Eric Peacock is a serial entrepreneur. His first buy was BabyGro which he purchased from its American owners. He currently chairs eight businesses. When asked about employee engagement, Eric says he makes sure it is present in every organisation. He was involved in shaping the engaging for success guidance as a business advocate for the government programme. Here he answers some questions about to walk the engagement talk.
Why should businesses invest in engaging their employees?
From a business point of view, employee engagement means profit on the bottom line and competitive advantage. There is a huge amount of evidence that organisations with a highly engaged employee workforce have better return on capital and competitive advantage, delivering excellent customer service, high levels of creativity and exceptional innovation.
There is no question that an engaged employee base gives you a hugely competitive edge. Competitors can try to copy your products and maybe your processes, or they can even poach an employee or two. But they can’t steal your culture. Great culture, which underpins innovation, enthusiasm and motivation, is how organisations can differentiate themselves. Just consider Google or John Lewis. Or smaller organisations, such as Innocent Smoothies. Employee engagement is an integral part of achieving the culture, and ultimately, the success that you want for your business.
Whose responsibility is engagement – should it belong to HR, management or the board, for example?
In my experience, successful employee engagement starts with commitment and passion from the leader of the business. This enthusiasm cascades throughout the leadership team and consequently enables engagement champions at every level. So it starts with the leadership team, however, everyone needs to be involved to make it a reality.
What would you advise a HR manager to say to a CFO or board to convince them engagement is the way forward?
Once entrepreneurs, bosses and CFOs understand what employee engagement is all about, it should be a very easy sell. I haven’t yet met a CFO or Board of Directors who doesn’t want to accelerate profit growth and competitive advantages.
The Hay Group found that that engaged employees generate 43% more revenue than disengaged ones. They also demonstrate higher levels of innovation, have lower rates of sickness or absenteeism, are less likely to leave the organisation and have a positive impact on customer services.
HR managers can help make the case and demonstrate how employee engagement is a proven low or no cost and highly effective way to motivate employees and drive profitable top line growth. And in an era of constrained resources, where nearly every organisation is seeking ‘more for less’, employee engagement is not something which CFOs can ignore.
Many SMEs are unfamiliar with typical HR ideas such as employee engagement. Where are the benefits for them and how might they go about engaging on a budget?
Firstly, employee engagement should not be seen as a simply an HR initiative. It is an initiative for all departments, and the benefits to a company’s bottom line can be significant.
For example, many SMEs have gone through a painful restructuring in recent times. Employee engagement is an effective way to motivate employees during challenging times, and drive profitable top line growth.
Further, a key question almost every ambitious SME will ask itself at some point is whether it can grow internationally. If the answer is ‘yes’, this can be a big shift culturally and physically to do business abroad. However, in my experience, engaged organisations can make this transition more easily. Employee engagement gives them clear blue water.
It terms of making it happen, it is much easier to make employee engagement happen within smaller organisations, and it doesn’t have to be expensive. SMEs don’t have to break down existing complex processes – there is less bureaucracy overall. They do, however, need a systematic approach to making employee engagement part of business as usual. It is easier to collect employee viewpoints, have new ideas and introduce them. Communicating and getting buy in is relatively quick and easy to do and, critically, SMEs can see the positive impact of the changed approach more quickly.
A simple change could be giving your employees more of a voice in your organisation, This is critical within all organisations, especially SMEs that are either growing fast and / or undergoing rapid change as employees will only feel engaged with the direction of the business if they feel involved. And it only costs a change of attitude and mindset.”
How has employee engagement helped your businesses flourish?
There are multiple examples, but one specific one is around involving our employees in big leadership decisions. Within the companies which I chair, such as Baydonhill plc and Cimex Ltd, before the leadership team start setting the company strategy for the year we set up a live video recorder in a room. Every employee has the chance to offer their view on four questions related to strategy, and contribute their views, to camera. We collate these views, and these feed into and drive our thinking for the preliminary stages of the planning process. As a result, everyone has a chance to make their point, and they feel ownership of the resulting strategy. Meanwhile, the viewpoints are always enlightening. The video uncovers ideas that leadership hadn’t come close to thinking of, such as niche opportunities in the market which we were not exploring, but should be. It also reveals processes in the business which could be improved.
What first steps can a business take today to engage their employees?
As I mentioned before, the Department for Business Innovation and Skills (BIS) has launched a range of practical guidance. There are four guides which focus on the four key areas which will help employers create a more engaged workplace. These include:
- Creating and communicating your strategic narrative: how to develop a narrative that summarises your organisation’s purpose, principles, strategy and the way it does business
- Become a more engaging manager: how to help managers in your organisation inspire, challenge and support their people and help those employees achieve their potential
- Establish employee voice in your organisation: how to involve your people in your organisation, so they give the views, ideas and feedback that will help you improve the business
- Create and communicate business values with integrity: how you and your people can make sure the organisation does what it says it will do every day.
The guidance has been developed with input from a range of business leaders, employers and employee engagement practitioners, including myself, and follows the publication of the independent report to Government last year , 'Engaging for Success', co-authored by David MacLeod and Nita Clarke. I am hoping that this will help even more employers unlock the business benefits which an engaged workforce will deliver.
How can you identify those who are engaged – and what can you do about those who are not?
Engaged employees understand what is expected of them in their job, and how this contributes to the business’ goals. Therefore, they are more likely to focus on specific outcomes, such as increasing sales of product or improving customer service. I find that employees who are engaged will take the initiative, looking for better, more efficient or innovative ways of getting the job done and, ultimately, achieving their goal. On the other hand, less engaged employees simply focus on getting their day-to-day tasks done, and often done not very well. Non-engaged employees rarely take the initiative – they will do what it asked of them and nothing more – and will rarely go the extra mile for their employer.
A good leader or manager has to take the time to identify those who are disengaged and explore the reasons behind it. They can then determine what intervention is appropriate. In my experience, in the majority of cases, employees respond favourably to managers taking the time to listen to them and hear their views.
Are some people ‘unengageable’? If so, why?
I haven’t met very many people like this, but yes – there are. There can be a variety of reasons, some of which employers can help to resolve and others which are outside their control. The important thing is that employers don’t just simply accept that an employee is ‘unengageable’ without trying to explore the reasons behind their lack of motivation. It may be that the person is simply in the wrong job and that isn’t in the interest of either the employer or employee.
How can you tell when taking on new staff if they are likely to engage with the business and add to an engaging culture at work?
The majority of the time new recruits are brimming with enthusiasm when they start in their new jobs, and it is up to bosses and senior management to harness this energy, and potential new ideas. Companies should take the time to explain to new staff what the company goals are, what its ambitions are and ensure that employee fully understands how their role contributes to the bigger picture. If they understand, from day one, what the business is about and that the company welcomes their views they will be more likely to contribute to an engaging culture at work.
What can you do to maintain engagement and improve on it over the long-term?
Employee engagement should be central to every business not a one off initiative.
In any organisation, you need to keep asking for views and opinions, and don’t assume that because you asked for their ideas, that people will come forward voluntarily in the future. If you’re larger, set up more formal process like employee meetings. And importantly, take time to feedback – there’s nothing worse for employees then feeling their ideas are going into a black hole.
Likewise, plans will always change and evolve as circumstances demand. So you need to keep on communicating with your people. Keep them updated, and make sure that these are opportunities for discussion, feedback and suggestions on how the team can collectively address emerging issues and opportunities.
The Department for Business Innovation and Skills (BIS) guidance is free and can be downloaded from www.businesslink.gov.uk/employeengagement. It is 100% designed to help employers reap the benefits of effective engagement, including greater productivity, higher levels of innovation and lower rates of sickness and absence.