It’s win-win for staff and bosses

Failure to engage the effort, enthusiasm and invention of employees is costing the British economy billions, writes Edwin Smith

There’s often nothing quite like a statistic about cold, hard cash to put a subject into context. So let’s begin with one: £26 billion. That’s how much the UK economy is missing out on each year because of poor employee engagement, according to a study by Kenexa. Others have suggested the total may be even higher.

The Kenexa report shows that two thirds of the UK’s 30 million workers were “disengaged” – effectively going through the motions at work and not exerting the full force of their creativity, intelligence or effort.

And there’s worse news. Although different research into levels of engagement throughout the world presents some variation, the conclusion that the UK is some way behind a large number of competing economies is a recurrent theme. Indeed, old economies across Europe lag behind the rest of the world.

According to a 2013 study by Aon Hewitt, engagement levels across Europe averaged 57 per cent in 2012, compared to a global average of 60 per cent. But even that was a long way behind the 74 per cent score for Latin America, home to the burgeoning economic powers of Brazil and Mexico.

The smart companies are those that are able to encourage and incentivise employees using a variety of methods, not just by adding zeros to pay cheques

However, back at home, there are signs that the tide is beginning to turn. The government has put its weight behind an effort to address the problem and its causes by endorsing Engage for Success, a movement that offers resources to organisations and employees.

And, according to Engage for Success programme manager Wendy Leedham, a groundswell of support is starting to push the issue of engagement out of the business world’s backwaters and towards its rightful place in company boardrooms.

“There’s money sitting on the table here, in terms of growth and organisational performance,” says Ms Leedham. “That translates into GDP for our country. And there are other benefits – it’s win-win – because employees live longer, have fewer illnesses, happier lives, and they feel fulfilled in terms of having meaning and purpose.”

Ms Leedham adds that the main document underpinning the Engage for Success movement – a paper entitled The Evidence, published in partnership with the University of Bath as a follow-up to the government’s MacLeod Review on employee engagement – is a serious piece of academic research. “You could slap that on to any board table and say: ‘Read this, and tell me this thing doesn’t matter and shouldn’t be a key priority’.”

Engage for Success doesn’t openly endorse specific companies or the approaches they take to boost engagement. Instead, the organisation has identified four “pillars of engagement” that should form the basis of any company’s approach – a strategic narrative, engaging managers, employee voice and integrity.

Ms Leedham says: “What’s important is you find a way that is authentic for your organisation, your culture and the point in the journey you’re on. This is not about how you do ‘engagement’. This is about doing all the things you do, but doing them in an engaging way that enables people to commit to them.”

In the current landscape, the smart companies are those that are able to encourage and incentivise employees using a variety of methods, not just by adding zeros to pay cheques. In fact, a survey by recruitment firm Brook Street showed last year that 55 per cent of employees rated “quality of life at work” as their most important concern, ahead of remuneration and other factors. As a result, employee benefits are another important part of the picture.

One of the peculiarities of dealing with a lack of engagement, and perhaps a reason the issue has only recently started to be taken more seriously, is its tendency to go largely unnoticed until it results in a major catastrophe. Ms Leedham points to crises at the BBC and the Mid Staffordshire NHS Trust as symptoms of endemic failure to engage employees. “It’s true that in hospitals where there is more engagement, there are lower mortality rates,” she adds. “So in some cases, this is genuinely a life-and-death issue.”

In massive organisations, such as the BBC and the NHS, keeping the issue of engagement front and centre can be a challenge. But it was interesting to see what happened last month when the new Microsoft chief executive Satya Nadella replaced the outgoing Steve Ballmer. Mr Nadella had just taken the top job, at an organisation with a market capitalisation of $312 billion, yet he took the time to write a 1,000-word all-company e-mail to introduce himself, explain his motivation and set out what was next for the company.

“I am here,” Mr Nadella wrote, “for the same reason I think most people join Microsoft – to change the world through technology that empowers people to do amazing things. I know it can sound hyperbolic – and yet it’s true. We have done it, we’re doing it today and we are the team that will do it again.”

The word “engagement” wasn’t mentioned, but the letter seemed to have authenticity, and all the hallmarks of a message that was designed to meet the hopes and expectations of modern employees.

Ms Leedham notes that organisations “steeped in hierarchy and formality”, as many of the UK’s are, can be a turn-off for the younger generation. “They want more of a community, more openness, more creativity, more empowerment,” she says. “When we talk about the UK competing globally, this is what we’re up against in some economies. We have to change.”