THE BUZZ
Insights into the forces shaping our industry's future.

Quote of the Month:

Knowledge has to be improved, challenged and increased constantly, or it vanishes.

Peter Drucker

August 2008

Let's Get Engaged!

by Ted Konnerth

I recently read an interesting White Paper on "The State of Employee Engagement" conducted by BlessingWhite*.  In their annual survey of companies world-wide, BlessingWhite measured the level of employee 'engagement'.   Engagement is defined by an employee's contribution to the company's success and his/her personal satisfaction in that role.  In a series of questions crafted to discern those characteristics, BlessingWhite reported the following results:

  • 29% of all surveyed employees in the US are 'fully engaged'
  • 25% of employees are 'almost engaged'
  • 25% of employees are either new employees or those who are disinterested or burned out
  • 19% of employees are fully disengaged

The number that screams out to me is that 71% of employees are not fully engaged.  This roughly parallels the classic 80/20 rule, although in this case it's 70/30.  When functional level within the organization was factored in, the survey found that VP's and above have 47% engagement levels, which still implies that 53% of VP's and CEO's are less than fully engaged in their positions.  If more than half of the leadership isn't fully engaged, then it explains the overall level of 29%... it's difficult to align your personal satisfaction and goals with a leadership that isn't aligned either.

So, why should we care if employees are 'engaged' when Woody Allen said 80% of doing a job is 'just showing up'?  Well, BlessingWhite compared Earnings per Share history across companies with varying level of engagement.  Turns out those companies with higher engagement levels experienced an EPS growth rate of 28%, versus a DECLINE of EPS of 11% in low-engagement firms.  Improving engagement levels apparently works!

One other big benefit.  BlessingWhite found that fully engaged employees were 85% committed to staying with their current employer.  The almost engaged group was 70% committed to staying and the remaining groups dropped off significantly from there.  The implication is that retaining quality talent requires attention to the engagement level of those employees.  With the cost of replacing an employee ranging from 100% to 300% of their annual income, engaging and keeping an employee is by far the best RIO of any management tool you could employ.  Developing management training and communication tools that improves alignment between company goals and employee goals will go a long way towards improving engagement levels.  In far too many companies, it's not clear what the company goals are.  Maybe the first step for any company is to simply define what the company goals are and then ask each employee if they feel they can contribute to achieving those goals.

In this candidate controlled market, I would strongly recommend that every client company have a formal retention plan to keep their key employees.  Embedded within that plan should be an element of recognition of the level of engagement and the degree of alignment between employee/employer goals and aspirations.  With an EPS that is 2.6 times better than lower-engaged employees, it's too hard to ignore.

*The State of Employee Engagement 2008 North American Review, BlessingWhite North America, Skillman, NJ, published April/May 2008, www.blessingwhite.com



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Survey Corner


Egret Survey of the Month:

What percentage of your current management staff do you believe will be retiring over the next 5 years? 

Please take 11.5 seconds to tell us to what extent you believe your company will be impacted by impending management retirement over the next five years.  We'll report the findings next month!

Click Here to take survey

Last month's survey question:

What has your company done to mitigate the increase in commuting costs for your employees? ( choose all that apply)

Responses:

10% increased or added commuting allowances

5% are giving gas cards

2.5%  are paying for mass transit

5% formally endorsed car pooling

10% are allowing more employees to telecommute from home


75% have made no changes
 

Population:

33.3% Manufacturers
43.6% Distributors
23.1% Others

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Industry Specialties:

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