- Taking a closer look series
- Part 1: Workplace Morale
- Part 2: Employee Engagement
- Part 3: Employee Retention
Contrary to popular belief, employees need only few things to feel true engagement: A sense of social responsibility and purpose, and the right day-to-day employee benefits. Yet, unfortunately, not many companies have a successful grasp of this concept.
In fact, according to Gallup:
- Only 32% of U.S. workers are engaged in the workplace
- 50.8% aren’t engaged
- 17.2% are “actively disengaged.”
Human Resources departments are taking on the consequences of this as well. They’re drowning in paperwork from high turnover, low-performance levels, increased healthcare costs, and more.
However, companies are forgetting that engaging employees and creating an engaged workforce truly comes down to cause and effect. PayActiv has done extensive research on engagement and looking at how your business can benefit from improving employee engagement. Read on to learn how we recommend you leverage the inner workings of high employee engagement which will lead to high performing individual employees.
What is Employee Engagement?
An employee is engaged when they’re invested in the organization’s success. Moreover, employee engagement is measured by the level of emotional commitment an employee has to the organization and its goals. And, not only does this increase on-the-job engagement in already-assigned tasks, but it also results in employees exhibiting discretionary effort to stay engaged at work.
This may seem like a no-brainer in the sense that a higher level of engagement is good for an organization. However, this positive impact is actually systemic, extending from immediate success such as improved customer satisfaction all the way to higher shareholder returns.
Its process looks something like this:
- High employee engagement leads to better customer service
- Better customer service leads to happier customers
- Happier customers leads to increased sales
- Increased sales leads to higher levels of profit
- Higher levels of profit leads to higher shareholder returns
Employee engagement is the ultimate business prerequisite. Without employee engagement, most companies face impending failure (at best, they’ll achieve mediocre results in the long term). Conversely, organizations with engaged employees perform superiorly, seeing higher net profit margins, higher retention rates, and higher net promoter scores (NPS). It, more or less, becomes a domino effect in business success, with employee engagement being the first domino to fall. Happy employees lead to successful business.
The Science of Employee Engagement
To start, if you’ve never heard of ‘positive psychology’, here’s a brief overview:
The Positive Psychology Center defines the term as, “the scientific study of human flourishing, and an applied approach to optimal functioning. It has also been defined as the study of the strengths and virtues that enable individuals, communities and organizations to thrive.” Driven by a humanistic perspective that focuses on happiness and well-being, much of positive psychology surrounds the fact that the happier you are, the more you thrive in all aspects of life.
Studies on positive psychology explain its measurable impact:
- The positive emotions one feels from volunteering proves to improve well-being and overall life satisfaction, as well as decrease depression and lower the risk for dying early. (US Corporation for National and Community Service Strategic Plan for 2011–2015)
- Creating positive thoughts by recalling pleasant memories or thinking about something you enjoy can immediately improve your mood. This can help improve engagement and avoid exhaustion from faking smiles during work. (Michigan State University, 2011)
- In a SoulPancake study, they had participants write letters about those they looked up to the most. Then, they had these participants call the individuals they wrote about and express their gratitude. SoulPancake found happiness was increased 4 to 19 percent.
In turn, (not surprisingly) organizations are increasingly interested in positive psychology’s role in the workplace and how they can leverage this concept to increase employee engagement.
However, this concept is solidified even further in the neurological realm as well.
Positive emotions lead to a rise in “feel-good chemicals” in the brain. Rises in these chemicals do increase feelings of immediate happiness, but they also enhance the ability to learn within the brain. It improves the ability to think quickly, more creatively, and look at things in new ways which can enhance problem-solving skills and the ability to retain complex information. Basically, experiencing engagement (in a positive light) in the workplace not only is good for said business, but it releases chemicals in the brain which allows for higher thinking capacity.
When employees are happy, they thrive. Consequently, so does their employer’s business. Yet what underlying factors need to exist for employees to feel true engagement?
Studies on Employee Engagement
A Cone Communications study highlights the importance of knowing how to engage the “modern, enlightened employee”. Employees of today expect their employers to care about them as individuals benefits-wise as well as offer opportunities to be of service—such as avenues to participate in volunteer programs or ways to help those in need, be it in-office or on their own time. Moreover, they’re interested in a company’s corporate responsibility (CR) efforts, assessing what said company contributes to society’s social and environmental well-being.
The findings are eye-opening:
- 78% of employees are OK with their work and personal life intersecting more as long as employers provide benefits that help balance both
- 78% say they want to be an active participant in helping their company improve its responsible business practices by providing feedback, ideas and potential solutions
- 47% believe companies need to find a balance around providing opportunities that focus on individuals’ personal interests and the social and environmental issues most important to the business
- 88% feel their job is more fulfilling when they are provided opportunities to make a positive impact on social or environmental issues
Why do employees care so much about corporate responsibility? Employees need to feel connected to the organization’s missions, goals, and values. It’s about making an impact. What’s more, according to Net Impact, more than half (53 percent) say that having a job where “I can make an impact” is crucial to their overall happiness. With purpose-driven jobs comes happier employees, which leads to high engagement.
Yet employers with great corporate responsibility but poor employee benefits still don’t make the cut. Employees can’t possess “corporate responsibility” if there’s a lack of benefits being offered to employees. Employees are unable to connect or invest their full efforts in an organization’s mission if the organization isn’t invested in their wellbeing.
They’re unable to emotionally get behind a company which doesn’t support them with the relevant benefits. Furthermore, the 90 million American workers living with imminent financial stress and stress-related health issues are struggling to stay engaged in even their personal tasks, let alone their organization’s missions and values. Maintaining their status quo trumps the need to go above and beyond for the company.
High engagement requires an honest appraisal into employee needs. To complete this task successfully, the employer must recruit unending compassion and sincerity within themselves to find the appropriate solutions and go the extra mile.
And for the employer with workers paid $25 per hour or less, offering a financial wellness benefit is non-negotiable. The mental distractions that come with financial stress disconnect an employee from their in-the-moment job responsibilities and the ability to connect to a company’s mission.
Businesses are normally worried about their needs yet on the occasion they inquire what employees really need, money is an often taboo, the unspoken issue. Though, this unaddressed topic of employee financial stress is plaguing the U.S. economy in most industries:
- 71% of employees say they suffer from financial stress
- 20% of employees miss work to deal with a financial emergency or because of health issues related to financial stress
- 60-80% of workplace accidents are attributed to stress
- Stress costs U.S. businesses $300 billion per year
How can you use this information to improve employee engagement?
Employee Engagement Strategies
In the event employers do offer a financial wellness benefit, employees are then much more capable of engaging in the workplace. Cultivating a connection and emotional investment in the company’s mission is truly attainable at this point, as the employer has shown their commitment to them in providing a real solution to their day-to-day financial wellness needs.
Some strategies include:
- Regularly conducting employee surveys: Find out your employees’ job satisfaction and get constructive feedback on what can be done to improve working conditions
- Focus attention on employee financial wellness to lessen the burden of financial stresses: Employees with less financial stress can give their undivided attention to their work
- Create opportunities that give employees a sense of responsibility in the company’s impact on a societal level
Then—and only then—an employee is able to connect to the company’s higher mission. They can see clear as day that this employer is not only dedicated to contributing in society’s social and environmental well-being, but they’re also actively contributing to their health and wellness.
From there, the connection and trust have been made. This is where high engagement thrives.
Employees do need more than a financial wellness benefit, naturally. As mentioned, they need to feel like they’re making an impact and are contributing to society in a measurable way. Yet financial wellness for the employees making $25 per hour or less is the foundational measure to take. Corporate responsibility, workplace engagement, and trust and connection can then exist.
Holistic Financial Wellness
Learn how PayActiv measurably reduces employee financial stress and employee turnover.