The High Cost of Low Engagement

Many organizations are not aware of just how much low engagement is costing them. Several experts have noted that it costs approximately three times the salary of an executive employee (i.e. knowledge talent) to replace him or her. When replacing an hourly-waged employee, it costs approximately 1.5 times their salary.

The impact of low engagement cannot be underestimated; it can lead to reduced employee commitment to company objectives and goals, decreased productivity, decreased quality of work, decreased innovation, decreased customer and partner satisfaction, decreased ability to attract new employees, lowered boomerang rate for returning employees and increased talent turnover. And if that doesn't sound bad enough, all of these factors lead to decreased profitability.

On the other hand, research supports a connection between increased engagement and improved business outcomes. Emera, a large energy company with more than 2,000 employees, provides compelling proof of this connection. When Emera took action to improve engagement scores, and when those scores almost doubled in two years and their stock value reached an all-time high, Emera saw the link between increasing engagement and realizing outstanding business outcomes.

"We see a very clear link between our increased stock value and the actions we took to improve engagement, says Janice Sutton, HR Communications Administrator, Emera. "When employees understand their company's goals and how what they do impacts those goals, they are aligned and more committed to the company's - and their own - success.


The Business Success of High Engagement: The Emera Story

"A little over 5 years ago, the company began a concerted effort to change the culture to one that involves employees and aligns them to shared objectives, Ms. Sutton continues. "Our employees, management and union needed to support the same business goals.

At that time, Emera and its largest subsidiary, Nova Scotia Power, were facing a number of major issues, such as managing a significant number of grievances, being negatively portrayed in the public, worsening safety statistics, and difficulty around integrating employees and partners.

Emera brought together a group of employees from all areas of the business, all regions of the province, including management and non-management, union and non-union, to identify what we wanted the future to look like, what the potential roadblocks to achieving this might be, and what actions we needed to take to reach that future state.

Emera focused on two key components for successful cultural change: taking action and involving employees. "Employee teams were formed to hash out the details of the work that would set us on the path to an aligned future, and a group of employee representatives - including management and union executives as well as employees from all levels - was formed to oversee and report to all employees on the action teams' progress. This cross-representational group formed the Employee Council, explains Ms. Sutton.

Emera knew that for effective action planning they had to start with a smart feedback process that would yield the most relevant data upon which they could build their action plans. ClearPicture's feedback platform and consulting services helped Emera get the right data into the right hands at the right time.

Ms. Sutton explains, "To get to action, we knew we needed the right mechanism for collecting the data from which we could then take action. She adds, "We chose ClearPicture to help us measure our progress through our annual employee survey based on their survey management and analysis expertise, as well as their focus on engagement in particular.

ClearPicture's analysis of Emera's employee survey data, their examination of year-over-year trends, and their consideration of Emera's current business environment, furnished Emera with the kind of feedback with which they could set their action planning direction.

"Perhaps most importantly, ClearPicture identifies the key drivers for our organization each year which are those areas that, if we put our attention and energies to, will have the most significant impact on employee commitment, says Ms. Sutton. The information unlocked by the key driver analysis helped drive the action plans and guide the decision making process for prioritizing areas of concern.

"Each year, ClearPicture's analysis has substantiated Emera's perceptions of the areas needing focus. The analysis identifies what Emera is doing well and what we need to focus on; what our participation levels mean and which demographics are least - and most - engaged, explains Ms. Sutton.

With ClearPicture's help, Emera has made great progress toward its goal of a more aligned, involved and committed workforce. Emera has seen a dramatic increase in employee engagement, increased customer satisfaction, decreased union grievances and an unprecedented 5-year union contract agreement, and an all-time high stock price while costs were maintained. Additionally, Emera's actions realized other benefits, such as an ability to fill many of their positions in a timely manner in the current labor shortage environment, improved safety statistics, and five of Nova Scotia Power's plants placing in the top ten of plants throughout Canada in 2006.

Emera's story demonstrates something ClearPicture has learned from its years of experience helping clients get to know their people: engagement is not just a "nice-to-have, it's one of the leading contributors to positive business outcomes.

The Right Feedback Program: An Engagement Solution

Before you can take action to increase engagement, you need to get the right feedback from your employees - to find out how they think and feel about your company and their jobs. Hundreds of companies offer inexpensive, online web-based surveys that ask a series of generic questions. But not all surveys yield the right feedback. If the survey comes with stock questions, some of those questions may speak to your particular issues, but when the questions miss, which they inevitably do, you miss out on revealing your specific hot spots. Better to do the job right from the ground up so that you don't waste time and money.

A well-crafted questionnaire based on your company's unique culture will do a much better job of revealing your specific problem areas, thus giving you an opportunity to create relevant action plans to resolve those issues. When issues go unresolved, morale decreases because employees feel unheard and undervalued. Asking your employees how they think and feel is an action, a first important step towards further action, that speaks volumes about their value to the company.

A robust survey program packaged with IT and consulting support is a much better bet than purchasing technology alone. This type of solution adds untold value, such as ensuring confidentiality of your users, which will helps increase participation rates, thus providing a much more accurate view of your employees. You also want to find a company that can manage complexities such as global reach and multiple-language capabilities for satellite offices. Accessibility for impaired users is also an important consideration. These are the areas in which most generic surveys fall short.

So, how do you find the right feedback program to help improve engagement? A few key factors can help you in your search. First, define engagement so that you know what you are trying to achieve. In our years of experience working with our clients, we have come across many definitions. From those, we have distilled engagement down to this definition: When my feelings are heard, when my thoughts are valued, when my actions are acknowledged, I am happy to belong.

Second, ask your employees what they think and how they feel. They will tell you what it takes to engage them, and what is not currently working. Employees who feel heard and involved contribute immensely to the growth and development of the business.

Third, take action on employee feedback.

HR's Vital Role

The role of HR in the feedback process has become very important. Essentially, the information gathered from the program and the actions taken have a direct and profound impact on business outcomes. HR managers need to understand that they are no longer only managing cost centers, but they are instrumental in finding solutions that will help the organization reach its optimal operation and profitability potential.

HR has the responsibility to run the feedback programs but disburse the responsibility for executing action across the enterprise, tying action and results to HR's function. An enterprise approach has the greatest chance of aligning employees, diminishing silos, and reducing costly program repetitions and redundancies.

ClearPicture's experience helping organizations get to know their people has helped them develop the ability to gauge the workplace's perspectives on topics of importance to them, and to the business. They know that feedback programs demonstrate to employees that their input is desired and valuable, and that taking action on their feedback strengthens trust, which helps increase engagement and loyalty, which helps improve business outcomes.

For more information, please go to www.clearpicture.com or call 888.422.1177 extension 1.