Employee Engagement Is a Financial Strategy
We spend a lot of time talking about creating employee engagement. The rationale being that engaged employees are highly productive. And productivity fuels the business.
In creating employee engagement, we need to think about employee satisfaction. I don’t see how a dissatisfied employee becomes engaged. It seems like their dissatisfaction with the company, their manager, their work, etc. is a barrier to engagement. On the other hand, employees who are satisfied with their organization, team, manager, work, etc. have opened the door to engagement. While it’s not a guarantee, they’re one step closer than the dissatisfied employee.
So, the question becomes, how do organizations achieve employee satisfaction? According to Jacob Morgan’s book “Employee Experience Advantage”, it’s about creating an outstanding employee experience. His research indicates companies that invest in the employee experience are four times as profitable as those that don’t and have more than two times the average revenue.
This research is supported in the Globoforce white paper “The Financial Impact of a Positive Employee Experience.” Their research reported that organizations that score in the top 25 percent on employee experience have nearly three times the return on assets compared to organizations at the bottom of the list.
My takeaway from these two pieces is that companies making investments in employee experience and engagement are doing so for more than feel-good feedback. The employee experience and employee engagement are key components of the company’s financial strategy. And senior managers not only need to thinkabout it that way but talkabout it that way.
For a moment, think about the other components of your organization’s financial strategy. Or your own personal financial strategy for that matter. It probably includes things like sticking to a budget, making investments in the future, and having an emergency fund. These are excellent strategies whether you’re a global corporation, small business, or an individual. And they are about more than money.
Organizations need to create compensation and benefit programs that are internally fair and externally competitive. The conversation about employee satisfaction and engagement isn’t about throwing money at employees. It’s about delivering value.
Companies should invest in employee’s futures with training and development opportunities. Employees want to know they have a career with the company. They want to know that managers support their career goals. Companies need to set aside a budget for employee development.
Finally, organizations need to realize that sometimes stuff just happens. And they have to spend money they didn’t budget. Sometimes organizations need to open their wallets and do the right thing like buy an employee a nice office chair when theirs breaks. Or have a celebration when they score a big account.
Years ago, there was this trend to rename human resources as human capital because “employees are the company’s greatest asset”. Some people balked at the idea saying that employees aren’t assets because … well, they’re human. In this case, we’re not saying that employees are the same as furniture, fixtures, and equipment. Because they’re not.
But employee satisfaction and employee engagement have value. Measurable financial value. And organizations need to recognize that … or they run the risk of leaving money on the table.
Image captured by Sharlyn Lauby while exploring the streets of Boston, MA
25