How to Improve Your Income Statement by Increasing Worker Engagement

The positive effects worker engagement has on a company’s income statement has been made evident by numerous studies, most notably a Gallup study: The Relationship Between Engagement at Work and Organizational Outcomes. The study found that the companies with the highest level of employee engagement had 10% higher customer loyalty/engagement, 21% higher productivity, 37% less employee absenteeism, 48% decrease in workplace incidents which all contributes to a 22% increase in profitability. Given how improving employee engagement can clearly increase the company’s bottom line, the question then becomes: how can you increase employee engagement?

How to Increase Employee Engagement

A study by the Institute for Employee Studies found that worker engagement level is most affected by the employees having a sense that their opinions matter and that they are valued by their employer. Giving employees the sense that their opinions matter can be done simply, with no cost to the company. By simply allowing for open dialogues between upper management and on-site workers, you can show your employees that their voices matter and even get some ground breaking ideas that can further improve productivity. We discussed an example of this in “The Deep Impact Safety Has on Your Bottom Line” where Paul O’Neill, the former CEO of Alcoa, created an open dialogue between workers and management which led to an on-site worker sharing an idea that essentially doubled his plant’s profits. Not only will this open dialogue between management and workers help increase employee engagement, but your workers may have some game changing ideas for your organization.

However, in order for this open dialogue to be successful, executives need to be true leaders of the process. Paul O’Neill gave his on-site workers his home phone number so that they could call him day or night if their supervisor failed to follow up on any of their suggestions for improving the workplace. In order to see the impact of open communication between workers and upper management, executives need to demonstrate this sort of staunch leadership so that management will actually listen and abide by the new policy, and workers will feel confident that their voices will be heard.

The study also discussed how workers are more engaged when they feel valued. One way you can do so is by developing a strong health and safety program, which uses a formal corrective action process and positive reinforcement for safe behaviors opposed to punishment. A formal corrective action process requires a way to quickly and effectively communicate any hazards which need to be addressed and a way to follow up on the assigned corrective actions to ensure they close properly. A safety management system and mobile apps which allow you to take and annotate photos of hazards and send that photo with instructions to assignee can greatly improve the process. Software that includes a progress report for the corrective action and sends email notifications to the assignee until the action is complete also helps management track that corrective actions are actually being closed. Celebrating the department or workers who close the most corrective actions or have the shortest corrective action close time is one way you can prove that you value your employees and make them feel more engaged in the process.

Although software can help improve your EHS program, without executives demonstrating leadership and spearheading the initiative, management will not properly enforce the policies and workers will not follow them nor feel valued. In order for worker engagement to be affected, executives need to lead by example and prove to management and on-site workers that the health and safety of their employees is their utmost concern.

In order for organizations to increase customer loyalty and productivity, and decrease employee absenteeism and workplace incidents by increasing worker engagement, executives need to demonstrate their leadership skills, introduce new policies and ensure that these policies are being enforced by upper management. Merely playing hearsay to policy changes intended to increase employee engagement will not yield the results of the top performers from the Gallup study. Only by executives truly committing to improving employee engagement will the organization see the intended results and ultimately, an improvement in their income statement.