The ultimate guide to employee engagement: Part 1

The ultimate guide to employee engagement: Part 1 | Insurance Business

The ultimate guide to employee engagement: Part 1
by Andrew Sumitani

Part 1 of 3

This guide is about a powerful idea — one that's well known by only some of the elite managers of the world. The funny thing is it's not top-secret information at all

This guide is about a powerful idea — one that's well known by only some of the elite managers of the world. The funny thing is it's not top-secret information at all. People have researched, written, and spoken about employee engagement for years. And the top managers have practiced and refined it over the last few decades to create tremendous value within their organizations.

For a variety of reasons, though, a vast majority of CEO's, VP's, Directors, and HR professionals still only half-understand it: this guide was created to change this.

Why this Employee Engagement Guide?
My goal is for you to understand the fundamental reason the very best managers reach the top and leave everyone else in the dark. I want you to understand how they are able to maximize the talent potential of their teams, regardless of what company they join.

By itself, understanding how the best do it won't make you and your organization awesome. It's a mere thought, after all. If you want to be like the top managers, you need to dedicate many hours of careful collaboration and experimentation with your team, all with the goal of improving employee engagement to drive business performance. Like learning to play an instrument or sport at a high level, you need to understand the steps required to improve, and then you need to practice, practice, practice.

I frequently use an analogy because I think it's super relevant: raising employee engagement is like losing weight.

It's not enough for you to queue up a workout video on YouTube, sit down with a bowl of chips, and expect to shed pounds. The workout video is a helpful tool because it contains the steps that will give you maximum value. The results only come when you commit to doing the work and being consistent about it.

My goals for you:
1. The first goal of this guide is to get you thinking about employee engagement the right way.
We talk to a lot of people about how to increase employee engagement and motivation, and most of them fixate on the wrong things. Then, even if they try to put in the work, they will be unable to succeed because they end up working on the wrong things.

2. The second goal is to motivate you.
If you read this guide and then work with your team to follow the steps in this guide, your organization and its employees can become far more engaged than they are right now. No, you probably won't become the next Sheryl Sandberg or Tony Hsieh. But most managers can create extremely engaged teams if they simply learn the right steps to improve, then put in the work to follow those steps.

I hope this motivates you. You can create an extremely engaged team of employees — significantly more engaged than they are right now — by committing to improving and following the steps in this guide.

Here's how the Employee Engagement Guide works:
This guide is super simple — I'll present three core concepts and show you how to best follow them, along with pitfalls to avoid. The reason for keeping it simple is that employee engagement remains a very loose idea for most people. Applying it correctly can easily get very complicated, so if something seems oversimplified, it's so that you understand the main point clearly.

Along the way, I'll point you to some other resources that will provide more detail and context. However, most of the top-level work in employee engagement is fairly exclusive and gets researched and presented at events like TINYcon and Bersin IMPACT.

The goal of this guide is to provide you some "aha" moments, show you what you may be missing, and start your journey to the top.

Let's begin!

What is employee engagement?
To improve employee engagement, you need to understand what it actually is.
According to Wikipedia, employee engagement is "a property of the relationship between an organization and its employees. An 'engaged employee' is defined as one who is fully absorbed by and enthusiastic about their work and so takes positive action to further the organization's reputation and interests."

Pretty dense stuff, right? Try this instead:
Employee engagement is the level of personal investment a person has in his or her work.

Let me simplify even further:
The more personally invested you are in something, the more it matters to you.

You become a bigger stakeholder in whatever "it" may be, whether it's your kids, your health, or your career. And you'll be far more likely to put more into it if the result is meaningful to you.

The same goes for your employees. The more personally invested they are in their work, the more it matters to them and encourages them to contribute more. Employee engagement is what you have to work on to raise everyone's level of personal investment. That way they increase their positive contributions to the organization.

Why is employee engagement important?
A fast-growing body of research demonstrates that employee engagement is a huge mover of fundamental metrics like retention and revenue. This is why senior executives and CEOs are clamoring to get a grasp and reap the bottom line benefits of employee engagement to the organization. But again, most are focusing on the wrong things and not following the principles in this guide. The problem is that these managers aren't working on how to consistently raise the level of personal investment by their employees.

Most companies guard their detailed performance data, but Gallup did a great job in their report called "The State of the American Workplace" correlating many performance outcomes with higher employee engagement.

Among those outcomes, there are two you should really care about:

1. Making more money
Let's get one thing straight. The financial impact of employee engagement can't be exaggerated: it's massive.

Over the course of a decade, Queen's University School of Business examined over 111,000 employee surveys on employee engagement. Organizations with the highest levels of employee engagement were consistent with 15% greater employee productivity and up to 30% greater customer satisfaction levels.

Gallup employee engagement statistics indicate that an engaged organization can lead to up to 18% higher revenue per employee.

If dollar amounts interest you, the Workplace Research Foundation has found that a 10% increase in investment in employee engagement can increase profits by $2,400 per employee, per year.

Organizations with high employee engagement also tend to withstand economic downturns and, when the economy picks back up, are able to run circles around their competitors.

2. Saving more money
In the US only 32% of employees are engaged at work, while only 13% are engaged worldwide.

Together with the fact that companies with lower levels of engagement experience significantly higher costs of absenteeism and turnover, you get the picture as to why employee engagement is important.

It's common wisdom that retaining employees is more cost effective than hiring new ones, so it's easy to see why low levels of engagement are super expensive. If you ever want to make money with your staffing, you should work on getting more employees to stay with the organization for longer.

Don't ignore the financial upsides of employee engagement.

And bonus (3.) -- a successful company culture!
I know I said there were two main benefits, but there's a third benefit that answers the question, "Why is employee engagement important?"

Raising employee engagement builds company culture.

Think about it:
A vast majority of companies still depend on a culture of hyper-competitive, self-serving behavior to drive results. It's a pernicious, but almost universal thought process. It goes something like this: "Competition will drive employees to do better as individuals, so the sum of their results will be better. Let the invisible hand take care of the rest." Unfortunately, this prevents employees from personally investing any more than the minimum that affects them as individuals.

When employees act not only to benefit themselves but the organization at large, they fuel this positive relationship and build culture at the same time. Don't forget: an investment in employee engagement is an investment in culture.

Read Part 2 here.


This article by Andrew Sumitani originally appeared in TINYpulse.