Employee retention has become a moving target for companies of all sizes and industries in the past few years, with annual voluntary separation rates hovering in the 15-23% range for U.S. companies. With widespread layoffs affecting over a million workers in the past 15 months, the stability that employers and their workers previously relied upon has weakened considerably. When considering the impacts of such disruptions to team chemistry, internal work processes and methods, and operational staffing levels, the associated effects on productivity, production levels, and customer expectations are substantial. As such, the pressure to overcome the negative effects of that instability should lead HR professionals to increase their focus on retaining their workers while motivating them to make even greater contributions. That naturally translates into a need to revitalize and update the design of employee engagement strategies, which are too often left untouched to “operate as usual.”

Understanding employee engagement and the associated trends

Despite its status as a major consideration in people management across industries and the globe, the very definition of employee engagement can vary widely, with one study finding more than 50 proposed and used definitions. Despite that, upon reviewing many of these definitions, a consensus seems to emerge: it represents a state of mind, a blend of perceptions and resulting emotions that propel people towards (or away from) maximizing their contributions to an organization. As a result, employee engagement strategies are created to meet their needs through their work and associated relationships, which serve as motivators for effort, focus, and alignment with the organization’s values, culture, and objectives.

Gallup has long been a leader in measuring, analyzing, tracking, and reporting on engagement trends. Its most recent report found that the U.S. employee engagement rate averages 31%, remaining stagnant, with substantial declines among those in early career employees. Perhaps worse, 17% of all workers report being actively disengaged.

At the same time, Qualtrics reports 73% engagement in the U.S. (68% globally). It appears that the difference is due to its use of a much broader (25-question) set of survey questions related to the employee experience (EX), compared to Gallup’s statistically derived “Q12” (twelve) questions, which are more focused and have been used with millions of workers over many years.

Identifying what drives engagement levels

Given the variety of definitions and employment-related factors used by different vendors and their customers, it is essential that every company review the options and determine which definition best aligns with its mission, values, and operating model. That said, organizational research has identified several key factors that motivate employees to maximize their contributions to an organization. Those include, but are not limited to:

• Purpose and meaning: Performing work that feels meaningful and mission-driven by virtue of its alignment with the company’s objectives, unit goals, or customer value proposition, as well as with the needs of the community or the world at large. It provides context and answers to the questions many unhappy employees ask: “What am I doing here?” and “Why am I still working here?” 
• Clear expectations and access to resources: Understanding what is expected and having the tools, information, and resources to successfully achieve that are highly motivating. Employees want to succeed, and the ability to see such a path is an employee engagement strategy that makes an impact.
• Quality management and coworkers: Gallup has found that 70% of engagement stems from the direct manager’s support, coaching, and guidance. It has also been found that feeling supported and accepted by teammates is a crucial element of high engagement. Being treated with respect and dignity, and with psychological safety, are significant drivers of employee engagement and a crucial element for measurement and tracking. 
• Skills and career development: Providing access, support, and opportunities to develop skills relevant to job and career interests is a well-established approach to employee engagement; they drive 46% higher engagement. 57% of companies cite career development, growth, and mobility as key drivers of their formal engagement strategies. Furthermore, clear career paths make employees 2.7X more likely to be engaged. 
• Autonomy and empowerment: The extent to which an employee feels they have, and can exert, control over what they do and how they do it creates a sense of being trusted by their management. Being able to make decisions about priorities and methods for performing their tasks allows them “freedom within a framework” constrained only by agreed-upon standards for quality, timing, volume, and format.
• Recognition and rewards: Recognition research reported by the National Institutes of Health found strong statistical evidence of recognition's impact on employee engagement. Gallup found that workers who receive regular (and authentic) recognition are 5X more connected to the company culture and 4X more likely to promote it to others. Others have found that employees are 91% more willing to exert extra effort, 12X more likely to find their work meaningful, 3X more engaged, 2.6X more productive, and 19X more trusting of their leader.
• Trust in leadership: The more employees trust their managers and leaders—believing their communications, trusting their promises, and having confidence in their guidance and direction—the higher their engagement. Leadership trust has been demonstrated to be a foundation of employee motivation and retention.
  
  

Recognizing the benefits of updating employee engagement strategies

Building a business case for developing and deploying employee engagement approaches is made easier by reviewing dozens of industry studies that examine the link between engagement strategies and business, financial, operational, or talent outcomes. The value proposition is well-established, with comparisons of outcomes between high- and low-engagement organizations.

Gallup has conducted the most comprehensive body of studies across industries, company size/scale, and geographic regions. Its data offer compelling evidence of the value of addressing engagement on an ongoing basis. Its analysis has found that high engagement can directly influence improvements in business, operational, and financial outcomes, including: 

• 23% higher profitability
• 14% higher productivity
• 10% higher customer loyalty 
• 18% higher sales productivity

It also drives the achievement of improved talent outcomes: 

• 78% less absenteeism
• 51% less turnover
• 63% fewer safety incidents 
• 32% fewer quality defects
• 28% less shrinkage (theft)

Furthermore, deploying new and updated employee engagement approaches can drive more employees to exhibit high-value behaviors such as:

• Taking initiative and going beyond what is expected of them
• Staying with their company longer
• Delivering better customer outcomes
• Collaborating more effectively with teammates and cross-functional peers
• Showing greater resilience during times of market and company stress or change

They have also been reported by Qualtrics and others to be significantly more likely to be vocal brand and company advocates or “net promoters.”

Issues with the measurement and tracking of employee engagement approaches

Measuring engagement and the effects of employee engagement strategies consistently and reliably can be challenging, given the previous point about widely varying definitions. A consistent definition and set of questions should be used to reliably compare results and review trends across an organization and its various units and functions over time.

Overuse of, and over-reliance on, surveys

The concept of survey fatigue is real, but takes a number of forms, each of which requires attention and must be addressed in the design of employee engagement strategies. First is the overly lengthy survey, designed to capture feedback on too many factors related to policy and benefits satisfaction, managerial effectiveness, agreement with top leadership communications, comfort and alignment with company direction, level of stress and well-being, among others. Second is fatigue stemming from post-survey inaction, where employees disengage when their feedback does not lead to tangible changes. Third is related to an over-frequent cadence, where mini-surveys are encountered multiple times per quarter or month across multiple venues (embedded in work or HR systems' process flows and sent via email or text), with multiple reminders.

Unclear purpose and use of the output

Too often, companies fail to articulate (and revisit) the purpose of their measurement, which makes evaluating employee engagement strategies difficult without a clear rationale that defines the objectives and targeted outcomes of administering them. For example, is the purpose(s) to drive organizational performance? Evaluate managerial behavior and effectiveness? Is it being assessed for use as a “hammer”/penalty or as a managerial development tool? Is it designed for use as a feedback and development tool—with or without consequences (advancement, merit pay)? Alternatively, is it designed to clarify opportunities for improvement in job design and the work environment? In employee learning and development? In team dynamics and structure?

Limited view of what motivates employees

Many employee engagement approaches are based on definitions that limit understanding of what drives employees to exceed requirements, remain loyal and committed to the company and its mission, and strive to develop their capabilities and advance. Given Gallup’s identification of the extent to which direct supervisors inspire their teams’ engagement levels, and the many other factors that influence outcomes such as performance (e.g., process design and resources), productivity (e.g., quality of tools and systems), and turnover (e.g., pay, recognition, development, commuting), it is often overemphasized. For example, as Qualtrics reports, engaged employees might still have a poor employee experience (EX); other considerations require attention.

Measurement can be fickle, time-bound, and subject to dramatic shifts

The evaluation of employee engagement strategies is too often administered at set points in time (annually, quarterly, monthly) and does not reflect the potential negative (or positive) impacts of significant market trends or corporate events. Consider how any of the following occurrences might change how employees feel about their work, relationship with the organization, or contributions to its mission:

• The rise and fall of company, business unit, or function performance and outcomes.
• Leadership or direct manager changes.
• Shifts in strategic direction or market emphasis.
• Changes in individual roles, job standards, and requirements.
• Teammates’ transfers in/out, new hires.
• Modifications in total reward (e.g., pay, merit, or bonus levels) budgets.
• Corporate values or culture drift.

Adding to these is a natural tendency in individuals to mature and grow, which can shift their perspectives on what motivates and excites them about their work.

Leading practices in designing employee engagement strategies

1. Create an agile strategy 

Design or redesign employee engagement methods with a clear statement of purpose and a clear value to be derived from those activities. Create governance processes that continuously monitor their impact and effectiveness, particularly when market, financial, operational, and talent trends shift. Review the process, data, and employee feedback to assess for fatigue, declines in participation rates, or indicators that the measurement is not accurately reflecting survey responses.

2. Engage leadership 

Work to make top leadership the ultimate owners of the employee engagement strategies by building and presenting a business case, articulating a strategic value proposition, chartering a formal governance council, and creating a formal communications and training regimen for and with them. Engage them as sponsors and champions, and arm them with succinct, well-designed dashboards that help them pinpoint weaknesses and opportunities within their own organizations.

3. Broaden and formalize an employee listening capability

Establish employee listening mechanisms that incorporate, but do not rely upon, traditional engagement surveys as the sole “source of truth.” Create governance that reviews and schedules the administration of all employee surveys, a sequence and cadence of continuous surveying that hits a representative sample of (for example) 1/12th of the entire population per month, with shorter engagement surveys that provide a useful ongoing view that is more likely to reveal reactions to external and internal changes. In smaller organizations, create multi-month (e.g., quarterly) reports that avoid identifying individual employees while allowing drill-downs into manager-level trends. 

To reduce reliance on two-dimensional insights, leverage employee focus groups to follow up on survey results, generate deeper insights, and gather more targeted information on potential improvements. These small-group sessions are more personal and high-touch, making employee feedback a more meaningful cultural touchstone and helping connect workers to the organization. Consider different formats, including senior leadership-led skip-level sessions, design thinking, and process improvement approaches, to improve the employee experience by directly engaging employees to call out and resolve their own pain points. Together, these employee engagement approaches have been shown to significantly improve the most valued talent outcomes.

4. Collect quantitative behavioral and outcome data

Enhancing employee listening data to make a more comprehensive measurement of engagement involves using “hard” data to augment that collected through survey and focus group methods. An HR and line manager team can be tasked with identifying behaviors or activities that serve as proxies for high vs. low engagement. Reconsider that engagement is defined as a mindset or perceptions that propel people towards (or away from) maximizing their contributions to an organization. A useful brainstorming exercise is to ask the team how they know, or can observe, when employees are highly engaged, such as when they are willing to contribute their discretionary effort and time, collaborating with peers on a rapid-turnaround project (and measured by working outside of scheduled hours for a brief period of time), or when an employee brings their peers together for a lunchtime lunch-and-learn session.

Data that is often readily available from HR systems and can serve as secondary indicators to analyze alongside survey data includes learning activity, job mobility/transfer rates, promotion rates, recognition and reward frequencies, coaching and guidance (manager check-in) frequency, and quality. On their own, they are less valuable, but when combined with high, medium, or low engagement scores, they can help clarify what is driving engagement and what might be detracting from it.

5. Focus on managerial effectiveness

The use of employee engagement approaches to evaluate and improve managerial effectiveness is essential, particularly given Gallup’s research findings. Much of the engagement appears to be a localized phenomenon, driven by strong managerial relationships based on an understanding of each employee's skills, proficiency levels, interests, and aspirations. Effective managers then use that to tailor feedback, work assignments, and development guidance to the individual. Holding managers accountable for their teams' engagement is essential, but must always be tempered by the knowledge that scores can be affected by external events and trends, and be combined with other performance indicators related to team performance. Training managers to manage effectively and, as needed, to respond to and improve their scores is a must-do.

6. Improve job design and meaning

Research has demonstrated the linkages between worker engagement, job design, and meaningfulness as far back as the 1970’s. For example, a CIPD study found that the extent to which one’s job is stimulating, interesting, and novel drives the level of enthusiasm and effort expended. Similarly, the amount of autonomy, or decision-making an employee is allowed (e.g., over their work priorities and methods employed), makes them twice (1.9X) as likely to do more than required, and 2X more likely to suggest innovative improvements. Finally, the more meaningful they perceive their work to be, the more engaged they become. This is created by helping them understand the extent to which their efforts, task performance, and work outcomes contribute to larger team, business, or customer results.

7. Assess employee engagement wisely and succinctly

Avoiding the different types of survey fatigue should represent a goal, much like Lean, Agile, and other process improvement methodologies emphasize. Start by using advanced statistical methods (e.g., regression tests) to identify a smaller set of questions that together predict engagement levels and critical business, operational, and talent outcomes. Shorter surveys can generate larger response rates. 

Next, give every employee a voice and an opportunity to be heard, but not all at once; choose representative samples of employees from across the organization and send them each links only once or twice per year. Thirdly, always evaluate trends over time for significant changes, then follow up to identify the root causes of those improvements or declines. Fourth, overlay any major external trends or internal events to provide context and a meaningful narrative for the executive governance group and their managers. 

Finally, consider conducting more advanced statistical analyses to evaluate the impact of your employee engagement strategies on business, financial, operational, and talent outcomes achieved by the organization. In that way, a solid business case for focusing on employee engagement approaches can be established in the minds of leaders and managers, and more targeted tactics can be designed to improve the organization and the work lives of all its employees.

Relevant Practices & Tools

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