Six Hard Facts Every CEO Needs to Know About Employee Engagement

Posted on February 12th, 2016

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Part I: Disengaged Employees Cost You Money

The war on talent. Lean organizations. Fierce competition. If you’re like most CEOs, you’re well aware of the challenges facing your business. You’ve tried quality. You’ve tried Lean Six Sigma. But in today’s environment, there’s only one sustainable competitive advantage. Employee engagement.

Let’s start with a definition of employee engagement.

At WorkplaceDynamics, we define employee engagement as a powerful connection. A connection that results in employees’ contribution of discretionary effort and energy that benefits both your organization—and the individual. As the executive leader, you notice employee engagement in individuals who are passionate about what they do. Employees who are dedicated to your organization, who are not out looking for new opportunities. Employees who give 110% to your organization because they want to.
employee engagement

Here are six hard facts every CEO needs to know about employee engagement:

  1. Disengaged employees cost you money.
  2. “Show me the money” isn’t where it’s at.
  3. Disengaged employees are “silent killers”.
  4. Ignoring disengaged employees hurts your bottom line.
  5. Disengaged employees aren’t HR’s problem to fix.
  6. Engagement isn’t just for frontline employees and middle managers.

This series will discuss each of the six facts, but let’s start here:

Fact #1: Disengaged employees cost you money

Retention cost

Disengaged employees are far more likely to leave your organization than those who are engaged. And make no mistake, employee turnover is costly. Research shows the cost to replace senior managers is 1.5 – 2 times their annual salary1. Similarly, the replacement cost for employees and team members is 70% of the annual salary by the time recruitment costs, productivity time, onboarding, etc. are considered2.

Picture this: You’ve got 10 disengaged middle managers who left your organization for different opportunities. Conservatively speaking, that’s $750,000 worth of talent that just walked out the front door. Ouch! But even worse, what if they don’t leave?

Imagine the same group of middle managers plopped in their chairs. They stay, disengaged, unenthusiastic, and lacking passion. They could also be compelled to undermine your efforts and spread their misery like a cancer. Now that’s painful.

Productivity cost

Disengaged employees cost you in terms of productivity, too.  Research reveals organizations with a high-engagement culture outperform others by more than 20%. And let’s not forget, productivity is a key indicator of an organization’s potential for long-term growth.

This time, let’s say you have five disengaged managers on your staff. With the unproductive dollars, you could acquire a new, engaged manager who kicks the strategy ball forward. But keep in mind, this leaves you with one true contributor when you could’ve had two.

Consider a larger organization with 100 disengaged employees. It could’ve acquired the talent to staff two full departments of ten high performers each—or opted to invest the money for a capital project or bonus distribution.

And that’s not all

A lack of engagement will cost your organization in other ways too, including quality, safety, and customer retention. According to Gallup:

Next time, tune in for hard fact #2: Show Me the Money Isn’t Where It’s At.

1 Bersin and Deloitte

2 SHRM


eBay: Creating a Marketplace for Engaged Workers

Posted on February 8th, 2016

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Innovations in Attracting and Retaining Top Talent

eBay, the company synonymous with e-commerce, continues to innovate, and not just with the data it manages and the transactions it oversees. It’s innovating how it attracts and engages employees. Look no further than Austin, Texas as an example.

The company, headquartered in San Jose, California, has about 20,000 employees worldwide. Yet even in its smaller locations like Austin, which has about 400 employees, a deep investment in employee engagement is helping the company stay focused.
eBay

An engaged workforce is the key to retaining top talent

As a business, eBay is no youngster, recently celebrating its 20th anniversary. Part retailer, part technology powerhouse, it continues to transform how people shop and do business worldwide. As a workplace, eBay leadership understands employees are the foundation of its success. The company recently announced expanded family leave benefits for new mothers and fathers as well as employees who are caring for sick family members.

Leadership believes an engaged workforce is key to employee retention in a competitive environment, said Zachary Jacobson, General Manager. He’s part of the Austin team that has been a perennial winner on the Top Workplaces list. In 2015, it ranked No. 26 among mid-size organizations (150 to 499 employees) in the Austin area.

A talent war in the local job market creates competition for good employees, and eBay competes for all levels of talent, Jacobson says. On top of that, the recent split of PayPal from eBay has added another sense of importance to the efforts. Given the strong competition for top talent and the perceived threat of layoffs, eBay wants to ensure it nurtures as strong a workplace culture as possible to retain employees.

Success is a “we” thing at eBay

Among its leadership principles, Jacobson said:

To support those principles, eBay’s leadership in Austin decided to create—and support—four different committees from which employees could choose to get involved:

Employees could choose whether or not to get involved with a committee. Leadership provided the resources, support, and mentors; the rest was up to the employees, including an action plan and monthly review meetings. “We empowered our employees to do great things and to apply their passion to something meaningful,” Jacobson said.

An investment in employee engagement speaks volumes

The Austin team recently measured employee engagement through the WorkplaceDynamics survey, and the results did not disappoint. In anonymous comments, Austin’s employees repeatedly said they felt appreciated, motivated, and supported.

“The leadership is awesome and there’s peace of mind knowing people stand 100% behind you, whether it’s a manager or a teammate,” one employee said. “eBay encourages me to be the best I can be. I love eBay and I love what we do,” another commented.

Leadership’s efforts are showing results. Workplace positivity among eBay’s Austin employees measured 12 percent higher than the benchmark for the information technology industry.

“Never before have I worked for a company that takes employee engagement so seriously,” Jacobson said. “We want to promote the eBay brand as being a great place to work in and around Austin, Texas.”