Employee Engagement:
it is vital to know the numbers

Some years ago, I was on the Europe, Middle East and Africa Board of a company. We had 2200 people in 34 offices in 21 countries. I had done considerable research into our people. I presented the results back to the Board at a meeting in New York.
 
“Gentlemen” I said – there were no ladies sadly -, “We have 34% staff turnover. This means we lose one third of our entire workforce every year. It is not acceptable.” HR spend 80% of their time on recruiting when they should be doing other tasks.
 
One of the three regional presidents said: “Well that is the same as the industry average.”  I replied: “The industry average is 22% and who wants to be industry average in any case? Our biggest competitor is at 10% and is stealing our best people. “
 
I then said: “How much do you think this is costing us?” They had no idea. I said: “Using a standard formula from the CIPD, the answer is £9 million per year.” There was stunned silence in the room: this was the same as our planned EBIT.
 
The CEO knew where I was going with the next question. I had briefed him the night before. I said: “What do you think is the root cause of this?” A few responses came back, none of them accurate nor close to the mark.
 
I told them: “Our research indicates that the root cause is here in the room, I am looking at it. People don’t leave companies they leave managers.”
 
Employee engagement today is rich in numbers and high on the priority of many senior executives.
 
Gartner say that an engaged workforce’s discretionary effort can make as much as 20% difference to the bottom line. And yet a recent Gallup report showed that 83% of employees are not engaged. Despite this, companies with highly engaged people outperform their peers by 147% in earnings per share. Engaged staff are four times more likely to recommend their company’s products and services.    
 

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