Why Employee Engagement is a Top Priority Initiative

How engaged employees can greatly impact the performance of a company

‍Employee engagement is a hot topic these days, especially in human resources departments of companies of all sizes and industries, all around the country. According to Engage for Success, a British organization whose mission is to promote employee engagement (www.engageforsuccess.org), “Employee engagement is a workplace approach resulting in the right conditions for all members of an organization to give of their best each day, committed to their organization’s goals and values, motivated to contribute to organizational success, with an enhanced sense of their own well-being”. Employee engagement is particularly critical now when the economy is booming, there are many more job openings than job applicants, unemployment rates are at a record low and companies struggle to bring in capable employees and retain them. Engaged employees, regardless of company size, industry and geography have a lot in common. In my work with primarily manufacturing companies I was able to reconcile most theories to actual practices, which revealed that:

‍Engaged employees tend to:

• Stay much longer with the company, regardless of outside new opportunities.
• Become more efficient and productive.
• Care more about co-workers.
• Discourage waste and inefficiency.
• Find personal satisfaction in doing a good job and aligning their goals with their company’s goals.

Disengaged employees tend to:

• Leave their employment much quicker and at any sign of outside opportunity.
• Be more inefficient and wasteful.
• Care less about everyday work, tasks, procedures and safety.
• Be more susceptible to making mistakes requiring re-work.
• Be more prone to work-related injuries.

Having a large percentage of disengaged employees causes:

• Higher product costs due to longer labor times in multiple jobs plus wasted material.
• Lower overall company morale and employee self-esteem.
• Lower customer on-time delivery.
• Lower product quality resulting in higher warranty costs and customer dissatisfaction.
• Higher training costs.
• Higher HR and accounting payroll administration costs.

At one point I had worked with the HR department of a mid-sized manufacturing company on implementing an employee engagement initiative. Not exactly the type of work I normally do, but since I realized how critical this was to the success of the organization I got directly involved in the project and stayed with this project through its conclusion. Encouraging and improving employee engagement can be done in many ways and no one method fits all companies. In a future blog entry, I will elaborate on what managers can do to create better employee loyally and increase employee engagement. For now, I will say that employee engagement ties directly to the financial performance of the company, an area I have traditionally been involved in. As such, senior management and finance management will realize a direct benefit to the company’s financial health as a direct result of continually improving employee engagement.

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Alan Hart, MBA, is Principal Consultant at Pacific Shine Group in Portland, Oregon, with responsibility for client business development and hands-on client project implementations. Prior to starting Pacific Shine Group, he worked in various executive accounting and finance positions with technology and growth companies. Notable is his 18 years in the hi-tech manufacturing industry where he served as Controller, Vice President of Finance and CFO of several privately as well as publically held companies in the Hi-Tech industry, such as Hybrid Arts, Inc. Hamilton Bay Associates and Syncronys Software. In his role in management consulting, Alan has worked in diverse industries and with a variety of clients, including fortune 1000 companies such as Boeing, Delta Airlines, Intel, Wyndham Worldwide and others, as well as many mid-market organizations such as Guitar Center, Ducommun AeroStructures, Cypress Semiconductor, TriQuint Semiconductor and others.

Combining his skills and experience in engineering with deep understanding of technical accounting, he is able to assist small and medium-size manufacturing companies establish GAAP compliant accounting and reporting systems.