Consulting firm Towers Watson says it has found evidence that employers with a fully engaged workforce tend to have higher profit margins.
However, it has also found that more and more employees are feeling disillusioned with their workplace.
The study, which covered some 32,000 employees, including 1,000 in Canada, found that about two-thirds of the Canadian employees surveyed aren’t “fully engaged” in their work and feel frustrated by the level of support they receive.
It appears that after almost a decade of pressure to do more with less, workers are finding themselves unable to sustain the kinds of positive associations with their employers that lead to greater productivity, the firm said. And this lack of engagement can have repercussions on a company’s bottom line.
“The survey results are an important wake-up call,” said Ofelia Isabel, Towers Watson’s Canadian leader for talent and rewards. “The business case is compelling. When we compare engagement scores of global organizations with their operating margins, companies with high sustainable engagement have margins almost three times larger than those of organizations with disengaged workers.”
In fact, the survey found that profit margins of such companies were about three times higher than those of low-scoring employers.
“When workers are not fully engaged, it leads to increased risk for employers,” said France Dufresne, leader of Towers Watson’s talent and rewards practice in Montreal. “It makes companies more vulnerable to lower productivity and higher inefficiency, greater rates of absenteeism and turnover, and increased costs for chronic illnesses.”
Towers Watson said it has been known for years that there’s a link between workforce engagement and corporate performance, but that this study breaks new ground by measuring three factors that contribute to sustainable workforce engagement: traditional engagement, enablement and energy.
- Traditional engagement refers to employees’ willingness to give effort to their employer;
- Enablement means having the tools, resources and support to get work done efficiently; and
- Energy is defined as having a work environment that actively supports physical, emotional and interpersonal well-being.
According to the study, virtually all (95%) of highly engaged Canadian employees believed that they had the work tools and resources they needed to achieve exceptional performance—compared with only 20% of disengaged employees.
Similar disparities appeared with regard to the ability to sustain energy throughout the workday (97% versus 32%) and sense of personal accomplishment at work (99% versus 33%).
However, only 38% of the Canadian respondents believed that their organization and senior leaders encouraged and supported a healthy workforce, and just 39% believed that senior leaders were sincerely interested in their well-being.
Employee value propositions (EVPs)—which address career development, culture, values and rewards—also seem to be sorely neglected by employers. Only 34% of employees said their organization had a formal EVP and, where an EVP is in place, only 34% think their employer is doing a good job of living up to it.
“When there is no formal EVP or the EVP does not align organizational strategy with employee aspirations, sustainable engagement is difficult to achieve,” explained Yves Blain, a senior communication and change management consultant with Towers Watson.
While the survey findings point out some risks for employers, they also suggest opportunities to address the full spectrum of engagement, said Towers Watson.
The study identified specific attributes of the work environment that are critical to traditional engagement, enablement and energy, highlighting actions employers can take to improve engagement and increase productivity.
“There is a real imperative for change right now,” said Isabel. “The world has changed, but have our programs and practices changed with it? The risks of continuing to manage the traditional way are just too great from a performance perspective.”