Table of Content
1. Executive Summary
Employee engagement is the emotional and psychological commitment employees have towards the organisation and its goals. Organisations with an engaged workforce produce better business outcomes than those with lower levels of engagement. Kelly actively promotes the cause for employee engagement by going to great lengths to retain talent, and ensuring that their staff feels positive about working for the company – this ensures optimal productivity.
Achieving an engaged workforce requires senior leaders to communicate constructively with employees and allow them to work within their areas of strength; provide regular feedback on their progress; and to consider them holistically, giving due respect to their personal lives, which affect their ability to work optimally. Generational differences in the workforce require that multi-faceted engagement strategies be implemented, so as to cater for employees who are in different stages of their personal and professional lives. Globally, engagement levels are low: only 13 per cent of employees worldwide are actively engaged. South Africa’s figure is even lower than the global average, sitting at nine per cent. Improving engagement levels requires senior leaders to commission regular surveys to measure engagement, and act upon the findings so that employees feel the effects of their input. Such investment in engagement ultimately yields benefits for employees and organisations alike.
2. What is Employee Engagement?
Employee engagement is an important concept for businesses: clear correlations have been drawn between high levels of engagement and business success. Companies with high levels of employee engagement outperform those with lower levels of engagement, all other factors being equal. There are numerous definitions and conceptualisations of what employee engagement is, and what it is not. Employee engagement is not simply ‘employee happiness’ or ‘employee satisfaction’. Employees may be happy at work, but this does not necessarily mean that they are working optimally for the benefit of the organisation. In a similar way, a satisfied employee may consistently show up for each working day and seem content, but might not show any initiative, or go the extra mile to do his or her job with excellence. It is undisputed that a high level of engagement is desirable, and that involvement, passion, enthusiasm, commitment, focused effort and energy are necessary to achieving an engaged workforce. An employee who is engaged has an emotional commitment to the goals of the organisation, and, out of his or her own volition, takes positive action to further the success, reputation and interests of the company. Emotional commitment suggests that employees care about their work and the success of the company: they work not only to earn a salary at the end of the month, but also to achieve success for the organisation.
Engagement includes the psychological state and behavioural outcomes that lead to better performance. Employees who are engaged speak positively about their organisation to co-workers, potential employees and customers; they have a sense of belonging and a desire to be part of the organisation; they are motivated and exert effort toward success in their jobs and for the company. The antecedents of the requisite attitudes and behaviours centre around working conditions, and the ultimate consequence of engagement is attainment of organisational goals.
Gallup, a leader in engagement studies, describes an engaged employee as ‘emotionally invested and focused on creating value for their organisation every day’. The Gallup model of employee engagement posits a hierarchy of reflective questions, which ultimately measure the level of engagement within an organisation:
Figure 1: Gallup’s model of employee engagement
A framework for understanding which factors contribute to engagement (figure 2) shows that engagement is a positive disposition of employees, characterised by enthusiasm. The framework shows how workplace conditions, including the nature of the work (e.g. challenge and variety) and the nature of leadership, affect engagement. The nature of leadership has a direct effect on trust, which is a core requirement of an engaged workforce.
Figure 2: Framework for understanding the elements of employee engagement
A South African model of engagement, developed by Ruwayne Kock and Kent McNamara, is based on a definition of employee engagement as ‘a psychological state within which an employee connects and identifies with the personal, job and organisational dimensions of their work, resulting in retention and improved performance’. Their model integrates important factors, such as the relationship between team members and supervisors, which contribute to engagement (see figure 3).
Figure 3: A South African model of employee engagement
Employee engagement is driven by three key factors: a) relationship with the direct manager; b) belief in senior leadership; and c) pride in the company. Employees with an infelicitous relationship with their managers are less likely to be fully engaged. Similarly, employees who are not confident in the ability of senior management tend to be more disengaged. Finally, when employees feel pride in the contribution of their organisation to society, they are more engaged. Engaged employees are enthusiastic, inspired, empowered and confident.
Engagement levels may differ from one sector of an organisational workforce to another. For example, the level of engagement of professionals who hold meetings in boardrooms may well differ from the employees who clean the offices and serve tea. Harnessing the full benefit of high levels of employee engagement across the board requires a holistic and specialised strategy, led by senior leaders within an organisation, to accommodate all members of staff.
3. Value of employee engagement in organisations
Engaged employees lead to better business outcomes: their levels of service, productivity and work quality are higher, which leads to increased client satisfaction. This, in turn, leads to increased sales, resulting in higher profits, which ultimately produces higher levels of growth and stability for all concerned in the business.
Based on the results of surveys conducted with employees the world over, it is clear that engagement contributes to business success through various mechanisms. Put simply, companies with engaged employees outperform counterparts with lower engagement levels by a significant margin. Statistics show that a five per cent increase in engagement yields three per cent increase in revenue in the following business year. High engagement also results in lower staff turnover, which can be very costly to companies.
4. Challenges of effective employee engagement in a multi-generational workforce
Much has been written about generational differences in the workforce, and this too, has bearing on employee engagement. The following generational cohorts are commonly recognised, with slight variation as to the cut-off year for each group. Generally, it is agreed that ‘Baby Boomers’ are the eldest segment of the current workforce, born before 1964. ‘Generation X’ denotes those born between 1965 and 1980. ‘Millennials’, also called ‘Generation Y’, include those born between 1981 and 2000. ‘Generation Z’ is a term gaining traction to refer to people born since 2000. The latter group, due to their age, are not economically active, so their needs do not yet have to be accommodated in the workplace.
Engaging employees of different generations requires the creation and management of a working environment which accommodates differences in viewpoint and work style. Members of the various generational cohorts differ in what motivates them, because they are in diverse stages of their lives. Baby boomers, who are at the end of their careers, are more likely to be engaged when incentivised with recognition and accomplishment – they want to know that their work is appreciated and that they are contributing positively to the success of the company. To Generation X, the key to ensuring their engagement is stability. They usually have well-established careers, but need to strike a balance between family and work life. Flexibility is important to members of Generation X, as well as other factors that help them to achieve a good work-life balance. Millennials are young and reasonably new to the working world. For them, career development and training opportunities help to keep them engaged as they are looking for ways to advance their careers.
The literature shows that levels of engagement typically differ by generation: younger employees are less engaged than older employees. Organisations usually have a single policy to address engagement, despite the well-documented generational differences in employee engagement. Strategies for keeping Millennials engaged should therefore be different to the approaches which work for Baby Boomers. Millennials thrive on frequent constructive feedback, delivered in a way that makes it clear how their performance can be improved, where necessary. Baby Boomers are accustomed to a more traditional model, in which feedback is provided less frequently and is based on annual reviews. Understanding generational differences is crucial to managing conflict and facilitating a harmonious work environment.
It is therefore incumbent upon managers and human resource professionals responsible for engagement to be aware of the generational differences exist within their workforce, and to tailor engagement policies to meet the very specific needs of their organisation. A one-size-fits-all approach cannot accommodate the disparate needs of a multi-generational workforce. While these generalisations about the different generations paint the overall picture in terms of what keeps employees engaged, it is nonetheless essential that employees are treated as individuals whose unique needs and desires are important to their employers. It is not possible to make wholesale assumptions about people based purely on their age or life stage.
5. The state of employee engagement in South Africa and globally
Despite widespread recognition of the importance of employee engagement to business, reports find surprisingly low levels of engagement globally. Gallup reports that only 13 per cent of employees working for organisations worldwide are engaged, and that this number is has remained stagnant over the last 15 years. It is clear, however, that companies that invested in a scientifically and experientially validated approach to engagement reaped the benefit of this investment: their engagement scores were significantly higher than that in companies which conducted unfocused, invalidated annual surveys. It is essential that the focus of companies is to improve, not only measure, engagement. If they are committed to acting on the results of the surveys, employee engagement will increase as a result of these actions.
In the United Kingdom (UK), only 33 per cent of employees are actively engaged. This equates to 20 million workers who are not delivering to their full potential, and 64 per cent of these believe that they could offer their employers more if given the chance. The estimated cost of the low level of engagement is $64.8 billion per year. In the United States, the picture is similar: just 30 per cent of workers are actively engaged, and it is estimated that staff turnover – a result of employee disgruntlement and disengagement – costs the US $11 billion per year.
In South Africa, the Gallup survey produced alarming findings: only nine per cent of the workforce is actively engaged. Of the 91 per cent who were disengaged, 45 per cent were actively disengaged, meaning that they were very negative about their job and work environment, and likely to spread that negativity to co-workers. Only the most highly educated South Africans, and those in professional job categories, reported balanced levels of engagement (i.e. about 50 per cent engaged and the other 50 per cent disengaged). Gallup’s survey revealed that fewer than 20 per cent of South Africans feel that their opinions count at work, or that their supervisors encourage their development.
Leadership failings were highlighted in South Africa, with 67 per cent of the staff surveyed indicating that they want their managers to lead and communicate better. A majority of South Africans in the workforce (58 per cent) do not believe that they have adequate opportunity to contribute to decisions that affect them. Of the South Africans surveyed, 20 per cent were disinterested in their work, and while 50 per cent reported that they were satisfied at work, employee satisfaction does not necessarily indicate that they are actively contributing to the success of the company they work for. Clearly, this leaves much room for development and enhancement of engagement strategies to improve levels of employee engagement.
6. Consequences for lack of engagement in organisations
The economic impact of low employee engagement levels is real and staggering. The cost of the low level of engagement in the UK is estimated to be $64.8 billion per year. In the United States, high staff turnover rates cost companies $11 billion per year. Talent retention can thus provide businesses with an important competitive advantage: engaged employees are less likely to seek alternative employment or be lured by head-hunters. Considering the high costs associated with high staff turnover, engagement and retention initiatives can have a significant impact upon an organisation’s bottom line, especially given the unfavourable economic situation.
It is clear that employee engagement is closely related to meaningful business outcomes. Employee engagement should be measured in order to gain a deeper understanding of the drivers of and barriers to engagement. But it is equally important that top management is willing to act based on the results they obtain, lest survey fatigue and cynicism lead to lower levels of engagement because employees don’t see any improvements as a result of their input.
7. Fostering employee engagement in organisations
It is desirable and highly beneficial for organisations to ensure that employees, from the most junior, entry-level staff members to the executives, are engaged and actively contributing to the attainment of organisational goals. Achieving high levels of engagement requires senior leaders to interact with their staff in meaningful and individualised ways so as to ensure that each employee is able to do his or her best work for the good of the company.
It is recommended that companies conduct regular engagement studies to monitor the engagement process, without making the surveys and other means of data collection too cumbersome for employees. The monitoring of the engagement process must be transparent, so that participants can see that their input is making a positive impact on the organisation. Quest Staffing Solutions, a recruitment and staffing solutions company, applies this monitoring model by regularly conducting surveys with its pool of Assignees to stay abreast of their changing motivations. Insights from these surveys have enabled Quest to retain a large proportion of their Assignees and to consistently score high CSI scores with clients, due to a highly productive workforce.
The four critical stakeholders with regards to engagement are HR, managers, individual employees and senior leaders, but it is imperative that the approach be leader-led: HR cannot be the drivers of engagement, senior leaders are the only ones who can make engagement happen. Engagement strategies need to be diverse in order to cater for the needs of all members of the workforce.
Research has shown that engagement decreases with employee tenure, so employees who have been at the organisation longest, and have organisational memory and deepest knowledge of the company tend towards disengagement. Engagement also decreases further down the organisational hierarchy: senior managers and executives are not likely to be aware of the level of discontent amongst more junior employees. Sales and service employees, who typically interact with customers, tend to be least engaged. These factors must be considered when implementing a strategy to improve engagement within an organisation.
Dialogue is critical, and supervisors and managers must be suitably trained to conduct constructive discussions with team members. They need to be equipped to handle sensitive topics, such as requests for pay increases. Appropriate training would also help managers to understand the importance of taking action quickly and sharing with employees how their input contributed to the improvements. It is essential that managers communicate via many means, including face-to-face meetings, email, phone and through regular meetings, as good communication correlates strongly with higher levels of engagement. Team leaders should also take a professional interest in their employees’ lives outside of work, as these factors affect their ability to do their work. Employees need clear goals and regular conversations about their responsibilities and progress, and to know that they are being held accountable for their performance. Annual reviews no longer suffice to keep employees happy and engaged in the workplace.
Recognising the importance of engagement to a company’s bottom line, many organisations have spent significant amounts on trying to increase engagement levels. This effort, unfortunately, is often misplaced, as companies focus purely experiences at work, rather than employees as holistic beings. There is evidence to suggest that what happens outside of the work day is equally important with respect to engagement as what happens during office hours, because when employees arrive at work, they arrive with the practical, emotional and other ‘baggage’ from their personal lives. Work and home are inextricably linked, and wise employers acknowledge these connections and work with their employees to manage, understand and accommodate individual needs. Viewing employees holistically has further benefits, as a strengths-based approach results in more engaged employees. When managers focus on strengths rather than weaknesses, and help employees to develop their areas of strength, they are twice as likely to engage the members of their team. Placing an employee in a position that allows them to use and develop their natural talents, and adding skills and knowledge to develop themselves in these areas leads to highly engaged employees.
Leaders should have conversations within their organisations in order to ascertain which engagement drivers they should push in order to increase engagement, and which of them they need to protect in order to prevent decreases. These factors need to be viewed holistically, taking into account the needs of different people making up the workforce. The engagement strategy should thus identify and address the organisation’s most pressing employee challenges, and keep the focus of the task aligned to the company’s business goals. This will allow for the creation of a customised approach to increasing engagement levels, based on the company’s most important engagement drivers.
Furthermore, leaders must glean the knowledge held by client-facing employees. Call centre representatives, sales staff and field technicians have intimate and first-hand knowledge of what aspects of a business annoy or delight their customers. Companies should to tap into that knowledge base by asking lower level employees for their insight and opinions into matters affecting customers, and take decisive action based on the information they get. As a final step, it is crucial that employees are made aware that their input contributes significantly to the overall success of the organisation.
Kelly recognises the importance of having engaged employees, and to this end, ensures that they provide induction, on-the-job training, and use a strengths-based approach to place employees where their skills can best be used. They also create a positive company culture so that people feel good about working there, which results in optimal productivity from their staff. Together, these factors lead to higher retention rates, and a happy, engaged workforce.
Building an engaged workforce is a long-term and on-going process, but it is a worthwhile investment as increased engagement leads to increases in profit, productivity and efficiency. Garnering the buy-in from senior leadership is essential, as any engagement strategy involves them articulating a clear vision for the organisation to all employees, facilitating open channels of communication and allowing employees to provide input with respect of the vision. Additionally, direct managers need to foster healthy professional relationships with their employees, give them a sense of empowerment and value their contributions. Together, these factors provide significant value for organisations.
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10. About Kelly
Kelly, a division of Kelly Group, an Adcorp Holdings Limited group of companies is South Africa’s first recruitment agency of choice for rapid permanent and contingency staffing solutions. Kelly has 46 years’ experience in the successful job-matching and placement of top candidates.
In addition to the permanent placement of professionals across multiple industries, Kelly’s specialised contingency staffing solutions include the replacement of permanent, temporary and contract workers - in line with clients staffing and capacity requirements.
With detailed understanding of each client’s business, Kelly’s expert consultants exhibit in-depth knowledge pertaining to the industry sector in which they recruit and consult. These industries include: Administrative & Office Support, Contact Centre, Engineering & Technical, Financial, HR & Procurement and ICT.
For more information visit www.kelly.co.za.
This paper is a product of the collaborative research between
Kelly and Quest Staffing Solutions (Pty) Ltd.