Employee Engagement: The elephant in the room

Employee engagement is a much talked about subject. The 2014 Deloitte Global Human Capital Trends survey suggests 78% of business leaders rate retention and engagement as urgent or important. As many global economies start to recover from recession and think more about growth it is likely that employee engagement will remain a high profile business issue.

Employee Engagement isn’t new

The phrase has probably been in more general business use since the early 1990’s and has grown into the high profile subject it is today. So have we got it right? Has it made an impact, or is employee engagement just another management speak fad?

The short answer is, it depends who you ask. There is significant agreement on the benefits of having higher levels of employee engagement in a business. Increased productivity, staff retention, improved customer satisfaction, increased quality and of course higher profit. Things are less clear when it comes to the actual levels of engagement. Some (Aon Hewitt) suggest engagement levels in the mid 50% to 70% range, others (Gallup) put employee engagement levels at 13%. Now that’s quite a difference. In reality, these surveys are measuring different things, but whichever way you measure, it seems as though the same percent of the workforce was disengaged in 2000 as it is today, and that trend has been consistent throughout the last decade.

Measurement has really been at the heart of many employee engagement strategies since the beginning. Finding a way to consistently assess how employees feel about the key engagement drivers of Leadership, Brand, Company Culture & Policies, Performance Management, The work environment and the work itself has been a core focus. As more and more products and opportunities have become available the focus has shifted to more direct engagement activity. Work practices have been reviewed, suggestion boxes introduced, benefits packages have become more flexible, attempts have been made to make work more fun, work environments have become more creative; play areas, relaxing meeting spaces and I have even seen mention of ‘nap rooms’.

Now this is all good stuff and may well have yielded some result; remember the Hawthorne experiment from the 1950’s which suggested any change yielded short term performance improvement because it indicated management was paying attention and therefore seemed to care. We may be seeing a modern equivalent of this with the current engagement approach.

The employee engagement elephant in the room

The engagement elephant in the room

So where’s the elephant?

For me, there is something much more fundamental that is holding back employee engagement. Inequality. That is the real elephant in the engagement room. We are busy doing employee engagement to the workforce in the hope  of seeing improved profits rather than also making a better life for our people.

I have written during the height of the recent financial crisis about the dangers of the ‘fat cat mentality’. I am not trying to make a political statement in any way, but wish to highlight what I see as the real barrier topositive engagement. The gap between the ‘haves’ and the ‘have nots’ is getting wider.

 

Look at these figures from the Institute for Fiscal Studies. They show income growth after housing costs for three different percentile groups. I realise that I am making a somewhat simplistic comparison here, but think of these groups as workforce, middle management and the board or business owners. The trend is certainly shocking.

Employee engagement and the growing inequality gap

The growing inequality gap

 

There is clearly a political backdrop to this. The 60’s and 70’s were highly unionised environments and as a result businesses were forced to raise income levels for the workforce. Things changed dramatically in the UK at the end of the 70’s when the Thatcher government took on the unions and won. That moved the economy into a far more asset based system such that those who have asset have seen strong growth whilst those who don’t have struggled.

Although I’m from the UK and have used UK data in the graph above, it is a global phenomenon. The Organisation for Economic Cooperation and Development have just published a report highlighting the rising equality gap. It is at the biggest for over 30 years in 34 of their member countries. The report also stresses the major impact of that gap on economic growth, estimating it has a 7 percentage points effect.

To stretch my animal metaphor to its limit, we have been treating engagement a bit like we have zoos. As a child in the 60’s I could visit a zoo and see wild animals in a cage. Since that time, much has changed. Animals are now in enclosures, they have great diets and healthcare, there are tremendous conservation benefits from research and observation. Nowadays the animals are regularly given enrichment activities intended to mimic their natural habitat and behaviours to give them a better quality of life. Sound a familiar pattern?

‘We judge ourselves by our intentions, we judge other people by their behaviour’. However wonderfully well written our policies and communications are; however much we talk about trust, integrity, shared values, and all the other corporate speak words we like so much, our people judge us on our behaviour and interpret that for themselves.

If you are wondering why your engagement levels appear to be stuck, despite your best efforts, it may well be worth minding the gap.

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