CEOs failing to get behind engagement strategies
An exclusive survey of HR directors and senior managers by HR magazine, conducted in association with career management expert Fairplace, finds that the progression of employee engagement in the UK appears to have hit a brick wall, in the form of board-level reluctance to commit.
The survey reveals that, although the British HR community overwhelmingly believes in the power of staff engagement, with 98% agreeing that it has an impact on business success, almost half (47.7%) say there is no executive sponsorship of engagement initiatives within their organisations. While 72.9% of respondents measure engagement levels of staff, the research shows that taking the next step – linking engagement to business outcomes – is not happening in 40% of workplaces.
This implies a distinct lack of 'buy-in' from the top. The survey reveals that in 27% of instances there is no attempt to measure employee engagement levels at all. Managers are held accountable for their teams' engagement levels in only 46% of organisations. And very disappointingly only 44% say their company considers employee engagement as 'a strategic approach for driving organisational change' – everyone else thinks of it as 'an HR initiative' only (32.6%), or they don't have an opinion on it at all (23.1%).
Lip service to engagement
Furthermore, many companies are merely paying engagement lip service. Of the 14.6% that specify 'other' means of measuring employee engagement (rather than the 67.5% that have an annual engagement survey), typical assertions were: 'Employee survey carried out every few years' and 'we have informal discussions with staff'.
HR directors are rightly concerned about the findings.
"Attitudes like this are worrying. If you measure in two-year periods, how much board level airtime is engagement getting?" wonders Andy Doyle, group HR director at ITV. "I'd say none."
The fact that 98% of HR professionals acknowledge engagement as a business driver is to be expected says Michael Moran, chief executive of Fairplace.
"In the wake of last year's engagement-endorsing MacLeod Report Engaging for Success, which so clearly set out the vision for staff engagement driving up productivity and profitability levels in Britain, engagement can't fail to be a hot topic in HR circles," he says.
"But what this survey has flagged up very clearly is that too few CEOs have engagement on their agenda today. And as we face several more years of austerity, and are telling staff it's 'shoulders to the wheel' time, that's a very dangerous position to be in."
Moran feels that with pressurised situations in the workplace, such as "eight people doing the job of 10" today, there's a real risk of motivation plummeting, and chronic disengagement setting in. "So now more than ever attitudes towards employee engagement at board level need to change."
"I believe people will remember how you treated them through the recession, and when the labour market does pick up, colleagues are more likely to stick with you if they've continued to feel involved and valued," comments Jacki Connor, director of colleague engagement at Sainsbury's. "I think the HR survey findings show many organisations are worried about return on investment from engagement programmes, but we've proved that if you work hard enough you can see a link between engaged employees and customer satisfaction, leading to sales growth, and many other benefits.
Line managers disconnected from engagement
Much in the HR survey points to the core foundations of engagement not being in place. Clearly leaders aren't always fully committed, and we find that line managers who are held accountable for their teams' engagement levels are in a minority (only 45.9% of organisations do this). "If line managers can't measure performance, give feedback, communicate both strategic and operational objectives and inspire and motivate their people, then even starting engagement is unwise," comments Chris Roebuck, visiting professor of transformational leadership at Cass Business School.
Philip Barr, HR director at Yell, says Yell's highly-engaged workforce relies heavily on the motivational and support skills of excellent line managers. "Our line managers see it as part of their job to ensure teams are as engaged as possible, so I think without that structure it would be hard to deliver business benefits," says Barr. "We have a culture of taking pride in engaging our teams, and if there are instances when the very high standards slip for any reason, our line managers will act fast and have the tools and training to sort problems out."
Of the 39% of organisations that have no strategy to increase employee engagement levels, 31 % says 'cost is prohibitive', 22% say 'leader does not understand the concept', and 19% say 'leader is not aware of business benefits'.
Penny hasn’t dropped… yet
Engagement expert David MacLeod recognises that many bosses are still not seeing the transformational potential of engagement, but he's hopeful that all the compelling reasons for increasing engagement levels continue to be promoted by government and business leaders.
"There's a UK-specific need to come through this recession and return to growth and prosperity for the sake of the domestic economy. And there's a global need for us to compete effectively internationally, as the BRIC (Brazil, Russia, India, China) countries grow more powerful in so many markets," he says.
"In the years to come we are going to have to be extremely good at what we are good at, and that will require highly engaged people performing at their peak."
Raising the profile of engagement among leaders in all sectors of the economy is the MacLeod Report recommendation, and work is on-going in the current government to this effect, says MacLeod. He believes much can also be achieved by "learning from best practice".
Case studies in the report from organisations such as the Department for Work and Pensions, and private sector companies including Telefonica O2, The Co-operative Group, KPMG, Amey and Standard Chartered, show what can be achieved. It's well-known that companies such as Aviva, Sainsbury's, Diageo, Rolls Royce and AstraZeneca place great importance on colleague engagement, and have seen business benefits such as improved profitability, more innovation, brand advocacy and better safety in the workplace.
Many HR experts feel that the recession has caused a polarisation of opinion among CEOs about engagement, and this also reflects the MacLeod Report's view that there are two levels of engagement in workplaces across the UK. The first is carrying out measurement and engagement activities that aren't integral to business strategy, and the second is about employees being viewed as integral to delivering the overall business strategy.
"Where we see employee engagement viewed in the first way, as just an 'add on', the benefits will be limited," says MacLeod. "But where employees are at the head of strategy development and delivery, where views and ideas allow the organisation to be more market responsive, where identified improvements are acted upon, you're driving transformational engagement," says MacLeod.
The CIPD's research into organisations implementing employee engagement strategies suggests that around 75% fall into the first category and 25% into the second, he adds. HR magazine's survey found that 44.3% of respondents felt their organisation considers employee engagement as 'a strategic approach for driving organisational change', but the number genuinely executing this could of course be lower.
Engagement seen in isolation
The survey found that 72.9% of organisations do attempt to measure employee engagement and most (67.5%) do have an annual engagement survey. But when it comes to linking engagement to business outcomes, the figure drops to 59.7% and 'correlating employee engagement to business performance' was happening in only 51.6% of workplaces.
"Clearly too many companies are looking at the employee survey as an isolated HR project and not a change process," says Stephen Young, director of employee surveys at Towers Watson. "Having a meaningful strategy with buy-in from the CEO is the exception rather than the rule. Too often companies think about raising their engagement score and are thinking about improving satisfaction levels, but don't make the intrinsic link to how acting on the findings can drive higher performance. It doesn't have to be a massive project because you can target the metrics to where there's a specific performance problem, and act on a micro level to deliver results."
A robust communication strategy is needed to drive any professional, far-reaching engagement project, yet the survey shows 40% of organisations aren't maintaining a focus on employee engagement throughout the year. The recent revelation that only 38% of BBC employees believe senior leaders communicate their strategies effectively, and just 45% of staff feel BBC executives behave in a way that is consistent with the broadcaster's values, shows how damaging poor communication can be.
This survey shows that leaders currently lack understanding about what drives engagement, and if 48% of companies don't correlate employee engagement with business performance, as the findings reveal, it means a vast number of organisations are missing a trick," says Hopkins.
Highly-engaged workers will undoubtedly be needed to haul UK plc out of recession, but our survey shows the issue is currently overlooked, or too HR-centric. Successful improvements to employee engagement levels need to be dynamically linked to overall business performance urges Moran at Fairplace. "What if executives' bonus pay-out were dependent on achieving a certain level of employee engagement?" he suggests. "Buy-in will only be achieved if organisations start thinking that way."