Why is employee engagement important?

Why is employee engagement important? Employee engagement comes from great leadership and a great employee value proposition. We look at why it’s the hard fabric of what people are offered (the focus) and the reality of how people are treated every day (the leadership) that drives employee engagement.

The value of employee engagement

Why is employee engagement important? It’s a common question that is asked, but not a simple one to answer. There are plenty of articles listing all of the levers of engagement – communications, clear strategy, rewards, etc. But what is employee engagement? First, I dislike the label. I prefer to focus on employee experience. To me, engagement is an outcome. Experience is everything. But in asking the opening question, I wonder why organisations need to focus on employee engagement in the first place. Does a business even need a strategy?

Let me give you an example, a company is making significant profits. It’s sharing the rewards with employees. The people that work for this company are happy. Every day is a good news day. More products are sold. More ideas are shared. Their bonus means they can buy the things they want. But this company has no employee engagement strategy; no internal communications function; and yet people are happy – they’re engaged. So, what’s driving this engagement?

OK, you’re thinking this is all hypothetical, yes? No. I give you Facebook, Google and Starbucks as examples. In their early years, these companies had no formal employee engagement strategy; no internal communications directorate, they just worked, riding the wave. I worked at a similar business in the early 1990s. The Body Shop at that time was famed for the passionate support it received from employees. Measures on pride; satisfaction; belief in the future were sky high. Customers loved the products; loved what the company stood for (probably because it was divisive and opinionated); and were prepared to part with their cash. Everything was booming.

Employee engagement: How it can go wrong

And then it all went wrong. In the case of The Body Shop, its flagship claim – that its naturally sourced, fairly traded products were not tested on animals – was bought into question in the media. The same has happened at Google as its early “do no evil” claim has been scrutinised and we have seen employees walk out to protest against the treatment of female employees and it being accused of favouring its own services in search results. Starbucks has been criticised for its tax arrangements, and recently found itself involved in ugly scenes by wrongly allowing the arrest of two black customers for trespass (and this link has another pleasant surprise).

And, it is at times like these when an employee engagement strategy becomes so important – when things are going wrong. Because, when things are going right, it’s fine, you’re on a wave. But when things go wrong, it’s a strategy that starts with employees which will see you through.

In the Starbucks case, they were quick to apologise publicly, and more importantly, they shut their stores to provide immediate training for all employees. For The Body Shop, their employees rallied round their leadership, marching in support of the company at subsequent High Court proceedings. But why did this happen?

I’d propose two reasons why Starbucks took action and why The Body Shop received employee support: leadership and focus, and I want to look at these two in a little more detail.

Why is employee engagement important to leadership?

As Aon research indicates, in highly engaged organisations, leaders are perceived as significantly more effective (by roughly 1.7 times) than their counterparts at low-engagement organisations. It is the way in which leaders interact with employees in formal and informal ways. From saying “hello” in the morning, to being visible and accessible. From living the values and talking about the strategy and priorities on a regular basis, to making sure that people have the training and support they need to do a good job. From being humble and showing humility, to inspiring people with examples of what great looks like.

For The Body Shop, their leader Anita Roddick – divisive to many outside the company – inspired a following within the company through her beliefs and her passion for business. Never more happy than when visiting shops and talking to people on the frontline, it was not surprising that when the time came and she needed grass roots employee support, she got it.

Why is employee engagement important to employee focus?

Great employee engagement is underpinned by a clear employee value proposition. That means making clear what you’re famous for as an employer, be it technical training, career progression, career development, benefits, access to products or services, reward or recognition. The EVP at Starbucks is called the “Starbucks Experience”. It includes extrinsic (rewards, benefits, opportunities for career development) and intrinsic elements (purpose, values, management style, work environment and culture). In the case of the Starbucks crisis, the intrinsic elements were threatened. Through ill-advised actions, the idea of culture was questioned because two customers were victimised because of the colour of their skin. The company did more than offer public apologies. It closed its stores. It recognised that a symbolic act was required. That’s an investment in people – a demonstration that it takes its people seriously – as well as an investment in its beliefs, and ultimately its reputation and the bottom line.

Employee engagement comes from great leadership and a great employee value proposition. Great internal communications can help to direct employees and market internally what is on offer to employees, but it is the hard fabric of what people are offered (the focus) and the reality of how people are treated every day (the leadership) that drives engagement.

Do you need an employee engagement strategy? You need to know what you’re offering people and what you expect in return, and then you need to empower and upskill your leaders to make sure that happens. That’s the true foundation for engagement.