The Case for Employee Engagement

Gallup estimates that low engagement costs the global economy US$7.8 trillion and accounts for 11% of GDP globally. Gallup’s analysis of 112, 312 business units in 96 countries found a strong link between engagement and performance outcomes, such as retention, productivity, safety and profitability.

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In its Global State of the Workplace: 2022 Report, Gallup makes a compelling case for employee engagement. In fact, the research firm goes so far as to describe employee wellbeing as the new “workplace imperative”. 

Whereas many organizations today measure ESG -  their commitment to improve environmental, social, and governance metrics - the report asks if these same organizations know whether their employees feel respected or cared about. It’s a compelling question and one that is very much on the minds of human capital professionals as they struggle with the effects of poor employee engagement.

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And while the global level of employee engagement was trending more highly until 2019, the pandemic brought about a significant increase in negative emotions felt by workers everywhere. In its report, Gallup reports how workers respond to questions about emotions like stress, worry, and anger to name a few. For example, 44% of workers reported feeling stress “a lot of the day” at work yesterday. Not only are the levels of negative emotions higher since the pandemic compared to previous years, but Gallup found these figures are 46% to 83% higher than for engaged employees

Globally, only 21% of workers are engaged at work. While marginally higher than in 2020, this level should cause employers who aren’t already focused on this issue to seriously reconsider their priorities. Poor engagement costs companies lost revenues, reduces worker productivity, increases involuntary staff turnover, worsens safety, and lowers customer satisfaction.. In fact, Gallup estimates that the aggregate cost to the US economy is $7.8 trillion dollars per year - the equivalent of 11% of GDP.

That is a shocking figure.

Put in simpler terms, the report states that business units with engaged workers have a 23% higher profitability than those with miserable ones. 

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Given the causal relationship of employee engagement on commercial outcomes, Gallup goes on to recommend that executive dashboards include wellbeing metrics in addition to the ESG, financial, commercial, and operational ones already in place. They also propose that wellbeing be part of organizations’ brand promise.

This recommendation isn’t entirely new, however. The business of measuring and tracking employee engagement is now well-established with tools like pulse surveys that aim to regularly gauge workforce sentiment. More sophisticated survey tools go so far as to enable their client organizations to ask specific questions and allow for anonymous comments so that staff can provide feedback about their work environment and manager without the fear of reprisal.

And while wellbeing metrics may not yet feature as prominently as commercial and operational ones in company dashboards, there is a growing body of evidence that leaders are paying attention. The sheer growth of employee engagement practices, tools, and solution vendors is proof of this.

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But what should organizations do once they uncover poor engagement amongst their ranks?

The Gallup report isn’t prescriptive. But from the larger body of research done by the firm, it does mention the strong correlation between the caliber of their people leaders and the engagement levels of their employees.

Likewise, it outlines the most common causes for burnout, which not surprisingly also have much to do with people leaders. For example, themes such as “unfair treatment at work”, an “unmanageable workload”, “unclear communication from managers”, and a ‘lack of manager support” are amongst the top reasons cited by employees who experience burnout.

In that regard, the report does emphasize the importance of people leaders and managers as being at the core of a thriving workplace. And it proposes that successful managers are skilled at being coaches, listeners, and collaborators, amongst their other trademark roles and responsibilities.

This is a compelling vision for the next generation of people leaders and managers, who will find themselves responsible for an increasingly hybrid workforce. One which will be more geographically diverse in many cases as well.

In this regard, we believe it important to consider the tools that people leaders and managers will require to be better in the areas that Gallup identifies - whether or not staff are working in the same office location, at a coworking space in another city, or their living room halfway across the world.

And while team messaging, collaboration, and video conferencing tools have become commonplace in most organizations, they often lack some of the components that leaders and managers need to foster a strong organizational culture and the feeling - as an employee - of being appreciated. 

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This is where recognition programs can be of help.

Recognition programs provide the ability for managers and, often regular employees, to easily express their appreciation for a job well done. Programs of this kind also often emphasize the organization’s core values and put them at the center of the recognition process.

The mere act of recognizing a direct report or a coworker can have a significant impact on their sense of feeling appreciated and respected within their work environment. Moreover, programs can target other critical and highly desired behaviors, such as collaboration, knowledge-sharing, and teamwork. 

And like many of the tools that are now commonly used by geographically distributed teams, recognition programs like Qarrot are available as web and mobile applications so that workers can send and receive kudos regardless of their location or proximity to their coworkers.

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Learn more about how Qarrot can help your organization improve employee engagement.

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