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Ryan Healy graduated Penn State University in the Spring of 2006. He recently left his consulting position to start 
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Forget the generation gap for a minute; let’s talk about the engagement gap. Towers Perrin recently conducted a survey of over 90,000 employees in 18 countries. Their findings are less than shocking.
21 percent of employees are engaged in their work, and only 38 percent are partly to fully engaged. Towers Perrin calls this the “engagement gap.” According to the article from Market Watch, the engagement gap is, “the gap between the discretionary effort companies need and people actually want to invest and companies’ effectiveness in channeling this effort to enhance performance.”
That’s human resource jargon for “If employees are not engaged, they will not perform!”
While this seems like common sense, the real value of this survey is its ability to quantitatively relate this information to a company’s bottom line. The article goes on to say,
Firms with the highest percentage of engaged employees collectively increased operating income 19 percent and earnings per share 28 percent year to year. Those companies with the lowest percentage of engaged employees showed year-to-year declines of 33 percent in operating income and 11 percent in earnings per share.
In a related study over a longer time horizon (three years), the firms with the highest levels of employee engagement achieved a 3.7 percent increase in operating margins, while those with the lowest levels of engagement suffered a drop of 2 percent.
This link to a company’s bottom line is a huge breakthrough in the area of HR and talent management. For years, “people issues” have been pushed to the background due to a lack of quantifiable financial effects. I can’t tell you how excited I am to see this slowly changing.
People like my mother have been pushing this emphasis on people for years. Finally, they have charts and stats to show the CEO!
I am not an HR expert by any means, but I truly believe the best thing a company can do to engage their employees, especially young employees, is to give them greater visibility across the organization. Employees at the bottom of the ladder need to know where they fit in, and how their work helps the company overall. All it takes is a quick meeting and a couple PowerPoint slides. Try it. You’ll be amazed at the response.
It is my hope that the single greatest change that will take place in the workplace as Gen-Y climbs and eventually commands the corporate ladder, is a new found focus on employee engagement, above ALL else. Because, after all, what could be more important to a company’s bottom line then its employees?
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Deloitte did a podcast a few weeks ago about this very thing. Their ideas were similar to yours: show Gen Y where they can be and how to get there. Make it worth their while to stick around, and guess what?! They will!
I think this is something standard across all levels of employment. It is ironic though, that I just had a third quarter review, and mentioned this very thing to my boss. In no uncertain terms, I said I’d like to at least see some sort of roadmap of potential places I could end up being. Show me what some people in the past have done, show me where they are now, all I’m asking for are some potential possibilities.
I just don’t want to be in the dark, sit around for a few years wondering what I’m going to do next, and then eventually leave. Show me a hierarchy, and let me know what doors I’m opening up by being here. I know for a fact that I don’t know all the doors that I’m opening, which leaves me forced to focus on what I do know. Unfortunately for my organization, what I know lies outside of it, so I can’t fault myself for looking. We just took a survey and one of the questions was “_______ does everything it can to retain the best employees” to which I had to answer “very unsatisfactory.” Unfortunately the biggest retention technique is just hoping for the best, and then trying to put in an offer as a reactionary measure. That’s not going to cut it for me, not should it for anyone.
Wow Ryan, this article couldn’t have been more dead-on to a project I’m working on right now. I actually read that Towers Perrin article yesterday and the numbers speak volumes. As a HR professional at a well known financial firm, our team is trying to implement a firm wide engagement survey for our employees after a 20 year hiatus. (Unbelievable, I know) It has nevertheless been an uphill battle for senior management buy-in. I can’t stress enough how important is it to measure the pulse of your population; managers would be amazed at their employee’s responses. Being engaged is not just about saying “I like my job” or “I like my manager” it’s about being committed to the organization as a whole. Keeping your employees engaged is an issue that spans all generations and as you stated, I just hope our generation can be the one to lead the change.
I’m amazed when I hear things like a company taking a 20 year hiatus between engagement surveys. It’s a fact that engaged employees create great companies. If you have the best workers, you win.
I think leaders have ignored the impact that engaged and happy employees have on their company’s bottom line because it couldnt be measured. Or maybe because it’s too “touchy feely” and they would rather worry about financial metrics or marketing. But if you start with the people, everything else will fall in line.
Thanks for the comments. Have a great weekend.
Go State!
-Ryan
Just wanted to let you know that engagement surveys that correlate to bottom line business results are not a recent breakthrough for HR/Talent Mgmt. Hewitt Associates was an early advancer in this field and started their engagement survey work (including compiling normative and benchmark data) in 1994.
Gina should make sure what she is proposing gets implemented in her firm is a validated engagement survey - not just an employee satisfaction survey. A number of firms have validated their surveys (proven the correlation between their definition of engagement and financial results) - they may have slightly different survey items to measure engagement, but they usually get at two of the following three areas: how long the employee plans to stay with the company, discretionary effort on the job and what the employee says about the company to others (including willingness to refer others to work there.)
I’m glad to see the enthusiasm about the concept and hope that GenY ensures engagement becomes a staple metric for all organizations.
Hi Ryan,
I believe the role of the manager is critical when it comes to engagement.
The manager has to support and encourage employees to be positive about work, expressing confidence in employee’s ability, inspiring others, listen to opinions and act upon feedback.
The manager has to help and remove obstacles, break down tasks, create work plans, translate long-term goals into small step-by-step plans.
The manager has to ensure people are accountable, measure performance and success.
By doing this, engagement grows.
Andrew