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Taking a Closer Look, Part 2 - Employee Engagement

By Dixie Wright on December 4, 2017

Employee Engagement

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, only few companies have a successful grasp on this concept.

In fact, according to Gallup, only 32% of U.S. workers are engaged in the workplace, 50.8% aren't engaged, and 17.2% are “actively disengaged.” HR departments are taking on the consequences of this as well. They’re drowning in paperwork from high (voluntary and involuntary) turnover and dealing with low performance levels and increased healthcare costs, seeing as employees are living with grave financial stress, health issues, and more.

However, companies are forgetting that engaging employees truly comes down to cause and effect. Read on to learn how to leverage the inner workings of high employee engagement.

Let’s Define It: What’s 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 (such as picking up trash while no one is looking or making pleasant conversation with a customer).

This may seem like a no-brainer in the sense that employee engagement is good for an organization. However, this positive impact is actually systemic, extending from immediate success such as better customer service 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.) 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.

Let’s Inquire: What Neurological + Psychological Factors Come Into Play?

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 organisations 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—more so, the neurotransmitters serotonin and dopamine. Rises in serotonin and dopamine does increase feelings of immediate happiness, but these neurotransmitters 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?

Let’s Take a Look at the Research: 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? As established, to be engaged, employees need to feel connected to the organization’s missions, goals, and values. It’s about making an impact for the modern, enlightened employee. 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, and 72 percent of students entering the workforce agree. With purpose-driven jobs comes happier employees, which then comes with 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 socially-responsible benefits being offered to employees—that, in effect, is an oxymoron. An inescapable catch-22. Employees feel this truth as well. Not from a lacking of trying, employees are unable to connect or invest their full efforts in an organization’s mission if said organization isn’t invested in theirs.

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 incapable of engaging in their everyday personal tasks, let alone their organization’s missions and values. There’s no way around the fact that the physically, mentally, and financially unwell are incapable of optimal engagement.

How can you leverage this information?

Let’s Talk Solutions: Improve Employee Engagement in Your Company

High engagement requires an honest appraisal into employee needs. To complete this task successfully, the employer (and/or employee benefits broker, HR department, and so on) must recruit unending compassion and sincerity within themselves to find the appropriate solutions.

And for the employer with workers paid $25 per hour or less, offering a financial wellness benefit is a non-negotiable.  The illnesses and mental distractions that come with financial stress disconnects an employee from their in-the-moment job responsibilities and the ability to connect to a company’s mission. These issues also drown HR departments in skyhigh paperwork such as dealing with high turnover, increased healthcare costs, absenteeism, and payroll advances.

Businesses are normally worried about their needs yet in the occasion they inquire what employees really need, money is an often taboo, unspoken of issue. Though, this unaddressed topic of employee financial stress is plaguing the U.S. economy as well as most industries:

  • 71% of employees say they suffer from financial stress
  • 50% of financially stressed employees spend three hours or more at work each week thinking about or dealing with personal  financial issues
  • 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
  • 64% of stress is money-related

However, 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.

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 in contributing to society’s social and environmental well-being, but they’re also actively contributing to my health and wellness.

From there, the connection and trust has 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.

Contact PayActiv to engage your employees through financial wellness today.

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