We have been writing a lot recently about the need for a change in how we think about attracting, retaining and developing people in the ever-changing business world. This goes way beyond the recruitment industry, and it is more than just theoretical pondering or hyperbolic futurist thinking. This is affecting businesses at all levels, in all industries across the globe.
The simple fact is the current approach to attracting, developing and retaining people isn’t working.
If we don’t do these things in the right way, employee engagement and trust will suffer.
While the definition of employee engagement and how it is measured is hotly debated, there is ample research to show that having engaged employees and high-levels of trust in the workplace are leading indicators of success in business. This will only become more important in an ever competitive and uncertain world.
While focusing on the individuals is only one piece of the puzzle, we believe it to be the most important starting point. It is from the people of an organisation that the business’s competitive advantage is established. Without trust and engagement this will not happen.
Employee engagement doesn’t mean employee satisfaction and it is not the same as happy employees. Just because someone turns up Monday to Friday 9-5 and doesn’t complain doesn’t mean they are engaged.
In its work with the Kingston Engagement Consortium, the CIPD has defined employee engagement as “being positively present during the performance of work by willingly contributing intellectual effort, experiencing positive emotions and meaningful connections to other”.
Beyond the benefits of a happier and healthier workforces, research indicates that increased employee engagement leads to improved business performance:
• A Study by Towers Perrin (2004 European Talent Survey) found that engaged companies have 6% higher net profit margins
• According to Gallup, the retail chain B&Q added an extra £70 million a year to its sales from increased engagement.
• A Kenexa study conducted across 39 organisation found that those with highly engaged employees achieved 5X higher shareholder value over 5 years
With all of this evidence that says quite clearly that employee engagement is important and good for business, it might surprise you that employee engagement around the world is falling.
Modern Survey in Minneapolis takes a constant temperature of motivation and engagement on the U.S. labour market. In May 2012, the survey showed that 67% of the workforce were either under-engaged or un-engaged. A tremendous number, yes – and the study also notes that only about 10% are fully engaged. In the UK, the CIPD with Kingston Engagement Consortium found that less than a third of employees are actively engaged (Source: CIPD (2010) – Creating an engaged workforce).
True employee engagement will never be achieved without trust, especially in our leaders.
According to the 2013 Edelman Trust Barometer, less than 20% of respondents believe leaders are actually telling the truth when confronted with a difficult issue in their organisations. Furthermore, a study conducted by the Human Capital Institute and Interaction Associates in 2013 found only 34% of organisations had high levels of trust in the places they work, and a mere 38% reported their organisations had effective leadership running the show.
While trust in business has improved since its all-time low during the Great Recession of 2008, research indicates a reputation hangover for business.
Reputational damage in the eyes of the public is also damaging to those of employees, if not more so. Businesses are not engaging their employees and improving trust in business, and it is having a negative impact on the bottom line.
So what’s next?
At Head Resourcing we believe that to win in the marketplace, we must first win in the workplace. That is why building trust and engagement remains front and centre of everything we do.
We’re not the only ones. In the recent 2014 Deloitte Global Human Capital Trends research, 78% of business leaders rate retention and engagement as being urgent or at least important.
It’s time to start making some changes and that is why we are so passionate about changing how businesses approach not just hiring but also retaining and developing of staff.