December 4, 2014 by Speakers' Spotlight
How Employee Engagement Can Boost The Bottom Line
Your people are your most valuable asset, and if you want them to excel―and your profits to soar―you need to abandon your traditional management style and adopt a collaborative, open leadership approach—one that engages and empowers your staff. Dan Pontefract, chief envisioner of TELUS Transformation Office and the author of Flat Army: Creating a Connected and Engaged Organization, shares leadership tools that push the boundaries of organizational change to create workplace cultures that shine. Below, Dan talks to The Globe and Mail about the importance of employee engagement in the office:
If employees are an organization’s most valuable assets, then there’s nothing more valuable than a highly engaged work force.
That’s because research has proven that job satisfaction can lead to higher sales, increased productivity, lower health care and attrition costs, and can even increase share value.
“When you prioritize happiness in the workplace, we’ve seen other [corporate] measures increase as well,” said Michelle Gielan, a partner at the San Antonio, Texas-based positive psychology consulting firm GoodThink, which has worked with one-third of Fortune 100 companies.
She points to a number of studies that have shown measurable benefits as a result of increased employee engagement that go well beyond recruitment and retention. A 2009 Kansas State University study demonstrated that engaged workers receive up to 25-per-cent higher job performance ratings, and employees who work in a less stressful environment tend to take fewer sick days.
Furthermore, a 2013 Gallup analysis that pooled the results of multiple studies, found that businesses scoring in the top half of employee engagement rankings nearly doubled the odds of success compared with those in the bottom half.
Ms. Gielan added that companies that strive to increase employee engagement are now putting more effort into tracking the effects, and are “able to measure the results, not just have a notion that it feels like a better place to work.”
One such organization is Vancouver-based Telus Corp., which says it has seen a myriad of positive results, such as higher customer satisfaction, lower turnover rates, an increase in job applications and also a boost in stock price, as its employee engagement score increased from 53 per cent in 2007 to 85 per cent in 2014.
Telus uses Aon Hewitt, a human resources consulting firm, to measure its employee engagement results. Their score is based on four measures – performance culture, a leadership index, employer brand index and engagement index – which is calculated and compared against Aon Hewitt’s country-specific thresholds.
Dan Pontefract, head of Telus’s transformation office – which helps Telus and other companies improve their corporate culture – said Telus’s workplace culture transition began in 2008 with the introduction of a new slogan: “Customers First.” It aimed to improve the company’s corporate culture and increase employee engagement with the belief that customer satisfaction would follow.
“All that work we did to build the culture, the people, engagement, all that has helped crystallize that ultimate quest of putting customers first,” he said. “An organization that isn’t investing in its people is an organization that doesn’t get the equation that employee engagement can equal customer satisfaction.”
Mr. Pontefract said the transition happened slowly, and involved changes to operating procedures, talent management and training, as well as the introduction of collaborative tools, employee recognition programs and a community ambassador program.
But he warned that increasing employee engagement by even a small margin, especially at a large organization, is no easy feat.
“You have to have perseverance, you have to have creativity, and ultimately you have to listen to your people when they talk about what the employee experience should be like,” he said. “This is not a 100-metre sprint; it’s an ultramarathon.”
Mr. Pontefract adds that the Customers First initiative was conceived after six months of collecting feedback from the company’s more than 43,000 employees.
“Don’t expect a miracle in a quarter or six months or a year. It takes heavy investment of time, patience and money.”
Though it took Telus several years to move the needle on their employee engagement scores, other metrics soon followed suit.
“Last year in the telecom industry, [overall] complaints went up 26 per cent; Telus complaints went down 27 per cent,” Mr. Pontefract said.
Though stock prices are dependent on much more than customer satisfaction and employee engagement, Telus has seen its stock rise with its renewed focus on its customers. It’s stock in 2008 was around $14 and it rose to nearly $71 before it was split in April, 2013. On Tuesday, the stock was trading in the $42 range. The total return on the company’s stock since 2008 is 98 per cent, according to Bloomberg.
“We get more and more inquiries from the investing community coming to us, asking for [employee satisfaction] data,” said Scott Dobroski, the community expert of Glassdoor, a California-based career website that allows employees to anonymously rate their employers. “If sentiment is going up or down, that’s a really good indicator of where productivity and overall growth and momentum of the company is headed.”
Mr. Dobroski speculates that part of the correlation between share value and employee satisfaction is tied to the cost of recruiting and training to replace dissatisfied employees who leave their jobs. The other part of the equation is the increase in productivity output from more engaged employees, he said.
“When employees feel more appreciated, they are willing to work harder and be more productive, and if people are working harder and being more productive, often times there is higher financial revenue growth, which directly affects stock performance,” he said. “Employees are the pulse of the company, and when they’re doing good, feeling good, and being more productive, it’s no surprise that their stock and revenue go up.”