What Does It Take to Engage Employees?
Everyone seems to agree that disengaged employees cost enterprises billions of dollars in lost profits, sales, market share and opportunity. The Gallup Organization has placed the cost of disengaged employees to the US economy at $350 billion per year. (Or nearly half of the TARP bailout.)
Recent studies have shown a clear linkage between strong engagement strategies and strong financial performance. The need for value-driven, authentic and meaningful organizations, which drive their mission consistently through all layers and performance functions to provide joyous brand experiences for their consumers, had been clearly identified.
We long ago announced that the Industrial Age was over and "Long Live the Service Economy" or the "Experience Economy" or the "Thank You Economy". Label it what you will, but this 7.0 seismic shift has rocked the business world and changed everything. Behold! We are people of conscious, living consciously, doing good by doing good! Or are we?
A national unemployment rate that hovers around 10 percent during this recovery may indicate that Industrial Era management tactics are alive and well. Actually, the employment rate of the U.S. population is just over 58 percent. In previous recoveries, the unemployment rate dropped. In this one, it flattened. When the economy slowed, most companies responded they way they always have by cutting salaries, benefits and people.
Do these Industrial Era Tactics work? Well, productivity is up because fewer workers are forced to get more done. Profits are up, not because of increased demand, but because productivity is up and worker cost is down. One of the saddest indicators of the seeming success of this tactic? The CEOs who laid off the most employees earned 42 percent more than their peers who didn't wield the hatchet.
The real cost of Industrial Age tactics are yet to come due. Employees are stressed to the limits. They live with a constant fear of job loss, pay cuts and benefit cuts. They lose best friends and coworkers to layoffs. They worry about their spouse's job security. They feel stuck—nearly imprisoned—as there are no promotions, room to grow or new positions at their current job and no new opportunities with other employers. These stresses create an uninspired atmosphere with actively disengaged, disgruntled and unhappy employees.