In it together
/ 01 September 2009
Want a workforce of high performing, wholly committed and inspired employees? Then you need to engage them – so says the hotly anticipated MacLeod Review of employee engagement, published in July 2009. Paul Sweetman assesses the findings and asks what they mean for managers
Not many managers would deny that a workforce of fully engaged, highly motivated staff who consistently give of their best is the management equivalent of the holy grail. How to get there is less cut and dried. Enter the MacLeod Review of employee engagement, a long-awaited report published this summer, which aimed to – in the words of former business secretary, John Hutton – ‘better understand what drives some businesses to engage with their workforce... and look at how we can urge others to do the same’.
The Review was asked to examine whether wider take-up of employee engagement practices could improve UK productivity and meet the challenges of increased global competition. So does the report provide the answers? And what are
its implications for managers?
The Review team explored the role, benefits and drivers of employee engagement by taking views and soundings from a range of employers and stakeholders. The evidence it presents makes a compelling case for the impact of employee engagement on business success. It contains an extensive range of statistics and case studies that demonstrate how engaged employees make a major difference to the bottom line in areas such as productivity, voluntary turnover, absence rates, innovation and competitiveness.
To quote just a couple of examples: a Gallup survey of 89 organisations found that the earnings-per-share growth rate of those with top quartile engagement scores was 2.6 times that of employers with below-average scores. Taking another approach, evidence from Nationwide shows that, in areas of the business with high engagement, sales of banking products were 14% higher and sales
of general insurance were 34% higher than in areas with low engagement.
A highly engaged workforce is valuable at the best of times, but in a downturn it really comes into its own. Galvanising support and commitment from employees is even more important in challenging times, says the report, by strengthening the trust and common purpose that can help organisations navigate the storm.
Failing to create that engagement, however, can undermine employee confidence, dilute teamwork and hinder productivity. And the report contains evidence suggesting that many businesses haven’t quite grasped this. It quotes research by the Corporate Leadership Council suggesting that ‘the number of highly disengaged employees has increased from one in 10 to one in five from the first half of 2007 to the second half of 2008’, along with analysis from Gallup suggesting that in 2008 the cost of disengagement to the UK economy was between £59.4 billion and £64.7 billion. Addressing the ‘engagement deficit’, as the authors put it, will benefit individual businesses but also the productivity and performance of the UK as a whole.
A convincing case
In light of such evidence, even the most sceptical employers can’t deny the difference that employee engagement can make. The report goes on to examine the core drivers for achieving that difference, identifying four key components: leadership – based around a ‘strong strategic narrative’; engaging managers; an effective and empowered employee voice; and organisational integrity, so that behaviour in all areas is consistent with stated values.
The MacLeod Review could not have been clearer about the importance of managers in creating effective employee engagement. Managers are a real driver for embedding strong, productive relationships with staff, playing a pivotal role in equipping, communicating with and supporting their teams to give their best: ‘Employees’ most important relationship at work is with their line manager; people join organisations, but they leave managers’.
But the report also warns that poorly trained or uncommitted managers can really undermine those relationships. Many organisations highlighted the current scarcity of training on leadership and management as a significant barrier to effective engagement in the workplace.
Managers matter
These findings are not particularly new. Many previous studies have highlighted the impact that managers have on employee engagement and business success and the way that managers treat staff is, self-evidently, an important factor in gaining what you need from them. The report’s use of terms such as ‘respect’, ‘trust’, ‘courtesy’ and ‘integrity’ simply reinforces the importance of good management practice.
The report doesn’t go into detail on practical steps that organisations, and the individual managers within them, can take to enhance employee engagement. The authors make the point that the Review is not a ‘How to’ guide, but the lack of advice does leave managers wanting more, and waiting for guidance on what to do. The report calls for the provision of practical guidelines by March 2010, but this may be a little late for some managers who have been convinced by the case for employee engagement and want to take action now. The delay in ideas could also hinder the role that enhanced employee engagement could play in bringing Britain out of recession.
However, the MacLeod Review has undoubtedly drawn attention to an issue with which leaders and managers are constantly wrestling. With its convincing case for improving employee engagement, it’s a powerful tool for promoting the business benefits of a fully engaged workforce. By wholeheartedly banging the drum for better employee engagement, it’s the first step on the road to that management holy grail.
Paul Sweetman is a director at communications consultancy Fishburn Hedges, where he is a member of the employee engagement practice. For more information, please visit their website