you trying to solve your engagement issues by helping your employees feel valued, or are you focusing on helping your employees create value? If it isn’t the latter, then you may want to rethink your strategy.
People will work hard for a paycheck, harder for a person and hardest for a purpose.