The Stunning Stats Behind Employee Engagement

(This article was originally published in The Edge of Service™ newsletter, May 2016)

My 13-year-old daughter, Grace, bought a camera at Costco last year. She had saved for many months, compared alternatives, and settled on an all-inclusive package that featured lenses, memory and a carrying case.

She began using the camera with much excitement, and some pictures were great—but others were blurry or faded. I assumed it was a matter of learning the equipment, but over time, her enthusiasm began to wane and the camera stayed on a shelf. One weekend, some out-of-town family stayed with us, including Kate, who is a professional photographer. “There’s something wrong with the camera,” she concluded. “Maybe the chipset or a lens fitting.”

We took it back to Costco—long past the 90-day return threshold—and Grace explained to the person behind the service counter what happened. With a manager’s okay, they agreed to an immediate replacement. Then the real magic happened. An employee in the camera area named Devon, who was just finishing her shift, stayed an extra 30+ minutes to help Grace unpack the new camera, ensure that it worked, and go over basic features. “You will LOVE this camera!” she said. “I have the same model.”

The thing that struck me is that this was just a transaction in a “big box” store—nothing special on a P&L. Yet, it could have lifelong impact on a young person who was giving up on an interest.

I believe there are three categories of statistics any leader needs to know about employee engagement:

First, employee engagement is strongly tied to customer experience. If you’re into statistical correlations, you’ll get a kick out of this: the ISS Group found that frontline service employee engagement correlates highly with customer experience, specifically at: r = .55. By way of comparison, this is higher than:

•    Increasing age and declining speed of information processing in adults (r = .52)
•    Weight and height of US adults (r = .44)
•    Past behavior as a predictor of future behavior (r = .39)
•    General validity of screening procedures for selecting job personnel (r = .27)

Second, there is a powerful connection between employee engagement and business results. Gallup concludes that companies with highly engaged workforces outperform their peers by 147% in earnings per share.

And research conducted by Aon Hewitt tells the same story, finding that companies in the top quartile for engagement enjoy a 4% increase in sales growth compared with an average company, while those in the bottom quartile see sales decrease by 1%. Further, those in the top quartile see a 2% increase in operating margin, versus a 3% decrease for bottom-quartile companies.

Third, employee engagement is, unfortunately, not common. The world has a crisis of engagement—one with serious and potentially long-lasting repercussions for the global economy,” concludes Gallup, who puts the number of employees worldwide who are NOT engaged at a whopping 87% (the number is a still-high 70% in the United States). There’s something lost in many of today’s organizations and institutions—but I believe it can be regained. (For a starting place to great examples, see this year’s ICMI Global Contact Center Awards winners.)

Jack Welsh, the respected former CEO of GE (whose methods weren’t always universally praised for their impact on employees), concluded: “There are only three measurements that tell you nearly everything you need to know about your organization’s overall performance: employee engagement, customer satisfaction, and cash flow. It goes without saying that no company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it.”

Of course, contrived efforts to achieve employee engagement can be dangerous, creating cynicism and turnover among your best employees. But suffice it to say, there’s a lot of potential to meet customer expectations, and drive positive customer experiences and business outcomes through authentic steps that engage employees.

Our economy could use it. And you might even impact the life of a young customer.