Every two to four years Gallup conducts a research that pools multiple studies - aka “The Mother of All Research”. This assessment confirmed the well-established connection between employee engagement and performance outcome*. We recently celebrated the one-year customer anniversary (“Intuoversary” - patent pending) with one of our clients. As a gift, they shared their analysis of their team engagement in comparison with team target effectiveness with us.
The Use Case
Alright, let’s not keep you on the edge of your seat! Ready? Here we go:
Meet one of our many sweet customers - we’ll call them Company Awesome for the sake of this use case. Company Awesome is a digital agency, founded in 2013, with a turnover of €3.6 million, an annual employee growth rate of 219% and it currently employs 53 awesome (obviously!) individuals. Company Awesome consists out of 11 teams, of which 9 have clear billable targets. The engagement data (in the infographic below) of these 9 teams allows us to have a representative look into the impact of the team engagement levels on performance, and whether these teams manage to hit their targets.
The engagement levels of the teams of Company Awesome were established through INTUO’s engagement tool, in which the tool pulses 5 anonymous engagement questions to all employees.
The infographic clearly indicates that all billables are on average 90% linked with employee engagement. One the one hand, when the team’s engagement is over 70%, it is likely to exceed its target by 4%. On the other hand, once the engagement levels drop under 70%, the risk of not hitting its targets increases. These results are no coincidence, and it was apparent to the management team of Company Awesome that focussing on increasing team engagement had to be an absolute priority.
The actions taken
Our engagement data did not only help them in analyzing their performance levels, but also allowed Company Awesome to assess the situation and make decisions based on low/high engagement levels. In the case of some of the low engaged teams, they were able to identify leadership as a main source of disengagement, and took relevant measures of coaching managers or even changing leadership.
How engagement can make or break your growth (or even a company)
Before you start thinking “Oh well, I’m in carpenting. I am no digital agency”. The effects of engagement are not industry-biased. It is found that the strong correlations between engagement and performance are highly consistent across different organizations from diverse industries and regions of the world.
As aforementioned, Gallup found that - besides hitting targets - there are a total of nine performance outcomes that are affected by good or bad employee engagement levels.
- Customer ratings
- Turnover (for high turnover and low turnover organizations)
- Safety Incidents
- Shrinkage (theft)
- Patient safety incidents
- Quality (defects)
The disparity between the top and bottom quartile in employee engagement is fascinating, as top outperform bottom quartile work units with 22% in profitability, and 10% on customer ratings. The top quartile work units have lower safety incidents (48%), quality defects (41%), absenteeism (37%) and employee turnover.
I believe the research and our case study speak for itself. Employee engagement has a great impact on any business, in any industry - ignoring it is no longer an option in these rapidly changing markets. Measuring team engagement, and taking the appropriate actions are crucial steps in growing any company. It’s quite simple really: Be passionate about maximizing your company’s engagement and you’ll reap the benefits on so many levels. Happy employees sell better, give better customer support, care more about the company values. Happy employees don’t want to go looking for another job, and want to help their colleagues succeed.