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Wednesday, October 24, 2007

The Employee Engagement Gap

From Management-Issues, comes this article on The Disengagement Gap, in which a study by workplace consulting firm Towers Perrin found:

  • Many employees did not believe their organisation or senior management were doing enough to help or keep them engaged.
  • Just a fifth said they felt engaged in their work
  • More than a third admitting to feeling partly or fully disengaged.

The Global Workforce Study establishes a definitive link between levels of engagement and financial performance and, for the first time, begins to quantify that link. The most striking data about the linkage between employee engagement and financial performance come from a study of 40 global companies that involved a regression analysis of company financial results against engagement data.

  • Firms with the highest percentage of engaged employees collectively increased operating income by 19 per cent and earnings per share by 28 per cent year-to-year.
  • Companies with the lowest percentage of engaged employees showed year-to-year declines of a third in operating income and more than a tenth in earnings per share.

BOTTOMLINE: The importance of an engaged workforce on a company's bottom line is critical to its long-term success. "When companies are looking for every source of competitive advantage, the workforce itself represents the largest reservoir of untapped potential."

What to work on?

  • Communicate a clear strategy and how their work contributes to reaching the company's goals
  • Offer ways to have employees to enjoy challenging work that will allow them to learn new skills

"Turning people's energy and ambition into engagement – and ultimately into significant performance lift – demands attention, focus and some very different behaviours from senior leaders, as well as clear follow-through on a number of organizational practices."

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