Scancapture's research found that just one third of the UK workforce is engaged. MD and Employee Engagement specialist, Steve Smith, shares advice on getting your workforce on board for the long haul.
Taking care of employees is taking care of business
Steve Smith, the Managing Director of Scancapture, has been called a guru in the field of employee engagement though he jokingly prefers the word ‘Ninja’, or better still, ‘Jedi’ if such terminology must be used, in his opinion.
Smith uses his skills in psychology combined with his own years of work experience and a healthy common-sense approach, to help organisations improve their performance by increasing the involvement and participation of their workforce. But far from the notion of employee engagement being seen in the past as what Smith described as a "fluffy" concept, Scancapture has 1.6 million surveys in 14 years under its belt to prove his claim that when it’s applied, employee engagement as a business tool works one hundred per cent of the time. In other words, it is measurable in that it can be correlated with individual and company performance.
Smith, as a key expert on the review panel for the White Papers and Thought Leadership Papers Committee, says that as a tool for business success, employee engagement is also at the heart of the UK government’s flagship ‘Engage for Success’ initiative. "It gave the idea credibility when the government says if it’s done right, it works one hundred per cent of the time," he says. "So lots and lots of research happened to find out what the good businesses were doing as opposed to the bad businesses."
“An engaged workforce will turn a good business into a great business," he adds. "Engagement can also mean the difference between company survival or not."
Food for thought
Before outlining his model for business success, a number of Scancapture's survey statistics offer food for thought. The research has found that:
- The UK has an employee engagement deficit. Surveys indicate that only around one third of UK workers say they are engaged.
- Organisations with high employee engagement levels outperform their low engagement counterparts in total shareholder returns and higher annual net income. The top 25% had twice the annual net income compared to the lowest quartile.
- 85% of the world’s most admired companies believe that efforts to engage employees have reduced employee performance problems.
- 70% of the more engaged have a good understanding of customer needs against only 17% of the disengaged.
- The annual cost to the UK economy of sickness absence is over £17 billion according to the CBI. The same organisation found that engaged employees take an average of 2.69 days sick a year; the disengaged take 6.19 days.
- Replacing employees who leave can cost up to 150% of the departing employee’s salary. Highly engaged organisations have the potential to reduce staff turnover by 87%; the disengaged are four times more likely to leave the organisation than the average employee.
- Gallup reports that those organisations with engagement in the bottom quartile averaged 62% more accidents than those in the top quartile.
The most telling statistic Smith has uncovered? "If you can engage people more by just 2.5 per cent over a year, on average it will put 4 per cent on your bottom line," he says. "That 2.5 per cent isn’t easy. Anyone who says employee engagement is easy is lying."
Giving that bit extra
Drawing on his own experience, Smith explains that when he left school and joined the world of banking, “I came across some good managers and some ‘horrendous’ ones. And, the bottom line of employee engagement is all about the connection that an employee feels towards their employer.”
"Even in my teenage years I understood that if you’re not treated right at work and you’re not given the opportunities or you’re not respected, if you’re treated wrongly, you’re not going to give your best," he says. But when you have a good manager who encourages people and supports them, "you give that extra. You came in earlier and went home later and you didn’t have a full hour for your lunch," Smith adds.
A later position with a survey company and the idea to combine this workforce philosophy with what he calls "the survey bug" prompted him to set up Scancapture, believing that if the right questions are asked in the right way, employees would give the answers needed so that changes could be made to help the business succeed.
"The evidence is overwhelming," Smith adds. “In the past 14 years, Scancapture has carried out 1.6 million surveys imparting a lot of data. They have found that the most engaged employees work for the most successful businesses and the least successful people, according to the database, work for the least successful businesses, and that’s no coincidence".
The four enablers of engagement
According to Smith, all of the best, leading or most productive businesses and those with the best reputations did four things that all the others didn’t.
He says, "This model focuses on four enablers of engagement that have proved to be useful lenses which can help organisations assess the effectiveness of their approaches”.
1. Visible, empowering leadership providing a strong strategic narrative about the organisation, where it’s come from and where it’s going.
"Most businesses know where they are but lots have no idea where they are going. Some don’t even know the plan for next week".
2. Engaging managers who focus their people and give them scope, treat their people as individuals and coach and stretch their people.
"Good managers care. They are engaged themselves so they can engage other people".
3. There is an employee voice throughout the organisation for reinforcing and challenging views.
"It’s a way for people to let management know what they’re thinking. Talk to people. Don’t be frightened of speaking up. Only four out of ten people feel safe in speaking up."
4. There is organisational integrity – the values on the wall are reflected in day-to-day behaviours.
"Sometimes the gap between what we say and what we do is so far apart, it creates mistrust. The values of the business must be communicated really well so that people understand it. You should recruit to the values; trust, honesty, excellence, respect and engagement. These are our values. You've got to be proud of what you do, respect the people you work with. Engagement means getting involved."
From employee satisfaction to employee engagement... and disengagement
Smith spoke to us about a shift happening between 2010 and 2011. "One of the worst things that you can have as a manager or a business owner is satisfied employees who underperform and there are businesses that have that. “To me, that’s not an engaged workforce - some of the most engaged people I have met do boring jobs.”
Smith is a firm believer that as work takes up so much of a person’s life, they might as well enjoy it.
Looking to one of Scancapture's stats, that only one third of UK workforce is engaged, Smith concedes that engaging the other two thirds is a monumental challenge, and on top of that, there are just less than one in five, or 18% of employees, who are ‘actively disengaged’. "If you’ve got five people in a rowing boat then one of them it trying to sink your boat by drilling holes in the bottom, or is throwing the anchor overboard to stop things from moving... I feel that those 18 per cent need to leave and do something else that they enjoy doing," he says.
In many of these cases, Smith adds, the individuals are likely disengaged from life, which is reflected in their attitudes and behaviours. The situation is made worse if one of those disengaged individuals is a manager because "if you’ve got a disengaged manager, having a disengaged team is more likely”. You then need an upfront conversation to say ‘you’re not doing your best here, what’s the problem? How can I support you to be better at your job?’ That’s what an appraisal should be, not ‘justify your existence in this company’. If people aren’t happy in their job, they need to do something about it, so let’s help them find another career."
The rules of engagement
Scancapture's surveys measure employee engagement on three levels but Smith says it's only when all three elements are present that engagement is likely to result in improved productivity:
- Emotional engagement – being very emotionally involved in one’s work
- Cognitive engagement – focusing very hard whilst at work
- Physical engagement – being willing to ‘go the extra mile’ for your employer
"There is a real direct correlation between engaged employees and businesses being successful," Smith tells us. "The evidence shows that if you engage more with your people, treat them better, they’ll treat you better. Communicate well with them, allow them to have a voice, recognise when they’ve done a great job. It’s all people want."
He continues to say that pay is hardly ever a factor. If a company moves to correct any existing pay discrepancies in an effort to re-engage an employee, it doesn't work because all the employee sees in that situation, is a restoration of fairness. This does not result necessarily in more engagement. "It’s not about pay, it’s about paying people more attention, not paying them more money," Smith says.
Smith believes that business leaders need to realise that people are the most important thing in their business. It’s not the offices, it's not the product. And, it's also not about giving employees everything they ask for. Some businesses worry about being asked for more money, time off or flexible hours thinking staff are “going to want, want, want".
Smith says that doesn’t happen. The biggest reason why people dislike working for someone lies in communication. "It’s either wrong communication or lack of communication," he says.
He says it's no good having a really, really good customer service team if the people in the customer service team hate working for the business because they are simply not going to give their best. Some companies, he adds, put a lot of money into customer service strategies based on the notion that the customer comes first.
"I don’t rate that. I think the customer comes third. First comes yourself. You have to get yourself right before anything else. Once you get yourself right, you’ve got to get your team right, then the customer will just be looked after".
One of the ways Scancapture encourages business leaders to take employee engagement seriously is to present the evidence. He stresses that it's key to demonstrate that a competitor is producing more with fewer staff because they have the right staff, doing the right things, in the right way. But the buy-in to engagement has to come from the top.
"It’s going to make a difference to your business, to your bottom line. People will stop leaving. You’ll get fewer disciplinaries, you’ll get fewer grievances, you’ll get people taking less time off sick. All of these things need to be conveyed to the leaders of that business," he says.
Usually Scancapture works with HR teams because very often they "get it" because on a fundamental level, it’s about the people and not really about the business. If an organisation wants to engage their people, that should be the reason, per se. Once that is accomplished, the business will take care of itself because the result of an engaged workforce is an improvement in productivity and in turn, desired outcomes.
"Some chief executives don’t get that. They want to know how their business will improve but that is the result, not the purpose.”
Inside the company, the Scancapture team meets with a cross section of employees, talk to them about the business and observe its culture, starting from the first moment at the reception desk.
"We develop a survey with the company that is aligned to their values and business objectives. There is no point me asking a question about pay if there’s nothing you can do about pay. We only ask questions that you can do something about," he adds.
Although employee engagement is continuous process, Smith points out that he often sees a turnaround in days, especially when there are changes that can be made immediately. They might not be huge issues but he said the message it sends to employees is that they've been listened to. "They’re going to work harder because someone listened to them," he said.
“A lot of the companies that don’t engage well with people are frightened to do surveys because they really don’t what to hear what it’s going to say. Sometimes it takes some bottle to do a survey to really find out what’s going on," he adds.
"There is still a lot of command and control. A lot about business performance. If you engage with your people it works every time. More and more people are getting it but there is still a fear that someone will come and tell them what the problems are and they know already but don’t know how to fix them."
- Choose the right engagement champions: To make sure engagement captures both hearts and minds, activate your ‘early adopters’ who are passionate about not only the concept, but also about driving change and influencing others to communicate.
- Focus on a challenging goal: Choose a goal and date as a target 2-3 years in the future that is both stretching and will make a significant impact on the business, and start rallying your senior leaders to make it happen.
- Energize your HR function: You can’t rely on HR to “force” engagement on people or the company, but as a strategic business function they must be accountable for ensuring it exists and is taken seriously.
- Hold managers accountable: Focus on changing behaviours of managers to report results on actions they’ve taken to deliver engagement strategies in their teams.
- Celebrate and replicate those who can engage: Find formal and informal ways to recognize and reward your managers who are great at engagement. Some managers will find this a natural way of working and not realise they’re onto something that others should be learning from as best practice.
- Recruit and promote for engagement: Ensure you are putting people into management positions who will be successful at engaging their teams.
- Develop for engagement: Most companies train and develop managers in skills such as coaching, leadership and strategic thinking. Make sure engagement is also on the development agenda.
- Remove systemic barriers: Key themes such as communication and trust, pay and benefits, company values and culture, and lack of change management must be identified and addressed by the senior leadership team.
- Focus on chronic under-performers: Unfortunately there are managers who won’t or can’t engage no matter how much training and communication you provide. If a manager’s team scores low on a survey it’s time to get involved
- Its’ good to talk: Your company has real people hungry for connections that the workplace can fulfil. You want them to be inspired, motivated and engaged. Well, so do they!
- Track your progress, celebrate your success and learn from your challenges: If you don’t measure it, you can’t manage it. This applies as much to employee engagement as to anything else in your company.
- Give people some freedom: Allow your employees to perform their daily tasks. Each person is free to do whatever they want, whenever they want as long as the work gets done and company rules are respected.
- A “thank you” and a smile costs nothing: Catch people doing things right instead of catching people doing things wrong. Praise people by saying “thank you” and give them a smile. Tell them what they didright and encourage them to do more of the same. Do this at least five times every day.
- Show your employees that you care for them: Spend a minute to have a chat; ask them how their family is doing, how they are doing and ask if they are happy with their work. People will feel valued.
- Use three magic phrases: “I don’t know”, “I was wrong” and “I’m sorry” Managers who won’t admit a lack of knowledge, won’t come clean about mistakes or apologize when called for will lose respect and engagement runs out the door right behind it.
- Allow everyone to be human: Your employees are human beings, not human resources. Give compliments. Have conversations.
- Changing the face of work
As a testament to the increasing recognition of the value of an engaged workforce, Smith explains that Scancapture has grown every year "since day one". The surveys the company does, he adds, are not expensive but are an investment given that the benefits for an organisation are huge.
More than that, he would like to see a world where everyone wakes up on a Monday morning "and they’re inspired and excited and motivated to go into work". And his ambition – to make the north west of England the best place in the world to work - has led to the creation of the North West Employee Engagement Group (NWEEG) in 2014 which Smith, as founder, hosts and facilitates bi-monthly events for over 370 HR professionals and business leaders from some of the region's leading businesses.
"Between them they employ more than 300,000 people, so we’re able to make a difference," he says. "It’s not about bums on seats, it’s about the right bums on the right seats."
Scancapture can also count as clients the John Lewis Partnership, Sofology, The British Museum, The National Theatre, First Choice Holidays and Bensons for Beds, and is currently engaged in a new project with one of the biggest UK retailers employing over 100,000 people. "So that’s going to be a heck of a challenge," Smith says.