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BtoB

Involved work force highly correlated with better business results

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Julie Gebauer is managing director-workforce effectiveness at Towers Perrin, a professional services company. BtoB recently asked Gebauer about trends in assessing employee engagement and how it affects the bottom line.

BtoB: What is the connection between marketing and employee engagement?

Gebauer: Internal marketing can help influence employee engagement, which has an important impact on customer loyalty and overall business performance. Employee engagement is important not just because it seems like the right thing to do but because its highly correlated with better business results.

BtoB: What is that correlation?

Gebauer: We did a 12-month study across 50 global companies, determining those that are highly engaged versus those where employee engagement is low. There was a profound difference in business results: Operating income increased 19.2% over the preceding 12 months for those companies with highly engaged with net income up by 13.7%. Companies with disengaged employees actually had significant decreases in operating income and suffered financial losses.

BtoB: How does the marketing effort toward internal engagement differ from the role of human resources?

Gebauer: When it comes to financial performance, employee satisfaction on its own doesn't really matter. Happy employees may be engaged or not. If they don't have three things—a rational understanding of their company's goals and values; an emotional attachment to the organization; and a willingness to go above and beyond their specific tasks—it won't help financial performance.

BtoB: How do you know it isn't strong financials that are causing high employee engagement rather than the other way around?

Gebauer: Actually, the influence goes both ways, with strong financial results contributing to higher employee engagement. It's a virtuous circle of influence. It doesn't matter where a company enters the cycle; after the cycle is started, employee engagement continues to improve financial performance.

BtoB: What can companies do to heighten employee engagement?

Gebauer: Topping the list [for] three years running in the U.S. is senior management's interest in employee well-being. Not higher pay, or flex time or things like that. Next are career development and training opportunities, a strong employer brand and involvement in decision-making and problem-solving.

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