Why CEOs Should Care About Employee Engagement

Former Apple CEO, Steve Jobs used to say that “the only way to do great work is to love what you do.” And — like most things with Steve Jobs — that’s not just some feel-good aphorism. There’s hard data behind it that CEOs need to pay attention to — because an engaged employee is at the heart of modern business success.

First, though — and to be clear — employee engagement isn’t just “happiness.” After all, we’ve all known employees who were both perfectly happy and utterly unproductive. Jobs was on to something profound when he said great work is about loving what you do. After all, when you love a person, you fully understand them, you’re committed to their future and you’ll go the extra mile to help them succeed.

The same is true if you love your work. Engaged and happy employees are 18% more productive. Engaged employees out-perform and out-produce non-engaged employees by 202%. And companies with engaged employees result in 21% greater profitability. All of this translates into fewer absences on the part of workers, and — not surprisingly — greater customer loyalty and satisfaction.

Employee engagement does more than just increase productivity and profitability — and does even more than raising morale and client satisfaction. It helps to avoid unnecessary costs.

Take retail as an example. The retail sector suffers from a turnover rate of 35% and retail organizations lose up to 236 million productive days to turnover and approximately $19 billion in costs to hire and train new staff. In an industry that revolves around customer experience, much more is being lost due to declining consumer satisfaction and brand equity because of unengaged employees. Part of this is a circular problem — employee satisfaction is low because of the challenge leaders face maintaining in-store processes or sectors. These challenges are compounded by training in a high-employee turnover environment.

For companies suffering from low employee engagement — and places where the prophecy of low worker satisfaction is a self-fulfilling one — the task is to build a culture of engagement. I believe for employees to be truly engaged, workplace culture must include:

• Job clarity and direction
• Better feedback
• Strong peer relationships
• Continuously developing professional skills for the future
• Leadership development

Companies and other organizations that meet these five criteria can expect to see engagement levels increase — and turnover rates to decrease. Of these, skills and leadership development are probably the first — and easiest — place to start. And, in fact, learning can be a powerful tool in addressing several aspects of engagement.

To that end, here are three learning strategies every organization should consider:

1. Facilitate intergenerational knowledge sharing using efficient, readily available and easy to adopt tools such as mobile video presentation capture. Gone are the days of the printed employee manual that gathers dust and is almost always out of date. Technology provides the flexibility to allow organizations to quickly and nimbly take advantage of new opportunities and change priorities — a must in a hyper-competitive and quickly changing economy. This is necessary because one challenge facing almost all organizations is the looming retirement — and therefore turnover — of older workers. If not properly prepared, companies could lose valuable institutional knowledge that younger workers could use and apply. Engaging younger workers through learning helps them transfer new knowledge to experienced workers (and vice versa), creating a positive feedback cycle across generations.
2. Broaden the definition of leadership to include people who are leaders in their area of expertise. We are used to thinking of “leadership” as “people leaders,” and recognizing and compensating only those workers who lead people. For example, if you’re a great programmer and want to advance your career, traditionally the only way you can do that is to lead a team, and the company loses your technical skill-set as a result. Recognizing people as leaders in their field is another method CEOs can use to help people who are technically proficient stay engaged in their important work.
3. Make learning and the quest to close the skills gap an organization-wide mission. Providing workers with new opportunities is great — but it has to be applied consistently across organizations to be effective. Daily feedback, retrospectives (i.e. using reflection as a learning tool to drive engagement – whether daily or routinely to show progress against outcomes) and reflective activity all help to engrain a learning culture. Importantly, learning is — and must always be — a tool to encourage the success of a diverse workforce. Gender, culture, race, sexual orientation, disability or any other difference must never be a barrier to learning and professional development. Not only is it the right thing to do, it is the smart thing to do, as research suggests that heterogeneous teams consistently out-perform homogenous teams.

At the end of the day, there are many ways to help employees love their work — and do great work. Creating a learning culture is an important way to start.

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