I plead guilty to enjoying a cold beer or two, and I’ve watched with amazement as the decade-long bull market in the craft beer industry shows no signs of abating.
If your brand’s position in the market leaves something to be desired, it’s natural to look at any number of areas for improvement – everything from the effectiveness of your management team to the impact of your marketing dollars and where you’re spending them.
One factor that can have a tremendous impact on your brand’s value is your workforce – specifically, the degree to which your employees are engaged in building your brand’s competitive edge.
Employee engagement – the practice of employees fully and enthusiastically committing to their work in a way that advances their employer’s strategic mission – is an idea that is continuing to gain in momentum and today has firmly gained traction with numerous companies worldwide.
Companies that focus on cultivating employee engagement have seen firsthand the positive impact on employee retention, customer satisfaction and loyalty, and overall performance. Simply stated, they have learned that engaged employees have a tremendous influence in positively affecting a brand’s value.
In considering the financial impact of employee engagement when it’s not present in workplaces (or more specifically the impact of disengaged workforces), did you know that according to a Gallup study the current cost of lost productivity alone is estimated to be more than $300 billion annually?
What’s more, the impact is just as staggering when looking at the impact of high levels of employee disengagement on worker attrition. The U.S. Department of Labor reports that the financial impact of employee turnover can run as high as 200 percent of a worker’s annual salary and is estimated to cost the U.S. economy as much as $5 trillion each year.
An engaged workforce: Where great brands start
Studies by Gallup and many other organizations confirm time and again that engaged employees are more productive, create better customer experiences, work more safely, and are more likely to remain with their employers. As a result, employers win because they get a more stable and motivated workforce and can consequently spend more time strengthening their brand as opposed to continually having to “take two steps backward” because of high attrition rates and other ill effects of a poorly engaged or disengaged workforce.In addition to realizing stronger brands, companies with high engagement levels achieve superior financial results. According to a report by Gallup, these companies have 3.9 times the earnings per share growth rate compared to those in the same industry with lower engagement levels. What’s more, a study by Towers Watson shows that over a period of 36 months the companies with a significantly engaged workforce delivered a much better financial performance – a 5.75 percent difference in operating margins as well as a 3.44 percent difference in net profit margins.
Finding the Ignition Point
An excellent first step in developing an engaged workforce is to work proactively with your employees to find out what motivates them and then to link these motivational elements to specific behaviors that have been shown to be essential to helping your company achieve its strategic goals. A study by Right Management shows these factors include learning and development opportunities, culture, senior leadership, and recognition and rewards.
Studies by Gallup, the Corporate Leadership Council and Towers Perrin, as well as other organizations, all underscore the fact that recognition strongly correlates to higher levels of employee engagement. What’s more, a global study by Towers Watson shows that the level of employee engagement in a company rises when efforts to improve engagement are accompanied by meaningful tangible and intangible rewards. Properly designed and executed, recognition and reward programs can be real “game changers.”
Most employees want meaningful work. When companies structure and correlate job functions to key strategies, engagement initiatives stand an excellent chance of gaining traction. Too many companies find out about employees’ motivating factors at exit interviews.You can’t build an employee engagement strategy around workers who are planning to walk out the door.
The beauty of employee engagement is you can use practical, relatively inexpensive measures to take an employee from 75 percent engagement to 95 engaged or more in a surprisingly short period of time. When looking for ways to begin making improvements, a company doesn’t need to look far. More often than not, its “stars” – its most highly motivated employees who on their own find ways to do their jobs faster, smarter and more cost effectively – have already figured out how to make improvements to a particular work process or function, or are at least well ahead of the rest of the team. Management just needs to share, publicize or amplify these practices or successes so they can easily be understood by the rest of the team.
This is the “ignition point” from which an organization’s engagement and brand building efforts can start to accelerate and register measurable improvement. Companies can see dramaticimprovement sharing best practices is supported and reinforced by a rewards and recognition program that affirms the desired behaviors that are aligned with its key strategies.
The best companies recognize that in today’s multi-generational workforce (boomers, Gen X, Gen Y and Millennials), what motivates one employee doesn’t necessarily motivate another employee. By fine-tuning their recognition and reward programs to address generational differences, these companies increase the likelihood of achieving even higher levels of engagement and as a result correspondingly greater brand value.
The best companies also remain committed to their engagement efforts in the face of difficult economic times. They recognize that employee engagement and employee recognition and reward programs are forces that offer too much potential for improvement and growth to simply walk away and abandon them during difficult economic periods. Tough times don’t last forever and that by staying committed to these efforts, these companies will emerge in stronger competitive positions when economic conditions do improve.
If a company’s brand value and its financial strength are inextricably bound to the engagement level of its workers, how can your company afford NOT to pursue having an engaged workforce?
Louise Anderson is the CEO/President of Anderson Performance Improvement, an award-winning provider of behavior-based rewards and recognition systems.