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Engaged employees are pivotal to an organization’s financial success, company culture, brand experience and ability to retain top talent. But according to Gallup’s most recent polls, only 31.5 percent of U.S. employees are actively engaged at work, and disengaged employees currently outnumber actively engaged employees 2 to 1.
In a 2012 study, research firm Bersin by Deloitte found companies spend over $720 million each year on employee engagement. Only half of the companies that expressed an interest in investing in employee engagement actually had, and Bersin estimated the sum has the potential to grow to over $1.5 billion in subsequent years.
That’s because truly engaged employees pay off. When Gallup surveyed 1.4 million employees in 2012, it found that companies with engaged staff enjoyed a 10 percent increase in customer ratings, 22 percent increase in profitability and 21 percent increase in productivity over their less engaged counterparts. They also saw dramatic decreases in turnover, absenteeism, safety incidents and quality defects.
Managers and executives have consistently been the most engaged segment of the U.S. workforce and have the most influence on the overall engagement level of a company. And research shows there’s a whole lot of validity to the old adage that employees don’t leave a company, they leave a manager. In a survey of 7,200 adults, Gallup found that half had left a job “to get away from their manager.” Seventy percent of the employees who lack confidence in their managers and senior leadership fall into the “not fully engaged” category. Clearly, managers are pivotal to employee engagement.
A study conducted by the leadership training and research firm Leadership IQ reveals a disconnect between engagement and performance. In 42 percent of companies, low-performing employees report being more engaged and happier at work than their higher-performing colleagues. That’s because managers tend to ask less of them, which means they end up with less responsibility and stress. Dedicated employees tend to work longer, more stressful hours — often correcting the work of low-performing colleagues. This cycle causes high-performers to lose confidence in their organization.
This is especially true for millennials, now accounting for more than one out of every three U.S. workers: They prioritize company culture and purpose-driven work. Twenty-eight percent of the estimated 53.5 million millennials in the workforce are already in management positions, and two-thirds report management as a career goal. But according to Gallup, millennials are the least-engaged generation at work.
Gift cards and weekend retreats aren’t a sustainable solution to our disengaged workforce or the negative reinforcing cycles tied to institutionalized dysfunction. Meaningful work, communication between employees and managers, and accountability that extends to management are the real keys to engagement. When employees and managers are held to clear standards and rewarded based on merit, companies are able to break the disengagement cycle for high-performing employees.
To reap the benefits of an engaged workforce, companies need to solve the underlying issues unique to their organization. Solving our national engagement crisis necessitates addressing the issues that disengage millennials — before they become the majority of our management force.