There is significant research findings that highlight the challenges of today’s workplace. Gallup research conducted in 2012 – which examined 49,928 business or work units and included about 1.4 million employees in 192 organisations, across 49 industries and in 34 countries – makes for worrisome reading (Gallup, 2012).
Gallup looked at employee engagement and the link with key indicators of business health. Employee engagement is defined as the degree of psychological commitment an individual has for her / his workplace and the degree with which they are likely to contribute positively to the workplace. People with low psychological commitment are more likely to lack motivation and to be unhappy at work to the degree that they are unproductive and actively negative.
Gallup found that the employee engagement had a considerable impact on a number of factors. Business or work units that score in the top half of their organisation in employee engagement have nearly double the odds of success (based on a composite of metrics) when compared with those in the bottom half. Those at the 99th percentile have four times the success rate compared with those at the first percentile.
Gallup also found that employee engagement affects nine different performance outcomes. Compared with bottom-quartile units, top-quartile units have:
- 37% lower absenteeism
- 25% lower employee turnover (in high-turnover organisations)
- 65% lower employee turnover (in low-turnover organisations)
- 28% less shrinkage (theft)
- 48% fewer safety incidents
- 41% fewer patient safety incidents
- 10% higher customer metrics
- 21% higher productivity
- 22% higher profitability
These numbers are valuable because they highlight an important fact:
Positive employees that enjoy their workplace create businesses that run better and provide a greater profit.
The Gallup study found that 24% of employees are actively disengaged, 63% are not engaged and only 13% are engaged.
In an article first published in Harvard Business Review in 1994 (Heskett et al, 1994), the authors highlight the fact that customer loyalty is directly linked to employee satisfaction. Customer loyalty is defined by customers who not only use the service offered, but also actively refer other people to the business. They become spokespeople in the community and will drive repeat business. The life time value of a loyal customer is considerable.