Does employee engagement save money?


Alex Pollock

I left the NAEM EHS Management Forum last October wanting to yell, “there is a huge bottom line impact from poor leadership…why do we tolerate it!?”

As examples from my session notes, we heard:

  • Employee disengagement is a $250 billion opportunity
  • The highest risk factor for workplace absence from back pain is relationship with direct supervisor over the last 3 months
  • The speed of return to work for “older” workers is directly influenced by quality of health care and relationship with direct supervisor

Please allow me to share some recent research from the Gallup Organization that builds upon the details I shared in my September blog and makes the case for good leadership….that includes leadership that engages the heart of people… even more stridently:

  • 75% of voluntary turnover can be influenced directly by the direct supervisor
  • The top 2 predictors of future employee turnover are relationship with the direct supervisor and poor job fit

From what I’m seeing there has been little increase in the number of “engaged” employees in our workplaces since the Gallup research began over 10 years ago.

Of course during this period, and especially with the recent market dive, we’ve become fascinated with bottom line impacting methodologies like Lean Manufacturing, Six Sigma. We seem to be ignoring some low lying fruit here. Why is this do you think? What should we be doing to increase the leadership effectiveness of current and future EHS leaders? What are some practical steps that can be taken now to increase employee engagement? In an economic climate where costs need to be cut wherever possible, I believe investing in good leadership might be one of the biggest savings opportunity we’ve seen lately.

About Alex Pollock

Alex Pollock has been studying leadership effectiveness for more than 30 years. A former leader in environment, health and safety, and public affairs at The Dow Chemical Co., he learned that we all have leadership roles to play. He enjoys discussing new ideas and sharing practical ways we can all become better leaders.

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1 Comment
  1. David Williams

    March 4, 2009

    Employee engagement is influenced by many things, so there is no magic bullet for improving it. A few somewhat random thoughts:

    –With no sense of job security and little sense of a social safety net it is not surprising that employee engagement is low. What’s in it for me? Likely not much other than getting outsourced or offshored.

    –Engagement is a strategic, long-term commitment. Publicly traded companies appear to be incapable of doing anything strategic or long-term focused. I am not a financial genius, but I struggle with why all public companies seem to be fascinated with short-term performance and their own stock price. If the markets weren’t almost entirely speculative, which they are, then the long-term would be much more heavily weighted in stock buy/sell decisions.

    –My experience with Six Sigma and Lean is that if they are only focused on efficiencies and driving down costs, then they really don’t deliver over the long-term. People are smart – if they know projects are only being done to cut costs and hammer people through lay-offs and outsourcing, then they stop contributing. They might make a show of it, but won’t put anything real into it.

    –Engagement starts with the management team genuinely caring about the people they work with and demonstrating that on a daily basis without waivering. Very rarely is that be done. Management is often only really rewarded for delivering on the “hard” stuff like hitting production numbers while engagement is handled as the “soft” items typically lumped into a single box on an annual review form and given a single-digit weighting in the performance rating. In other words people are important, but I am not rewarded for taking care of them.

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