Employee Engagement for Global Employers: Nice to Have or Essential?
By Kathryn Hendy-Ford, Senior Manager, HR Advisory, Radius
Employee engagement. It’s a buzzword that conjures up a multitude of different things for employers all over the world. To some, employee engagement is something fluffy, even intangible — at best an HR “nice to have.” To others, employee engagement is fundamental to their business culture and working environment.
But what really is employee engagement, and what are its benefits to global employers?
The Essence of Employee Engagement
Employee engagement at its core encompasses the relationship that an employer has with its employees. This relationship is not built on a paycheque alone. It’s affected by everything from the employee’s office environment, available reward and benefits programs, day-to-day duties, and relationships with colleagues and management, to name a few important factors. And an employer should consider all relevant factors when determining what improvements can be made to ensure its employees are happy and engaged.
It should be emphasized that global employers with an international workforce must account for culture differences within the workforce. Cultural backgrounds directly affect how individuals and teams prefer to work and also what engages them. In today’s global economy, accounting for these differences in the workforce is an increasingly important HR area.
The Benefits of Employee Engagement
Studies show that an engaged workforce is likely to be a high-performing workforce. A 2015 Aon Hewitt report notes that their research found “a 5% increase in employee engagement is linked to a 3% increase in revenue growth in the subsequent year.” Further, engaged employees tend to have lower rates of absenteeism. A collection of statistics about employee engagement published in Forbes notes that “engaged employees in the UK take an average of 2.69 sick days per year; the disengaged take 6.19.”
The global business world has changed significantly in recent years. Multinationals previously measured their success and value almost solely in terms of machinery and products. Today, by contrast, most multinationals — particularly those in the software industry — see significant value in their employees’ knowledge, expertise and, importantly, wisdom (including a deep understanding of human relationships that is gained from experience). In other words, employers are increasingly recognizing the importance of their employees, and they’re taking action. According to Hay Group, their research demonstrates that “highly engaged employees are 2.5 times more likely to exceed performance expectations than their disengaged colleagues.” 94% of the most admired global companies believe that their efforts to engage employees have a direct link to the success of their businesses.
Given these trends, it’s no wonder that multinationals are enticing potential and current employees with substantial bonuses, salaries and benefits. But as we’ve noted, there’s much more to engagement than compensation and benefits. In fact, Gallup concludes that “money can improve daily emotions, but only up to a certain point. Once employees reach that plateau, this element of their emotional well-being doesn’t get commensurately higher, no matter how much they make. … By ensuring that workers are fully engaged and by focusing on holistic employee well-being, leaders can meet the needs of their employees, encourage them to stay and improve organizational performance.”
Measuring Employee Engagement
One tried and tested method of measuring employee engagement is to conduct a survey to determine employee opinions of the employment relationship. Another method is to assess a business’ performance-review process and its HR key performance indicators, including the number of departing employees and reasons for leaving, along with new-hire rates. Assessment results often provide great insight into an organization’s employee engagement levels. Global employers may see stark differences in survey and assessment results between different cultural groups within the wider workplace. Any action plans based on these results should account for these differences.
Speaking of action plans, a common employer pitfall is to measure employee engagement and then fail to act, or act effectively, on the results. Moreover, it is fundamental that employers keep employee engagement on their agendas year round, rather than dusting it off once a year by running a dead-end survey or paying lip service to the issue through a companywide email or similar communication.
Employers must focus on ensuring that any objectives or action plans for change have momentum and are purposeful, which typically includes obtaining vocal support from the highest levels of the organization. Involving employees directly in the ownership and accountability of engagement objectives or action plans is also a great way to ensure positive, lasting change.
It should be clear that high levels of employee engagement lead to high levels of employee productivity and retention. And the fostering of employee engagement should be on the business agenda for every global employer, no matter how big or small. Regrettably, there is no single solution that all businesses can follow to improve employee engagement, particularly in today’s global economy where multinationals typically manage culturally diverse workforces. It has never been truer that each business is unique and each employee is unique. That said, a tailored strategy to measure engagement effectively, and comprehensive plans to initiate improvements, can have significant positive effects on employee performance levels, and therefore on the success of a business.