The Importance of Employee Engagement in Turbulent Times

Whilst most organisations would prefer to be continuously thriving, the reality is that economic downturns are part of life. The Bank of England is predicting that we will soon enter one of the longest recessions in 100 years, meanwhile various news outlets are reporting that we are already in recession. Either way, one of the first things that businesses tend to do in a downturn is stop their spending. However, research has established that it might be worth taking a different approach where possible. So could spending on employee engagement in turbulent times actually help organisations?

What is Employee Engagement?

Employee engagement is a workplace approach designed to ensure employees are: committed to their organisation’s goals and values, motivated to contribute to organisational success and are able, at the same time, to enhance their own sense of wellbeing. It needs to be measured on a regular basis so that management can see trends and act if required.

In turbulent times engaged employees will want to do their best for an organisation and when things get tough, they will step up.

Why use Employee Engagement in Turbulent Times

When an organisation is struggling, it’s tempting to put engagement efforts on hold. However, according to Business Leadership Today, employee engagement can affect an organisations’ profitability in a number of ways. It can considerably improve absenteeism, productivity, safety, employee and customer retention. In turbulent times an engaged employee will adapt and innovate, which will have long term benefits for an organisation.

We’ve all heard stories about companies that cut their spending so much during recessions that it did more harm than good. Harvard Business Review (HBR) conducted empirical research that found that “Companies that master the delicate balance between cutting costs to survive today and investing to grow tomorrow do well after a recession.”

Notably, they found that the organisations that navigated a recession by using a combination of defensive and offensive strategies had a greater chance (37%) of successfully negotiating a downturn.  These were organisations that would invest in operational efficiency, they would be selective in their spending by investing in the future – things like marketing, research and development etc.  It was found this multipronged strategy was the best approach during a recession.

What’s that got to do with employee engagement? If we’re talking operational efficiency, we already know that engaged employees are more effective in the workplace.  According to Engage For Success, organisations that have implemented employee engagement initiatives reported a “223% increase in customer retention  and a 26% increase in yearly profit.”

Similarly a study conducted by Gallup, found that “businesses with higher employee engagement have a more exceptional ability to weather a volatile economy – generating better operating income, net income growth and earnings per share.” They also reported that engaged employees are more willing to roll their sleeves up to see organisations through turbulent times.

Historical evidence has shown that employee engagement is critical to an organisation’s commercial success.  Although there are many factors influencing an organisation’s growth, according to Business Leadership Today, the one thing that has the biggest impact is employee engagement.  Companies with poor employee engagement achieve an operating income that is 32.7% lower than companies with highly engaged employees. Furthermore, “disengaged employees cost an organisation approximately $3,400 for every $10,000 in annual salary.”

The figures speak for themselves.  Investing in people is an investment in an organisation’s future. Specifically, investing in employee engagement in challenging times can put you ahead of your competitors – even during downturns.

Whilst this all sounds positive, there will be organisations that have no choice but to impose redundancies and that can cause concerns for the remaining staff. Overwork, stress, low morale and being short staffed will remain key issues for many organisations. According to HBR, redundancies can have a terrible effect on an organisation with “Employee productivity and job satisfaction decreasing by 20% and 41% respectively post layoffs”.  This is where employee engagement can once again prove a highly effective tool.

Whether an organisation is able to retain all talent or has to let some go, the importance of employee engagement cannot be argued. But what else can practically be done during troubled times?

• Open Communication
  Open communication enables people to contribute and offer solutions just like Gravity Payments, who, during the pandemic had open conversations with their employees and collectively decided to take pay cuts instead of furloughs or redundancies. Their founder and their CEO cut their pay to $0 in solidarity! Open communication can also reduce anxiety brought on by the unknown, which can distract and lead to disengagement. When people are kept up-to-date in a transparent manner their anxiety and expectations can be managed.
• Training
  One thing that often comes to light when we undertake surveys is that some people would really like to upskill but they don’t have the time. A recession can offer that opportunity – giving people who have experience and knowledge of the organisation to increase their skills knowledge and really fly when things start to pick up.
• Give Thanks
  Give thanks at all times, but especially in turbulent times. Because everybody appreciates being recognised for the effort they put in.

Ultimately though, increasing operational efficiency by focusing on employee engagement in challenging times could make the difference between organisations that make it through the storm and those that don’t.

If you would like to know more about how The Survey Initiative can help your organisation improve employee engagement call us on +44 (0)1255 850051 or email: info@surveyinitiative.co.uk