Employee Engagement: a simple guide

So, what happens if your staff are unhappy and uninterested? And what can you do to put a smile back on their faces and a spring in the company's step?

What is employee engagement?

The Chartered Institute of Personnel and Development (CIPD) defines employee engagement as:

Intellectual engagement – thinking hard about the job and how to do it better
Affective engagement – feeling positively about doing a good job
Social engagement – actively taking opportunities to discuss work-related improvements with others at work

In a nutshell, it all boils down to ensuring your staff are happy and feel valued at work.

According to global research firm ORC International¹, a little over half (58%) of the UK’s employees feel engaged at work – narrowly beating known notorious workhorse countries, Japan and Hong Kong.

The survey also revealed that a fifth of UK employees would not recommend their organisation as a place to work or feel it motivates them to contribute more than normally required.

It seems then that fewer people are inclined to do any more than the bare minimum needed to do their day-to-day duties. But is this something companies really need to worry about? After all, aren't there plenty of people out there desperate for a job if you lose a disgruntled employee? Well, putting aside the fact (and it's a very big fact) that it could cost on average £30,614 to replace an employee earning £25,000 or more², unhappy and disengaged employees can be less effective at their job, less motivated and more likely to go off sick from work.

The result is a greater cost to the business, extra pressure on colleagues and a lowering of morale. And all this ends up on your bottom line.

Again, according to the ORC's survey, employees in less senior positions are uninspired, unhappy with the opportunities to share ideas or opinions, or even feel their opinion counts.

Putting some overall figures on it, only 49% of non-managers were happy they could share ideas or opinions, 48% felt their opinion was valued, while just 38% were excited or inspired by their company’s communications. Tellingly, this last stat only rose to a little over half (52%) even among line managers.

It's also possible to inadvertently disengage employees when you're trying to do the polar opposite, so make sure you think through your employee engagement ideas before rolling them out!

The ORC’s findings suggest that the biggest drivers of engagement in the UK are feeling valued and a confidence in the leadership/management team, along with having a voice in the organisation.

Acas lists the four key ingredients to a happier, more motivated and more productive workforce as:

Leaders with a vision who value how individuals contribute
Line managers who empower rather than control their staff
Values that are lived and not just spoken, leading to a sense of trust and integrity
Employees who have the chance to voice their views and concerns

To get the best out of their staff, employers need to encourage an atmosphere that genuinely wants to take into account, and act on, employees' suggestions or comments. So let's take a look at some of the possible areas to consider when creating an employee engagement strategy:

Man-management

To tackle the apparent breakdown of some staff/management relationships, training newly-appointed managers in man-management techniques can be one way to equip someone stepping into the role. Research³ reveals four key management behaviours:

Being responsible and showing respect
Managing and communicating workloads
Treating people like individuals within the team
Offering support with managing difficult situations

Ways of setting up good communication could include staff surveys, giving workers the opportunity to anonymously voice concerns about their jobs and submit their suggestions for possible improvements the company could make to the benefit of the company, its staff and its customers.

Remember, a business is only as good as its people. Happy staff = a more profitable and successful business.

Wellbeing

On a lighter note, the CIPD found that nearly half of respondents said their organisation’s focus on wellbeing had increased compared with the previous year, with just 3% reporting a decrease⁴. The most common reason given for this increase was “we want our organisation to be a great place to work.”

And the healthier staff are, the higher their engagement levels.

Business benefits

As well as putting in place practical and inclusive ways of working, companies can demonstrate that they value their staff by offering business benefits.

Having the right mix of health and wellbeing employee benefits and perks can have a massive effect on employee engagement, which could lead to greater staff retention and recruitment.

Engaging your employees doesn't have to cost a fortune. Mixing up softer benefits and perks that appeal to the ‘here and now' with protection-based employee benefits that are designed to look after employees in the longer-term can be a good combination.

Telling staff about your employee benefits

Ridiculous as it may sound, despite the time and money spent in providing the right mix of employee benefits, some companies consider it ‘job done' and don't bother to tell their staff about what's available.

As well as the waste of resources, research by Cass Business School⁵ showed that staff in workplaces that offer benefits, but who are not aware of their availability, are less likely to:

share the values of, and feel loyal to, their company
be proud to tell people who they work for
have a positive attitude than those working in companies that do communicate these benefits

So it's really important to tell your staff about the benefits you offer. Cass’ study also suggests (contrary to popular belief), if your employees are aware of benefits – such as Private Medical Insurance or Income Protection – they are unlikely to take more time off sick.

Instead, communicating about a wide range of employee benefits can build employee engagement and a more loyal workforce that takes less time off sick.

Google is well known for its staff engagement strategy, but if you're a little unsure about replacing your lifts with slides between floors or installing a vintage Pacman game, there are plenty of other things you can do.

Business psychology company Robertson Cooper gives staff an extra day's leave called a "happiness day" to spend doing whatever they want.
Hosting theme days is a great way to put a smile on workers' faces. After all, who wouldn't laugh out loud at the sight of their boss in fancy dress? You could be tame with themes such as ‘ugliest tie' or go all out and have favourite superhero and cartoon character days.
Office fruit baskets are available for a relatively low cost (small boxes cost around £10-15) and have the added bonus of ensuring your workers get some of their five a day, keeping them fighting fit.
Hold some company or team meetings out of the office and make them casual dress. Tack on a (non-compulsory) drink or meal afterwards. You may be surprised how an informal setting can drive ideas and help people speak up.
It's important to not just recognise staff who have made the biggest financial contribution to your business, staff who contribute to the company in more subtle ways, such as helping new starters or making the best cup of tea, also deserve praise.
Choose an employee of the month and give them special privileges like an extra-long lunch break or early finishes. Everyone will be clamouring for the honour the next month!

'Soft' benefits

As well as the core wellbeing benefits that help protect employees' health, ‘softer' benefits provide a well-rounded and comprehensive package, and score highly on the staff benefit-o-meter!

These may include:

flexible working
season ticket loans
extra holidays (either to reward long service or an option to ‘buy or sell' existing holiday entitlement)
childcare vouchers
retail vouchers
gym membership
on-site car parking
cycle to work scheme
dress down
dining cards
free or subsidised tea/coffee/lunch

Costs will, of course, vary, but the goodwill generated is priceless

Employee benefits for health and wellbeing

Here's an overview of some of the top Group Risk, and health and wellbeing benefits according to research by Employee Benefits magazine⁶.

Remember that there may be tax and National Insurance implications for both your business and your employees, so you should always talk to a professional tax adviser.

Life Insurance/Death in Service

Life insurance provides peace of mind and a tax-free lump sum (typically between 1x salary and 6x salary, though 4x salary is common) to an employee's loved ones should an employee die, helping relieve money worries at a very difficult time.

Pension

A pension is designed to fund a person’s retirement. With auto enrolment, all companies now have to offer their employees the opportunity to join a pension scheme. The majority of these are now what’s called a Defined Contribution scheme – where the money is invested by a pension provider chosen by you. These have now largely replaced the more traditional Defined Benefit scheme – where the amount someone is paid in retirement is based upon how many years the person has worked for you and the salary they’ve earned during that time.

Income Protection and Sick Pay Insurance

Both Income Protection and Sick Pay Insurance can provide a percentage of income if an employee is unable to work due to illness or injury, so you don't have to. The difference is that:

Income Protection covers long-term absence - typically, it starts to pay out after your employee's been off work for 6 months (called a deferred period, or waiting period) though this time can vary depending on the policy chosen. It usually continues to pay them until either they return to work, or for 2, 3 or 5 years, or until they reach retirement age.
A product like Sick Pay Insurance covers short-term absence. Depending on your provider, it can start to pay out after your employee's been off work for just one week and continues to pay them for up to a year.

However, neither policy covers your staff against redundancy.

Personal Accident Insurance (PAI)

Not to be confused with Income Protection, PAI can pay out a one-off, tax-free lump sum if an employee dies or suffers a permanent total disability following an accident or unforeseen event. It doesn’t cover sickness or general disability.

Medical or Health Cash Plan

A medical/health cash plan essentially covers smaller health issues. Depending on the condition claimed, it can either reimburse or pay towards healthcare such as minor dental work, check-ups, eye tests and physiotherapy..

Private Medical Insurance (PMI)

PMI is designed to meet either part or all of the cost of private medical treatment. It typically covers acute illness or injury, but usually excludes any pre-existing conditions.

Critical Illness Insurance

Critical Illness Insurance can pay a tax-free lump sum directly to an employee if they suffer any of a list of defined medical conditions or surgical procedures - classified as critical illnesses - and survive for a set amount of days afterwards – generally between 14-30.

Counselling or Employee Assistance Programmes (EAP)

An EAP offers a range of support tools to employees on a wide range of work/life issues, including counselling. Importantly, they typically include employer support too.

Dental

Dental cover is fast gaining in popularity as an employee benefit⁷. Depending on the plan chosen, it can cover 100% of NHS charges and contribute towards private dental treatment up to a set annual limit for a range of procedures.

Eyecare

Employers pay for regular eye tests and either for, or towards, the cost of glasses if required.

Here's are ten key points to consider when it comes to employee engagement:

1. Engagement can't be imposed from above. As Acas says, it's about creating a cultural shift in the way organisations behave.
2. Leadership means having a clear vision of the future and communicating this to employees.
3. Show you value the contribution your staff make by giving them the power, the responsibility and the trust to do so.
4. Encourage their ideas for innovations and improvements. .And importantly, give them proper consideration. After all, they're the ones in the front line and know better than anyone what can make a difference.
5. Allow employees to voice their views and concerns - and address them. Two-way communication is vital in business. Nothing is more damaging than unsubstantiated rumours or ill-feeling.
6. Fulfil your promises. Yes, ‘talk is cheap' is a cliché, but no less true for that. Employees will soon spot lip service and harbour a distrust of what you're telling them.
7. Ensure good staff/management relationships through man-management training and techniques, and by promoting key management behaviours.
8. Healthy staff equals engaged staff. Always promote employee wellbeing.
9. Provide the right mix of staff benefits. Business benefits show employees that you care about their welfare and the financial wellbeing – helping to recruit and retain key talent.
10. An engaged workforce shows on the bottom line. When people are engaged in their roles and the business, it means better morale, less staff absence, more innovation and improvement and greater productivity.

This article is a guide only and should not be taken as advice. For financial advice about the suitability of any product for your business, please speak to your financial adviser.

^{1 ORC – What makes a winning workplace – July 2016>}
^{2 Oxford Economics commissioned by Unum "The cost of brain drain", February 2014}
^{3 Line manager behaviour and stress at work – HSE, IIP and CIPD – 2009}
^{4. CIPD Absence Management report - 2016}
^{5. Money Talks: communicating employee benefits report. Cass Business School on behalf of Unum, 2013}
^{6 https://www.employeebenefits.co.uk/issues/benefits-research-2017/employee-benefitsstaffcare-benefits-research-2017/ pages 7, 8}
^{7. LaingBuisson Health Cover - 13th edition, 2017}

Employee engagement: a simple guide