Can you hear me?

Poor employee engagement is a growing problem for businesses around the world, and it is having a major impact on their bottom line. Workforces with higher levels of engagement are more motivated in their jobs and more committed to their employer, which results in higher levels of productivity and innovation.

More importantly, it can actually boost income. According to research by US HR consultancy ISR, companies with highly engaged staff saw their operating income grow by more than 19 percent and their net income rise by 13 percent over a 12-month period. Businesses with low staff engagement, however, saw their operating income slump by nearly 33 percent, with an almost four percent decline in net income over the same period.

One of the main reasons that employees feel disengaged is that senior managers, and the board in particular, are so bad at communicating with them. Ironic as it may seem in an environment where businesses spend a great deal of time and effort communicating with vital stakeholders ranging from analysts and the media through to customers and shareholders, workers seem to be an afterthought.

The Human Touch, a study carried out amongst more than 100 leading British businesses by Crystal Interactive, discovered that more than half (55 percent) admitted that they struggled to get their employee communications right – 47 percent went further and confessed that they were either poor or very poor at communicating with the most junior employees.

But this is not because companies do not value their staff – 70 percent of businesses said that their employees were their most valuable assets, second only to brand and reputation at 73 percent, and more important even than their customer base at 69 percent. The problem seems to be the inadequate systems in place to support good communications between employees and managers, which do not encourage interaction or show that employee ideas and opinions are valued. The Human Touch found that a staggering 95 percent of senior managers and directors admitted that staff ideas and opinions are not always valued.

Yet the value of successful employee communications can in part be measured by the amount of new ideas generated by staff – dubbed ‘the DNA of success’ – which is a sure sign of good engagement. Companies that scored highly with their employee communications said that on average 90 percent of their new ideas came from their own workers. By comparison, businesses that were seen to have poor employee communications were only able to generate an average of 20 percent of their new ideas from staff.

Good internal communications also reduces staff churn, which can cost US$1800 per employee per year. For instance, the study shows that feeling part of a team (a by-product of good internal communications) comes ahead of pay, bonuses and flexible working in terms of its impact on employee morale.

Despite these figures, the research suggests boards are twice as good at dealing with external audiences than internal ones, and at least five times better at dealing with investors, stakeholders and partners than employees. Companies worry about huge churn costs and go to enormous lengths looking for even modest improvements in margin, yet many still have not mastered how to simply interact with their staff.

Ultimately, companies fall down by choosing methods of communications that do not encourage interaction. The study found that 79 percent of senior teams make important announcements via e-mail, whereas two percent even admit to sending vital announcements to staff by SMS via their cell phones. Although 65 percent of companies also rely on managers to disseminate news, only 18 percent of the senior managers questioned said that communication between them and the board is very good.

The use of employee communications methods is different amongst those companies identified in the study has having ‘the DNA of success’. Although 77 percent use middle managers to relay news, the board is twice as good at senior to junior management interaction. The board is also more open and is twice as likely to respond to a question from a staff member (38 percent versus 18 percent), and it is twice as likely to view employees as the most important audience.

In addition, they use e-mail less for major announcements (61 percent) and hold more staff events (54 percent have events more than twice a year). What’s more, these events always have staff interaction and 46 percent will use independent facilitators. This means the audience and board are put on a more equal communications footing and employees can be more candid.

Crystal Interactive specializes in maximizing the opportunity for staff and leaders to engage with each other at conferences. Using Crystal’s advanced facilitation techniques and unique wireless technology, sponsors can encourage a new level of dialogue with employees by collecting questions, simultaneously and anonymously, or to garner feedback and opinions on the issues being discussed. Events are already seen as a powerful internal communications tool, but by using these techniques to ensure that the communication is truly ‘two-way’, organizations maximize the benefits of face-to-face interaction.

Good staff interaction can no longer be simply seen something that’s nice to have. It isn’t just the sign of a good employer; it’s the mark of a clever company that wants to build a more engaged workforce – and it can add millions of dollars to the bottom line. By talking to and listening to staff, being open about the strategy and welcoming input, organizations increase their profitability, keep people onside during tough times and identify the very ideas that will give them a competitive edge.

The Human Touch Report is available from Crystal Interactive by visiting www.crystal-interactive.co.uk