The employee engagement trend has received positive attention in many HR magazines, presentations, and blog posts. Of course, on its surface, engagement is a good thing. Why wouldn’t you want your employees to be engaged? But media coverage and feel-good vibes may not be enough for your executives to approve and fund an employee engagement program at your company.
In his presentation, “Engagement: The $500 Billion Problem and Why HR is the Solution” at the 2018 SHRM Conference and Expo, Ben Cook, president of Acumen Learning, explored why business acumen is the key to unlocking the benefits of employee engagement programs for your executives — and their budgets.
Business acumen is not only about knowing your company’s finances, according to Cook. It’s an interdependent combination of cash, profit, growth, and assets, with your people at the center. While all of these aspects interact with each other, your people are ultimately what drives your business success.
As a result, companies that invest in and engage their people are more profitable, and companies that are more profitable can invest more in their people, creating a positive cycle. But caring for employees alone is not enough. You have to make sure your program has a solid financial foundation.
Investing in employee engagement
How can you propose investing in employee engagement to your executives? Start by connecting what HR does and what employees do to achieve your company’s goals.
Craig Jelinek, CEO, Costco: “We know it’s a lot more profitable in the long-term to minimize employee turnover, and maximize employee productivity and loyalty.”
Many organizations have mission statements. Unfortunately, employees don’t necessarily know and understand them. As an HR professional, you must first continue to get that message across. Secondly, the initiatives you take as a department must enable that mission. If HR is not reflecting what the company wants to become, there will be a disconnect and it’ll be harder to sell your initiatives to your executives. And finally, who enables those initiatives to achieve the company’s mission: engaged employees.
Tapping into the power of your employees
One way to strategically engage your employees is to help them improve their business acumen in terms of the executives’ focus on cash, profit, growth, and assets.
Gallup, State of the American Workplace: “Companies with engaged workforces have higher earnings per share (EPS), and have recovered from the recession at a faster rate.”
Among the Fortune magazine and Glassdoor lists of best companies to work for, employee engagement has led to greater profits and stock gains compared to the S&P 500. Engagement works for them, but most companies are doing an inadequate job connecting employees and what they do to the economic value of the company.
Only 40 percent of initiatives meet schedule, budget, and quality goals. — IBM
This is not surprising, as only 15 percent of workers are engaged, according to Cook. However, HR can drive that engagement in two ways:
1. Connect an employee’s work and the organizational strategy.
Harvard Business Review has stated that 95 percent of employees are unaware of, or do not understand, their company’s strategy. By connecting the dots between an employee’s daily activities and how they help achieve the company’s — i.e. the executives’ — strategic goals, it gives employees a greater sense of purpose and achievement.
2. Communicate the importance of an employee’s job to organizational success.
Acumen Learning has found that 90 percent of business professionals don’t understand important business metrics used by CEOs to measure success. It’s important to try to educate employees on these concepts and statistics, where applicable, so that they can see how their efforts directly impact company success. Can your employees answer:
- How much cash was on hand at year end?
- How much cash was generated from operations?
- What were total revenues or sales?
- What was net income?
- What was net profit margin?
- What was the company’s return on equity?
- What was the company’s return on assets?
- By what percent did revenue grow?
- By what percent did net income grow?
- By what percent did earnings per share grow?
How can you accomplish this at your company?
Some organizations are addressing employee engagement by creating management toolkits for new managers and supervisors; others are developing wellness programs to improve employees’ physical and mental wellbeing. Cook closed his session with three basic tenants that can help your company on the way to greater engagement.
1. Make work meaningful.
Teach business acumen, make it a core competency, listen to your company’s earnings calls as a team, and drive a culture of transparency and openness.
2. Be mission-driven.
Develop and communicate a strong sense of purpose, continually invest in the growth of your people, hire and promote those who “think like owners,” and ask employees what they’re doing to contribute to company goals.
3. Measure business performance.
Measure engagement (not satisfaction), and involve the C-suite in employee engagement. Do they care about employee recruitment and retention? Those are the largest levers executives can pull in order to achieve the company’s goals.
Employee engagement is more than a buzzword, and it’s about more than smiling, happy employees. Show your executives how engagement can raise productivity, and improve retention and growth. Don’t let them get stuck on the costs of your proposed engagement efforts. Make a connection between bringing in the right talent, encouraging them to be more productive, and expanding the business in a positive way.
Ultimately, engagement is a strategy. If you talk about it in the language executives understand, you may soon have the opportunity to prove it’s a winning one.