Large organizations failing the engagement test

2013

Large organizations are facing an employee engagement crisis, a new report suggests, with only a quarter of their employees highly engaged with their jobs.

The Temkin Group, a US-based customer experience research and consulting firm, surveyed 200 companies with 1,000 or more employees to understand what they are doing in the area of employee engagement.

And as their report, State of Employee Engagement Activities, 2013, highlights, large companies appear to be having particular difficulty engaging their employees.

"While most firms measure employee engagement, less than half place a high priority on taking action based on employee feedback," the report says.

"A lack of a clear employee engagement strategy and the narrow reach of employee engagement activities contribute to less than one in four organizations earning strong or very strong scores on Temkin Group's employee engagement competency assessment."

This matters because companies with stronger employee engagement efforts deliver much better customer experience (CX) and have significantly higher financial results.

"When we compared companies with stronger employee experience scores to the other companies, we found that these leading firms have better financial and customer experience results," the report continues.

"They also have more coordinated employee engagement efforts, more involvement by the CX team in these efforts, and are five times more likely to place a high priority on taking action on employee feedback."

According to Temkin's figures, three-quarters of companies with stronger employee engagement efforts have above average customer experience compared with half of companies with weaker employee engagement.

This correlates with better financial performance, too. Eight out of 10 companies with stronger employee engagement efforts have above-average financial results, compared with only half (53 per cent) of companies with weaker efforts.

Both findings echo an oft-quoted 2005 Towers Perrin survey that found companies with strong levels of employee engagement had up to 19 per cent higher operating margin, net profit margin and revenue growth and up to 25 per cent greater earnings per share than companies with low engagement levels.

It also found that more than eight out of 10 highly engaged employees believed they can positively impact the quality of their company's products, compared with only one in three of the disengaged, while almost three-quarters of the highly engaged believed they can positively affect customer service, versus a quarter of the disengaged.

Sadly, however, the Temkin report also reminds us that there has been little change in levels of engagement over the past decade, with the same obstacles to engagement emerging time and again and many organizations seemingly unable - or unwilling - to reap the benefits that having a more engaged and productive workforce would bring.

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