Employee Disengagement has Financial Implications
Employee engagement has grown in awareness and importance over the past decade, beyond human resources and into the offices of executives and organizational leaders. Why? Because extensive research by Gallup found that, on average, 17.2 percent of an organization’s workforce is actively disengaged. Gallup describes an actively disengaged worker as someone who is “unhappy and unproductive at work and liable to spread negativity to coworkers.” In other words, they are people who don’t like their job and aren’t afraid to let others know about it.
Gallup also found that an actively disengaged employee costs their organization $3,400 for every $10,000 of salary, or 34 percent. That means an actively disengaged employee who makes $60,000 a year costs their company $20,400 a year! Couple that with Gartner research, which found a 13% increase in the number of high-potential, disengaged employees desiring to leave their current companies and you'll see why engagement, or lack thereof, can impact a companies financial health.
According to Gallup's Employee Engagement and Performance Study (2020), developing highly engaged teams results in fewer negative outcomes, more positive outcomes and greater business success:
in employee turnover
So, let's connect the dots and build a case for an employee engagement program.
From Concept to Action
It can be tough to go from awareness of employee engagement to actually addressing it. The answers aren’t always clear, especially for an issue that spans the entire workforce. It’s perfectly natural to struggle with important questions, such as:
- How do we know what employee engagement activities create the right path for improving engagement across our organization and with respect to our unique needs?
- Where do we start when it comes to navigating a market full of confusing technology products and we aren’t making major technology purchases every day?
- How do we change attitudes about the importance of employee engagement and build leadership accountability?
Employee engagement is too important to ignore, for employees and company leadership. That’s why we’re here — to help you understand the advantages of an engagement platform, learn best practices for employee engagement strategies that will get leadership to buy into a plan, and guide you step-by-step to build your case.
How an Engagement Platform Can Solve Engagement Issues
Most organizations are already addressing engagement in some way. Your organization is probably in that same position, too. We find it’s typical for multiple engagement programs and employee engagement activities to be spread across different areas of the same company.
There is a perfectly good explanation for this. For example, well-being might be closely tied to a benefits program. Rewards and recognition has often been the domain of compensation experts. Learning and safety programs often fall under completely different areas of the organization. The technology that supported all of these programs were siloed, so even if you wanted employee engagement under a single area of the business, it would be difficult to manage.
As you’ve probably experienced, these disparate programs make it difficult to get your employee engagement strategies moving in the same direction. Even if you do get everything moving in the right direction, programs very rarely interact well with one another and it’s nearly impossible to measure the effectiveness and make adjustments to them.
That’s why putting your employee engagement programs under a single platform is such a relief. It helps organizations:
- Unify people, engaging them across multiple programs with a single easy-to-use platform
- Unify processes, so you don’t need to work across silos and disparate technologies to make adjustments to engagement programs
- Unify technology, with one place for your employees to access all of the programs that matter to them and one platform for you to manage
With a unified engagement platform, businesses have a simpler way to fully manage all the programs that touch employees and encourage performance.
Getting Executive and Leadership Buy-in
It’s easy to see why people are so excited about the advantages of a comprehensive engagement platform. The first step to implementing it is to start getting buy-in from the rest of your leadership team.
An engagement platform is more than just a technology pitch. It’s a people and process pitch, too. If people see that organizational leaders aren’t using an engagement platform and don’t see the importance, it won’t matter how many bells and whistles it has. So, hHow can you start engaging with your executive and organizational leaders? Well, it all depends on where your organization is as a whole.
For example, if the rest of your leadership team doesn’t agree that engagement is an issue for the organization, you aren’t going to start by pitching them technology. You’ll have to take a step back with those leaders and show them that engagement is something that can and should be managed — even if they feel it’s under control. This is often a conversation that really focuses on the type of culture you want your organization to build. It can be slow going, but you can share a success story about what Southwest Airlines has done to show the results of those efforts.
Other executives might argue that technology doesn’t play a significant role. In most of the business world, technology helps guide your people and processes. Although technology solutions like Outlook and sharing platforms like SharePoint aren’t absolutely necessary, not many could argue that they don’t help encourage communication and collaboration. Engagement platforms work the same way — they combine multiple, formerly disparate programs and encourage engagement in a strategic way.
If there is an openness to an engagement solution, the time is right to put a solid business case in front of your executives that helps illuminate key issues and bring a possible solution to light.
Step by Step: Building a Business Case for Engagement
If you’ve made it this far, that’s great. You’re ready to build a business case that will get your leadership team as excited as you are about creating better employee engagement and investing in a platform.
If you haven’t built a business case for a new technology purchase — or if you’ve never had to do it formally — there are five critical components to include. You can present a business case as a written document, or you can use this format as the basis for your presentation.
Regardless of the format, you should build out these five components so you can successfully articulate why a unified engagement platform makes sense for your organization. For each section, we’ll also give you a brief example of what you might cover as part of it.
1. An executive summary
In two or three paragraphs (or one or two slides, if you’re doing a presentation), you’ll want to summarize your proposal. This should include a succinct argument for the critical business drivers, the benefits of engagement, potential risks and a possible solution. As you create this summary, you should keep your audience in mind. If they were to read only this summary, would they understand the problem you are addressing and the solution you are proposing?
ACME Co. has long been a leader in our industry. Over the last five years, though, it’s been more difficult to recruit new employees and our voluntary turnover rate has increased. When we investigated core reasons for this, we found that employee engagement is a major issue. We believe that unifying our existing engagement programs under a single technology platform will help us encourage engagement, lower costs, increase productivity, reduce voluntary turnover and ultimately help ACME Co. become more profitable.
2. Addressing the overarching issue
This isn’t about your problems or what you’re trying to solve for yourself. This section is about focusing on the business and workforce drivers that are pushing you to recommend a shift in technology. A good example of a workforce driver might be higher turnover or low engagement. A business driver might be increased productivity or decreased staffing costs. If you’ve done internal research on these issues, this would be a valuable place to share it with your leadership team.
Over the last five years, the median age of ACME Co.’s workforce has increased dramatically while our voluntary turnover, especially among midlevel employees, has shot up more than 10 percent. Our training and recruiting costs have increased as a result of this challenge. In our latest survey to our employees, we found engagement to be an issue, with only 25 percent of employees identifying as engaged. The possible disruption to our business and an unsustainable cost increase are inevitable unless we take action.
3. Current state of engagement technology in your organization
In this section, you should be covering the landscape of technologies that currently touch the workforce in engaging ways. Your audience may not know how big and disparate all these technologies truly are. Address the ways that they are working today and the ways they could be improved. Specific examples of strategy or execution frustrations and challenges are important to highlight here as well.
When we looked at how we were engaging employees, we saw several issues. Our current rewards and recognition solution is really only focused on milestone celebrations, and with 59 percent of our employees not even reaching the first major milestone at five years, they were never formally recognized. Other solutions that we know drive engagement, such as well-being and learning, are focused primarily on cost containment and compliance, respectively. The engagement of employees really rests on the shoulders of managers, and the results are rightfully inconsistent across the entire organization.
4. The proposed solution
A proposed solution isn’t just an engagement platform technology. You’re also proposing a people and process change that needs to accompany it as well. This section should explore the potential benefits, downsides, costs and risks of rolling out a new engagement platform. This is also the appropriate section to cover the cost and risks of the alternatives, whether that’s continuing to use your current technology platforms or doing nothing.
My team and I began to investigate solution alternatives and found a compelling choice with Inspirus’ employee engagement platform. The platform will replace our existing recognition and well-being solution, and add formal safety and performance programs, which we had investigated separately. The cost structure doesn’t change significantly and we see minimal risk, given the low current usage of existing technologies. We believe that alternative solutions aren’t as comprehensive and that doing nothing will lead to continued inconsistent engagement results and steadily increasing turnover.
5. What outcomes to expect from an engagement platform
This is the last part of the presentation or document where you lay out the specific timelines and ways a better engagement solution can help improve your programs. Leadership teams care about one important thing: results. So make sure you don’t shy away from the outcomes you’re expecting, whether it’s ROI, expected impact on engagement, costs, or reduced business or workforce risks.
In talking in depth with the Inspirus team, they’ve been able to roll out similar projects with companies our size in approximately nine months. Once fully implemented, we expect the platform to reach 80 percent of the workforce on a monthly basis, with nearly 100 percent participation over the course of each quarter. We’ll create a rollout plan and manager training program — and it will require all of our leadership to participate as well. After one year, we expect our engagement scores to increase by at least 10 percent and we project five-year turnover numbers to drop by 8 percent. Assuming we’re able to do this, we hope to decrease the use of outside staffing resources by 5 percent in as soon as two years.
As you’re going through this process, you can always contact Inspirus if you have any questions. We’ll be able to connect you with the right resources, and if you need them, possible references to help you tell the right story to the rest of your leadership team.
We understand a unified employee engagement platform better than anyone since we offered the first truly comprehensive solution. We can tell you the ways our customers have been successful, and guide and support you in your quest for better employee engagement.
Additional Resources to Help Build Your Case
Unifying Employee Engagement Technology — How can your organization unify engagement technologies? Understand the inherent issues with unifying so many disparate employee engagement technologies and explore the possibility of uniting them under a single technology platform.
Employee Engagement: Getting a Complete Picture of the Employee Experience — Engagement is about the entire employee experience. Business leaders and C-suite executives put employee engagement at the top of their to-do lists. But executing on that idea requires a holistic look at the employee experience and a solution that spans multiple touch points.
Case Study: Southwest Airlines — How do you link company values to every recognition and incentive program? Inspirus created a platform for Southwest Airlines that allowed the company to consolidate all of its recognition and incentive programs into one enterprise-wide system.