Series: Six Fundamentals of Fast Growth (5)

an image of two women with smiling faces in a meeting

Author: Dean Hunter

Published: 22nd September 2016

 

Encouraging leaders and managers to introduce engagement processes can be tricky at the best of times. Managers are concerned about ‘opening a can of worms’ which is possibly not the best way to describe employees and how they are feeling. Keeping ‘the worms’ locked up can often lead to the creation of a toxic culture bogged down with disengagement and a lack of productivity.

So we’ve heard the stats, 36% of staff on average are engaged in the UK and only 47% of MD’s are engaged according to CIPD (2015). Have we ever considered the real cost of disengagement? After all it will never show on a profit and loss spreadsheet.

Achievers (2015) suggest that the average cost of disengagement could be as much as £3,400 in ever £10,000 of salary. So lets assume your average salary is £40,000 and that you have average levels of engagement. Your cost of disengagement with 100 staff is as follow:

60 disengaged staff x (£13,600) which equates to £816,000 per annum.

The costs are made up of non-productive time so we are assuming that from the payroll bill 34% of time (and pay) is non productive to the average organisation.

From the same findings, disengaged staff take up to 2.5 days more sickness than engaged employees and tend to make up to 100 more errors.

All of the time that managers spend focusing on day to day issues may not therefore be a competence issue within the team, it’s possibly a lack of engagement.

We define ‘engagement’ as the staff delivering even when you are out of the room. Not sitting on their iPhones and shopping online.

Many managers find it hard to link engagement to profitability. They tend to find the former very much as a nice to have and the latter as being much more tangible. If you link two terms with productivity it can help to clarify a link. We don’t assume in any of this that happy or productive necessarily means engaged. As we discussed in the last session around leadership engagement, incentivisation can lead to productivity without having engagement.

Many high profile brands like Marks and Spencer’s, Sainsbury’s and the like link engagement to profitability and declare 20% increases in productivity and profitability as outcomes.

Engagement is simple but hard work. Whilst surveys do take a pulse check in themselves, they are not engagement tools. So talk to your staff ) ideally independently facilitated), identify where you need to do better as an employer, address the top few critical issues and communicate what you have done – we call these ‘commitments’. This process gives the leader the chance to talk to the staff about things that matter to them. Often the leader talks about business growth, new projects, new tools and many of the staff may not be interested.

If average staff engagement levels are around 40% doing the basics simply isn’t enough. People want to know what their leaders stand for through embedded values or they assume profit is the only driver. they want flexibility in the way they work and how they are rewarded. They want to see a career path on paper, talk is cheap, a process is required. They all want to be communicated with in the way they want, so various methods of communication are required. If a bad decision is made by management then staff want the leader to intervene and acknowledge this. Lets face it, staff want a lot – and if they cannot get it then they may look to your competitors.

No leadership team can deliver their strategies alone. Having 40% of the staff engaged means you are overstaffed and unlikely to reach those goals you have set.

Get the fundamentals in place and head into advanced growth or plateau, fire fight and potentially go into decline. The choice is yours.

If you would like more information please drop us a line at: [email protected]

Dean Hunter is Founder of Hunter Adams, a UK leading HR consultancy which grew 2000% in its first three years of trade and was recognised as ‘Best New Company’ in 2015 (Scottish Business Award).