Make More Money Through Employee Engagement

[tweetmeme]Yet another study finds that effective employee engagement drives financial performance.  So let’s keep hammering home that two-way communication with employees is key to a company’s success.  It isn’t just something touch-feely that can be dispensed with when times are bad.  Shouldn’t employees just be happy they have a job?  No.  Engaging your employees during a recession and making them part of the solution can be a measurable competitive advantage.  Benefits consulting firm Watson Wyatt (now Towers Watson) makes the case in its study, “Capitalizing on Effective Communication:  How Courage, Innovation and Discipline Drive Business Results in Challenging Times”.  Here is what they learned.

Key Findings

  • Effective employee communication is a leading indicator of financial performance and a driver of employee engagement.  Companies that are highly effective communicators had 47% higher total returns to shareholders over the last five years compared with firms that the least effective communicators.
  • Despite all of the organizational and beneficial changes employers have been making in response to challenging economic conditions, only 14% of the survey participants are explaining the terms of the new Employee Value Proposition (EVP)* to their employees.
  • The best invest in helping leaders and managers communicate with employees.  While only three out of 10 organizations are training managers to deal openly with resistance to change, highly effective communicators are more than three times as likely to do this as the least effective communicators.
  • Despite the increased use of social media, companies are still struggling to measure the return on their investment in these tools.  Highly effective communicators are more likely than the least effective communicators to report their social media tools are cost-effective (37% vs. 14%).
  • Measurement is critical.  Companies that are less effective communicators are three times as likely as highly effective communicators to report having no formal measurements of communication effectiveness.

Makes sense to me.

*The term Employee Value Proposition EVP or “employment deal” broadly refers to what employees can expect from the company and what the employer expects from the employee.

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Comments

  1. The findings in this study are very revealing but the bottom line remains the same, companies that understand the value of an engaged workforce stand to realize greater benefits and a stronger bottom line.

    Communications channels to support the employee value proposition are critical in this market because not all company leaders recognize the ‘value’ of the EVP in helping workers understand the direction of the company and how they (the employees) contribute to the success of the organization. The more the EVP is communicated within the organization, the more employees understand their value, what’s expected of them and what they can expect in return from teh company.

    At the end of the day, the company has stronger engagement with employees. The missing link is measurement, i.e., performance-based measurement which should not be tied solely to rewards, but instead a system that is employee-driven and fosters communication between managers and employees. Don’t get me wrong, rewards are nice but being able to measure how employees recognize on-brand behaviors and demonstrated success is much more valuable in the long run to a company.