Don’t marry your employees…
The recession is receding. Having cut expenses and laid off employees, you are now operating with a lean workforce and focusing keenly on building revenue, maximizing profit and generally improving business outcomes. So as 2010 gets underway, what lies on the road ahead for you?
According to The Conference Board CEO Challenge Top 10 Report, here are the top three challenges and priorities facing business leaders today:
• Sustained and steady top line growth
• Customer loyalty and retention
• Profit growth
Research results mentioned in an article about managing human capital from Deloitte Consulting Managing Talent in a Turbulent Economy, reveal that 49 percent of employees are either looking for a job or plan to look for a new job over the twelve months following the end of the recession. Only 37 percent of Generation X employees (those between the age of 31 and 45), and 44 percent of Generation Y employees (those under age 30) are planning on staying put. Employees stated they are leaving for the following reasons:
• A real or perceived lack of opportunity for advancement
• Having borne the brunt of keeping companies afloat during the recession, they feel they are not appreciated or valued
• Their compensation is not commensurate with their contribution
• They are unhappy with their managers
Deloitte Consulting predicts that headcount reductions and other cutbacks will give way to the need to retain employees and focus on their development. At a cost of one to three times annual salary to replace each employee, not paying attention to retention could destroy some companies that are already struggling to stay afloat. However, almost one quarter of companies surveyed are doing nothing about it, or are unaware of the impact that retention has or will have on the bottom line.
Recent studies by Towers Perrin and the Gallup Organization that compared the financial results of those businesses that had high levels of engagement with those that had low levels of engagement showed significant differences in such measures as net income growth, earnings per share, absenteeism, turnover and customer retention. We also know from countless other studies that engaged employees tend to stay put for longer, are more creative, and play a pivotal role in boosting customer loyalty and retention through providing excellent service and going the extra mile.
The Bureau of Labor Statistics’ latest data on workplace disengagement inform us that employees across the nation, across all industries, are disengaged an average of two hours per day (and some estimates more recently go as high as 3.5 hours per day). You can do the math with your organization’s own numbers, but if you take a rough cost estimate of $35.00 per employee per hour, and you have 100 employees, that equates to an annual cost of disengagement at $1,680,000!
Putting all this information together, it makes sound business sense to put top priority on engaging your employees. Now more than ever before, your employees are the main driver behind positive business outcomes.
Sounds like a plan, but exactly how is that done? While there is no “one-answer-fits-all” response to the question, here are some things to consider:
• Run an (anonymous is best) engagement survey to get the current engagement level in your organization
• Ask your employees what improvements they would suggest that would result in them being more involved with their jobs – outside facilitation may be necessary to ensure confidentiality, trust, and honest responses
• Find out how you can establish a culture of engagement in your company by customizing an Engagement Model
• Keep in mind the six Engagement Model Principles: