A recent international study showed that only two out of 10 employees are actually engaged in the job they do, and maybe more worrying the same number of staff are actually disengaged at work.
The survey shows that engagement scores decline as employee tenure increases. Employees with the deepest knowledge of the company and the most experience are typically the least engaged.
Scores also decline at the lowest levels of the organisation, suggesting that senior executive teams likely underestimate the discontent on the front lines. Engagement levels are lowest in sales and service functions, where most interaction with customers occurs.
It’s actually the people that make the big difference in creating the optimal customer experience (CeX).
Despite the challenges most organisations are facing to become customer centric, some companies out there succeed better than others.
What is the formula for success?
An engaged employee is not only a ‘happy’ staff member, who is motivated and satisfied. An engaged member of staff also needs to show other qualities: affiliation and effort.
Affiliation shows how connected the employee is to the company, while effort is defined as willingness or ability to ‘go the extra mile’ for the company.
Happy, motivated and satisfied staff don’t do anything wrong and they perform at a satisfactory level, but they’re not engaged. While these employees are often driven by personal motives like remuneration, personal job satisfaction and status, an engaged employee will work towards bringing the business forward to the next level asking: “What’s in it for us?”
Companies where more than 50 per cent of the employees are engaged have 80 per cent returning customers
Why this sudden focus on engaged employees? Because higher employee engagement will influence the CeX and drive higher customer loyalty. There is a reasonable amount of research and empirical studies that show a link between engaged employees and happy customers.
Companies where more than 50 per cent of the employees are engaged have 80 per cent returning customers and are more than nine times likely to have satisfied and loyal customers.
Engaged staff are also more loyal and higher loyalty leads to lower costs. Overall if a company can reduce involuntary employee turnover, then costs and productivity will improve. Businesses with more engaged employees have 51 per cent higher productivity, and the engaged staff outperform disengaged staff by 20-28 per cent.
Back in the 1990s, Harvard Business School presented the Service Profit Chain showing the link between employees, customers and profit. The model is still relevant but someone has re-named it the Engagement-Profit Chain: “Engaged employees lead to higher service, quality, and productivity, which leads to higher customer satisfaction and loyalty, which leads to increased sales (repeat business and referrals), which leads to higher levels of profit, which leads to higher shareholder returns (i.e. stock price).”
To create and develop engaged employees and turn them into company ‘ambassadors’ will be a major task for a customer focused company. Even at the recruitment phase, employees should be identified as potentially highly engaged and loyal. Many leaders of successful customer centric companies state that part of their success is that they “Hire people for attitude - and train them for skills”
Companies that have succeeded in developing highly engaged and loyal staff followed much the same recipe: “Hire the right employees in the first place, and then build a climate of trust (that works both ways). Have a structured continuous training programme and provide frequent evaluations and reviews. Make sure each employee has a career path, is recognised and rewarded, and is asked and listened to. Share information and debrief regularly, and remember - have fun”.
Be aware that emotional factors drive employee engagement more than functional ones. Money is not the critical factor; things like culture, trust, values, honesty, personal development and autonomy are far more important. Most of all, employees need a sense of purpose and to feel that they can trust the leaders to drive the company forward.
The good news for customer centric organisations it that they get more engaged employees than company-centric ones. It seems that customer focus can help align priorities and actions, and drive engagement.
As former Campbell’s Soup CEO Doug Conant once said, “To win in the marketplace you must first win in the workplace.”
(Sources: Harvard Business School, Gallup, Forrester Research, Griffin & Lowenstein)
Paul Aas is the manager of Loyalty Group Malta Ltd.