Employee engagement has been a buzzword in the training community for years. But what does it actually mean, how much should a company invest in this engagement and does it actually affect the bottom line of a business?
According to ConsumerInsight, employee engagement is “the extent to which employees feel passionate about their jobs, are committed to the organization and put discretionary effort into their work.” By this definition, maximum employee engagement should be every human resource professional’s goal. Employees who are passionate about their job, are committed to the organization and put the most effort possible into their work will produce a higher quality and quantity of work than their peers, translating to an increase in the bottom line.
Investing in Human Capital
It’s important as an L&D professional to realize there is a training gap in today’s workforce. It’s also important for each professional to do his or her best to close this gap by encouraging and educating businesses and other industry professionals to make a change.
Consider these statistics:
- The 2015 Manpower Talent Shortage Survey indicated that approximately 20 percent of businesses offered training to their employees.
- In the latest PricewaterhouseCoopers survey of nearly 1,350 CEOs, 73 percent ranked skill shortages as the greatest threat to their companies, a 10 percent jump from the 2014 results.
- Deloitte’s 2015 Global Human Capital Trends report found that 85 percent of the 3,300 business and HR executives surveyed rated the talent challenge as “very important” or “important,” a 21 percent increase from 2014’s results. However, only 28 percent of those surveyed said their businesses are prepared to deal with this talent deficit.
Organizations must see investment in human capital as a key business strategy that will improve productivity, performance and profits. They often forget that training and development is a long-term investment, not an expense. The best way to show this to leadership is through detailed examples that include hard data.
For example, AAMCO opened a state-of-the-art training center called AAMCO University in spring 2015. By the end of the first quarter of 2016, the company had received more deposit agreements to open new centers than the brand did for the entire previous year. Over 50 percent of deposits for new centers came from existing franchisees.
Technicians and customer service managers who participate in AAMCO University increase their skillsets and, in turn, the quality of their repair work and center profitability. Ultimately, the AAMCO centers run more efficiently, allowing franchisees the opportunity to expand their portfolios by opening additional AAMCO locations.
Training industry professionals must use examples like this one to inform, advise and ultimately push an organization’s leadership to see human capital as an important long-term investment.
Developing Engaged Employees by Teaching Value
Once leadership views training as an investment and not an expense, professionals must take the necessary steps to develop engaged employees in order for them to be successful and contribute to the bottom line.
Research prepared for the United Kingdom government found that companies with a highly engaged workforce experience a 19.2 percent growth in operating income over a 12-month period. Conversely, unengaged workers can cost an organization. McLean & Company found that a disengaged employee costs an organization approximately $3,400 for every $10,000 in annual salary. Disengaged employees cost the American economy up to $350 billion per year due to lost productivity.
Developing engaged employees begins with a dissemination of information. Employees must understand how training will benefit them, and the company, in the long run and how a lesson will offer real-world value. Stressing the personal value of what employees are about to learn, such as the potential for future promotion, can help increase attention spans and turn employees into active learners.
In business, investments often take several years before showing a return; however, companies can see the return on their training investment much sooner. Realizing the return on investment is one of the top reasons company leaders are more apt to increase training and development budgets, but only if the earned gains are measured.
In addition to a brand’s own profits, professionals should measure their competitors’ growth and compare it against their own. While profit gain may only equate to a few percentage points over a year, if a brand is growing faster than its top competitors because of an investment in training, the data is more significant to leadership because it shows the business is healthier than its competitors. It’s also important to think outside the box and gather other metrics, including customer loyalty, productivity and employee turnover. These metrics are all key performance indicators for any healthy and successful business.
An engaged workface has unlimited potential for producing top earnings, as long as the workers continue to stay passionate and committed to the business. Training professionals must also stay engaged, dedicated and passionate about their job and profession in order to help their companies boost the bottom line.