Why FDs Miss the Point of Employee Engagement Surveys
It’s time FDs began to appreciate the ROI of employee engagement surveys, says Mike Turner, the Managing Director of You Become. Engagement surveys are leading indicators of financial success.
Employee engagement is important because it drives the behaviour of employees, and that in turn drives organisational results. Numerous studies have shown the correlation between financial success and high employee engagement. For example, Hewitt Research found that companies with double-digit growth have employee engagement percentages of about 63% which is 20% greater than companies achieving single-digit growth. A global workforce study by Towers Watson found that high engagement companies had a 27.4% average operating margin while low engagement companies had an average operating margin of 9.9%.
Effective surveys—those carried out by specialists—of employee engagement provide FDs and other stakeholders with metrics that show the level of engagement or disengagement among employees. What’s more, they can also reveal how many employees intend to leave the company within the following 12 months.
That gives key stakeholders, including FDs, actionable information.
“I don’t understand why so many FDs take little or no interest in employee engagement surveys,” says Mike in his latest video. “After all, for many companies, the single biggest cost is people.”
Typically, FDs are happier dealing with hard metrics such as profit margins and ROI because they’re lagging indicators that reveal what has already taken place based on objective, verifiable information. They’re less comfortable with softer metrics, particularly those that surround employees.
But the results of employee engagement surveys can be used to bolster engagement and so avoid churn and the hefty cost of replacing disengaged staff. A report by Oxford Economics estimated the cost of replacing one employee at about £30,000. That includes the logistical cost of recruiting and absorbing a new worker and the cost of lost output while the replacement employee gets up to speed (estimated to be about £25,000). Of course, the more senior the job position, the higher that cost will be.
“It fascinates me that FDs aren’t as engaged as they need to be in the thing that will measure exactly where staff are,” Mike says. “An effective, well-run survey will give you metrics and measures that you can look at and which will signify how much people are going to cost in the next 12 months.”
You Become specialises not only in running the survey but also providing post-survey advice and support to an organisation to help improve employee engagement levels and reduce churn.
If you need help or would like to discuss any issue that this video series raises, please call a member of our team on 01932 977090. You Become is a leading expert in employee engagement and organisational culture for ambitious UK companies.