Moving Beyond Engagement to Enablement

Why should you care about employee engagement and enablement? Hay Group in the UK recently released these numbers:

• 59% of UK employees started 2010 planning to find a new job
• Organizations that engage and enable employees reduce voluntary turnover by 54%
• Employees who are both highly engaged and enabled are 50% more likely to outperform expectations

That’s great… But what’s enablement? Hay group defines an enabling work environment as one that “empowers employees to ‘go the extra mile’ and provides the tools and processes to actively deal with employee frustrations.”

Sounds a lot like what I talked about in my last post on removing obstacles so employees can make progress – which they define as their own greatest factor of engagement.

What’s that look like in real numbers?

Revenue: A typical company with $5 billion in revenues in an industry with average revenue growth of eight percent would see revenues increase by $400 million. A company with top quartile levels of employee engagement could expect an increase of $1 billion. And a company in the top quartile on both engagement and enablement could anticipate an increase of a full $1.8 billion.

Turnover: For an organization with 20,000 employees and an annual voluntary turnover rate of eight percent, the cost of turnover is approximately $56 million (assuming an average salary of $35,000). Reducing the voluntary turnover rate by 40 percent would yield annual savings of $22.4 million. But reductions in turnover through high levels of engagement and enablement would yield savings of over $30 million annually, a difference of more than $7.5 million.

Employee performance: For an organization producing $10 billion of product with 20 percent of employees exceeding performance expectations, increasing the percentage of high performers by 1.5 times (by transforming average performers into superior performers) would increase output by $350 million (ie, if 10 percent of population improves performance by 35 percent, overall performance improvement across entire population is 3.5 percent).”

I’ve often argued that you cannot engage employees; you can only create a work environment in which employees want to engage. Enabling employees – listening to them, removing obstacles, resolving frustrations – is one way you can create that environment. And it will pay off.

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