Employee engagement is a core responsibility and KPI for any HR team and describes the different ways in which an employer can help improve staff motivation, talent retention and overall efficiency and productivity.
Attracting talent is costly so it’s vital that businesses have strategies in place to keep that talent. Head hunters and competitors will be looking to poach good members of your team so here’s what you can do to make a difference.
Why is employee engagement important?
Employee engagement isn’t a box to be ticked once a year. It should be part of your business’s continual improvement strategy.
Low employee engagement and high staff turnover can cost your business a lot of money, with average recruitment costs of £3,000 per employee. When someone leaves a company you have the cost of hiring a new person, training them, the loss of productivity while they get up to speed, and the potential knock-on effect to other employees who may have to pick up the slack during this time or who might also question whether they want to stay with the business.
Over time, employees become more valuable to a company. They get to know the systems and processes, they develop relationships with your clients or customers, and they maintain relationships with other members of the team creating a more positive environment.
Happy, motivated employees make better team players and provide your customers or clients with better service.
“You can’t have happy and satisfied customers if you don’t have happy and satisfied employees,”
Jason Butler, Head of Financial Education, Salary Finance.
If you want a productive, switched on, skilled up workforce, you need to look at employee engagement.
Links between financial wellbeing and employee engagement
‘Financial wellbeing’ or ‘financial wellness’ has risen up the executive agenda for good reason. We found that 40% of UK employees have money worries, which can lead to anxiety, stress and depression. Employees stressed about money are 8.8 times more likely to have sleepless nights leaving them tired and withdrawn at work, 7.6 times more likely not to finish their daily tasks, 5.7 times more likely to have difficult relationships with co-workers and be 2.2 times more likely to be looking for a new job.
All these factors can cost your business money. We estimate the cost of poor financial financial wellbeing to be 13-17% of salary costs.
By providing various financial wellbeing benefits, employers can help limit stress, decrease absenteeism and reduce staff turnover. Our Financial Fitness Score gives employees a gauge on their financial wellbeing and helps benchmark against this.
How do you increase employee engagement?
There are many ways to help boost employee engagement. Here are some you can add to your strategy.
Improve your company’s internal communication
Effective internal communication is critical when your company is going through a period of change but it’s just as vital when it’s business as usual. The flow of information from top down and in reverse, can sometimes feel like a game of Chinese Whispers. But poor communication is often cited in exit interviews as a key reason people leave a company.
For best employee engagement, your team need to be bought in to ideas and strategies and be taken along on the journey rather than having things delivered to them with no background or strategic overview.
The sharing of ideas between teams could happen during a weekly meeting or it could happen via email or phone, but it needs to happen.
Develop a health and wellbeing strategy
Your business should take a joined up approach to health and wellbeing that includes physical, mental and financial health. Health and wellbeing impacts productivity and staff engagement. Healthier employees take fewer sick days. Mental health costs UK businesses 25-34 lost productive days per year and greater staff turnover.
Your business might address employee physical health with exercise programmes, discounted gym memberships, ergonomic work areas and health care benefits but what about improving emotional, mental and financial health, personal values and individual development?
Mental health can be triggered by many different factors including stress about money and anxiety over workload. Your business needs to have different strategies in place to help employees struggling with poor mental health, whatever the cause. You could offer access to counselling advice, training in relaxation and resilience techniques, and employee benefits that help address money worries such as savings through salary, allowing employees to draw down their pay as they earn it or smart, simple borrowing. It’s important to provide wellbeing benefits that employees will value most.
Create an engaging workspace
Creating an engaging work environment isn’t all about slides and ball pools, whatever Google and Facebook say.
Simple changes like larger lunch tables or break out areas with sofas and comfy chairs can help encourage employees to socialise and boost internal communication, fostering employee friendships.
Natural daylight makes employees happier. If your office doesn’t have large windows or much natural light, consider fitting natural daylight bulbs. Lighting affects mood and atmosphere and can be a trigger for headaches and migraines, amplifying stress and anxiety, so it should be high on your list.
Modern, open-plan offices can feel sterile and counter-productive so introducing green plants can make them feel more welcoming.
If you have introverted members of your team, you might want to consider providing some secluded, calm areas for them to work. Introverts get their energy from having time to themselves and tend to prefer to work quietly. Open-plan workspaces favour extrovert personalities.
More and more offices are introducing hot desking or offer a variety of different ergonomic workspaces including standing and treadmill desks.
Listen to your employees’ feedback on their office space and implement any changes where possible.
Define your employees’ roles and responsibilities
Does every employee within your business have a clear understanding of what is expected of them, what good looks like and what is available to them to help them to do their job?
Roles and responsibilities documents help you decide if the right person is in the right role. They also help clear up any misunderstandings that may arise between members of a team, or between departments. They also highlight any training and development that may be needed for individuals.
Each employee should have defined tasks or duties that they’re expected to complete as part of their job. They should understand what they’re accountable for, what they’re being measured on and how frequently these metrics are reviewed.
Alongside a job description, a roles and responsibilities document is part of the foundation of an employee’s role and development path. As they progress through the company, these roles and responsibilities will change.
Objectives should be set around responsibilities and tasks, giving both the employee and the business clear visibility of how well they’re doing.
Encourage employee friendships at work
Employees who feel a strong connection with their team mates are more likely to have a positive impact on a business and feel more engaged.
A Gallup survey found that employees with a best friend in the office had a 35% greater commitment to quality in their work. 70% of employees said that having friends at work is the most important element of a happy job and 50% said that having a work best friend made them feel a stronger connection to a company.
While it’s important to avoid cliques forming, which could leave members of a team feeling excluded, there are ways to encourage work friendships. These include organising after-hours events, creating a club such as a netball or football team for staff to join, hosting team lunches, and starting a buddy system for new starters to ‘buddy up’ with a more established colleague or mentor.
Offer employee incentives, benefits and rewards
There are a host of employee benefits you can offer but you need to know which rewards your workforce will appreciate the most. Some businesses offer additional holiday, like birthday lie-ins or duvet days, healthcare, free fruit and gym membership, discounts at local businesses, cycle schemes and flexible working.
Our survey found that the top 10 desired finance-related employee benefits include pension advice and top-ups, access to a financial advisor, healthcare cash savings plan, illness protection, health insurance, support with child care, trustworthy emergency borrowing, employee share plans, ISAs and advance on salary earned.
Hire and train good managers
Do your managers know how to manage? It sounds like a silly question, but people sometimes get promoted to a management position as the next step in their career without them having any management training or aptitude in this area.
If an employee has a good relationship with their manager, they generally view the business in a positive light. The way that a manager communicates is extremely important. Employees like to feel that they’re kept in the loop and valued and that their opinions count. Suddenly springing change onto people can create stress and demotivation.
A Gallup survey found that employees whose managers had regular meetings with them, were three times more engaged than those who didn’t have regular communication. It also found that employees valued managers who took an interest in their lives outside of work.
Bad managers don’t express their appreciation, have unrealistic expectations, limit their team rather than empower them, avoid transparency, set a poor example, avoid challenges or difficult conversations and don’t follow things up.
People want to feel valued and supported. They want to know what their development path will be. Regular 121s or personal development plans are a chance for a manager and employee to catch up, set objectives, schedule training and review goals. If these get cancelled or moved around, an employee will feel devalued.
When hiring or promoting managers, it’s important to look for leadership qualities in order to keep your team engaged.
Create exciting learning and development opportunities
Giving employees clear development paths is key to their engagement with a business. Most employees will have some skills gaps and need some training in order to progress up the career ladder.
Investment in these opportunities should pay dividends when it comes to staff retention. And they don’t have to cost your business a lot of money. External training can mean employees are out of the business and can be expensive but there are many valuable internal training opportunities you can take advantage of.
Inviting members of the team to share their skills in a Lunch and Learn environment can provide relaxed, informal skill sharing helping all members of the team feel valuable.
Well-trained employees perform better, have increased morale and productivity, and can help build company reputation. Win win.
Provide life altering employee benefits
Our research has shown that 40% of employees are worried about money and that this has a negative impact on their engagement levels. Employees with money worries are 6 times more likely to have a reduced quality of work and 5.7 times more likely to have troubled relationships with colleagues. They are also 2.2 times more likely to be looking for another job.
For these employees, an issue they are experiencing in their lives outside of work affects their ability to perform at work. For employers, this means that providing services that can help with this ‘out of work’ issue will have a corresponding positive impact on their performance and engagement at work.