What employee engagement really means

Why Employee Satisfaction Isn’t the Right Metric

Smart companies know that employee engagement leads to higher retention, profits, and growth.

With 40 percent of employers worldwide struggling to fill IT jobs, companies have gone above and beyond to keep their talent happy, dangling free day care, company cars, and liberal vacation policies.

But research shows that these companies are missing the mark if their goal is creating that star staff who feel so invested in the place they work that they go the extra mile even if no one is watching. Those employees don’t just have warm and fuzzy feelings of satisfaction, they are engaged. And employee engagement, which measures staff members’ level of motivation and potential for discretionary effort, is the marker that has a direct correlation to jumps in employee retention, profits, and growth.

“Simply put, engaged employees produce better business outcomes than other employees do – across industries, company sizes and nationalities, and in good economic times and bad,” states Gallup’s employee engagement survey.

Happiness isn’t enough

The statistics speak for themselves. There is little evidence that links employees’ happiness to their production – people have reported feeling “satisfied” at companies that are bankrupt. But Gallup reports that highly engaged business units show a 46 percent reduction in absenteeism, a 17 percent increase in productivity and 24 percent less turnover in high-turnover organizations. They also report 21 percent greater profitability and 20 percent higher sales.

Yet despite these benefits, most companies do a poor job of engaging their employees. Gallup states that only a dismal third of the U.S. workforce is engaged. Another quarter is actively disengaged, which means they are likely to look for other jobs – or worse, drag down the performance of their colleagues.

The threat of unhappy talent jumping ship is particularly alarming in the IT sector, which already faces a critical shortage of qualified staff. Turnover for IT positions has soared every year since 2012, as talented employees realize there are so many opportunities to choose from that they don’t have to tolerate any workplace they don’t like. The cost of this revolving door is high: replacing an employee generally costs between 90 and 200 percent of his or her annual income, according to the Society for Human Resource Management. In the constantly changing tech industry, where specific knowledge is crucial, this cost runs even higher.

Measuring intangible feelings

Here is where most companies go wrong: Sending out an annual employee satisfaction survey and then hoping managers learn something from it is not enough to spark a culture of engagement. Happiness may be a by-product of engagement, but it is not the only factor. Employees feel engaged when they believe their employers genuinely care about them, and that their opinions and hard work are valued. They feel pride and ownership toward their workplace when they feel part of the decisions that affect them, when they clearly understand what is expected of them, and when they believe that they are given the opportunity to do what they do best.

But such intangible feelings can be hard to measure. So what can employers do to find out if their employees are engaged in their company?

  • Start with regular pulse surveys. The simple fact that an employer cares enough to ask their employees what they think can have a significant impact on engagement. There is no need to make it complicated – ten questions about how people are feeling at work and if there is anything they would change is plenty. Keep in mind that these answers, assuming they are honest, only reflect your employees’ perception, which might not be the same as how engaged they actually are. And – this is critical – be sure to follow up. Surveys can have a negative impact on engagement if you act like the feedback doesn’t matter. It’s important that you show that you are listening and willing to address concerns.
  • Track how much work people miss. Employees who are engaged feel committed and show up most days at work. A high absenteeism rate will impact productivity – and eventually your bottom line. Have honest discussions about work with your team, and try to be flexible about letting them take lighter loads when they need to. The last thing you want is for someone to burn out.
  • Take a hard look at your turnover rate. Turnover rates below 15 percent are generally considered healthy across most industries, and 10 percent is ideal. Departments that seem to have revolving doors are probably in need of extra attention and care.
  • Watch for sudden drops. While there are certainly other reasons for declining sales, reduced customer satisfaction, and production slowdowns, they could also be signs that your employees are no longer engaged. If any of these suddenly occur, it’s time to check in with your staff to see how they are feeling about their workplace.
  • Give employees room to grow. Engaged employees have growth in every sense of the word: money, responsibility, opportunity. If your employees believe there is no room for them to grow, they will not feel engaged in your company’s future. Be sure to measure your company’s growth opportunities often, and every manager should prioritize the development of his or her team.
  • Make sure they are working as a team. People who feel bullied, ignored, or excluded at work are not likely to feel invested in what they do. Teams need to be able to work well together to achieve productivity. Although blending different personalities can be challenging, it’s your job to make sure the team feels connected. Engagement increases as people build more and stronger relationships at work.
  • Analyze how often they go that extra mile. Will your employees work outside of their normal hours? Do they participate in ad hoc meetings? Are they willing to help colleagues even if they might not get credit for it? If the answers to these questions are consistently yes, they are a strong indicator of engagement.
  • Be aware of how often your employees get feedback and recognition from their managers. Employees feel engaged when they clearly understand what is expected of them. Feedback is important for them to grow, and should be given regularly in ways that are specific and actionable. Monthly one-on-ones work well, but informal sessions can also be valuable. Make sure your managers also praise your staff at least once a week. Engaged employees know that their work is good and their contributions are appreciated.
  • Pay attention to how employees describe your company. Engaged employees are company ambassadors who speak passionately about your business when someone asks them about their work. If they proudly recommend your company to others at every opportunity, then they are probably feeling engaged.

As companies struggle to retain IT talent, measuring employee engagement can be just as critical as more traditional metrics. Engagement is the difference between employees just showing up and excelling at what they do. Employers who take time to understand what engages each member of their team will be rewarded with employees who come in early, stay late, refuse to job hop, and go above and beyond to deliver the best results for their company.

At Consultis, we’ve been delivering first-class project solutions, technical search, and contract services since 1984. Contact us to discover how the strong relationships we build with both clients and talent can help you find the perfect fit.