This topic is employee engagement, what does that mean to you and your business, anything, nothing, something but not too much, do you understand the different levels of engagement” and the impacts of these.
What difference would it make to your business if your employees are engaged, also I’m not talking engagement by letting people finish early one day or dress casually and have free ping pong.
I am talking 100% genuine active engagement.
The 4 Phases of Engagement
Actively Engaged
Engaged
Disengaged
Actively Disengaged.
Even in todays uber commercial world some things will always surprise me, as external consultants we are called into companies who are generally looking to increase their revenues, either sales, collections or sometime others.
“Revenue, we need more revenue", a fairly common shout from the CEO’s office, get more revenue, however sometimes its not about revenue its about efficiency, it is surprising how many companies don’t analyse the cost of generating their revenue, the obvious place to look is sales look at the conversions being closed and scream for more, again this isn’t always the correct answer, and not always the best place to look.
Efficiency is the key, if for example you have an average sale value of $10,000 and you are converting at 10%, let’s keep the math simple 10 deals per week gives you $100k turnover, you increase the closing % by 20 to 12% bringing you an extra 2 deals per week and an extra $20k.
Now look at this if you maintain the same 10% closing but increase your order value by 25% to $12500 you will achieve higher volumes from the same number of sales and costs, so the logical approach would be increase your efficiency as in order value first, then start working on ways to increase your closing %, this method will give you success and it has longevity.
However what we want to do here is Instead of just looking at S&M let’s check the engagement levels of all departments and let’s take a look at the resulting impact of this.
Here are a couple of scenarios you will all be familiar with.
Two restaurants, same quality of food same price, one has very average service the other has excellent efficient friendly and professional service, which one are you going back to with your leisure $’s?
Here’s another scenario.
You enter a store, the staff behind the counter ignore you and continue talking to each other, result lost opportunity for that store not the individuals, they are not bad people they are simply not engaged.
The next store has smiling friendly staff greeting you on entrance making you aware they are in place to serve and assist you, I know its obvious but where will the $’s be spent? which store, they have the same products, same prices same offers, just different engagement levels of their team members.
Which stage of the engagement table would you say the staff in these establishments are positioned, I would suggest 2 and 3 possibly, also both sets of employees are probably paid the same so whats the difference?
Its all about the engagement of the staff, direct by-products of increased engagement are,
Better client service,
Better responsibility levels,
Higher productivity,
Higher staff retention,
Lower turn over of employees,
Lower costs of annual recruitment and on boarding.
So genuine win-wins all round.
According to Gallup, the cost of replacing an employee can range from one-half to two times the employee's annual salary. So potentially just in recruitment costs training and fees that could be 10’s of $000’s, then factor in the lost revenue the cost is horrific.
This figure very rarely makes it onto the annual P&L forecast and budgets, its an absolute crippler to your bottom line and what are you doing to shift the engagement levels, I would venture possibly not much.
Another common mistake is the way the costs are looked at, for example if you invest in Training, for Sales and Marketing that is fairly easy, you can check the return against the cost very quickly, normally with good sales training you will see an immediate, albeit a short term spike in your revenues, which you can then directly apportion the difference to training cost, similar lines exist with marketing initiatives and training.
The challenge is how do you measure any impact with non revenue generating departments?
Most companies have more departments than Sales and Marketing, accounts, collections, administration, reception, client support pre sales service post sales service there are many variables.
All of these departments can have huge impact on how much money a client will spend with you.
Its all about the service and attitude they provide when they ”touch” the client, every contact with a client will impact their perception of your company and its products, the contact will impact significantly any amount of money the client will spend with you, poor to average service can result in maybe they will go for the basic model when the superior one is better suited to them, good to excellent service will change the sale from the basic to the superior model at no extra cost to your company.
Now here is the scary part multiply this 00’s of time per year, look at the potential revenues lost, or from another perspective the additional revenues that could be gained, with engaged team members.
Let’s just look at the table once more.
The 4 Phases of Engagement Super employee who will always go the extra mile, delivering the best.
Actively Engaged. Super employee, will always go the extra mile, delivering the best.
Engaged. A positive employee who will provide good service levels.
Disengaged. Usually looking for another job, no interest in your clients or product.
Actively Disengaged. A dangerous employee, who will look to disrupt team moral and offend Clients, this employee will cost you $000’s.
You want all of your employees in 1and 2. 3 is a danger sign and 4 is a virus to remove.
So why is it that so few companies look at the engagement levels of ALL team members.
How do you move team members from 3 to 2 and from 2 to 1?
What do you do with the one at number 4 ?
How is this impacting my revenues,? (negatively I would guess)
So really by adjusting your cash flow and diverting the replacement costs, converting them into retention investments and bringing in professional external training to specifically develop and engage your team across all departments, you can make significant increases in revenues and profit.
Stop seeing your employees as what they are, see them as who they are and most importantly what they can become.
They are the future of your company the next generation of leaders the next CEO.
They will stabilise the the workplace.
They will increase retention rates.
They will increase productivity.
They will impact your bottom line.
It’s time to invest in your team, your future before they become somebody else’s team and somebody else’s future.
Once you have made the decision to invest in all departments and by invest I am talking about bringing in external trainers to encourage, develop and motivate them, you are seriously on the road to creating a bigger better organisation with a genuinely engaged workforce.
You can sit back and watch your results across all metrics improve to levels beyond your expectations.
Maybe you run a company and can relate to a lot of the issues raised here, or maybe you are an employee within this type of organisation, well either way its time to stop and make the change.
An engaged team is simply an unstoppable force, targets will be achieved and surpassed, the entire workplace feels different because it is different, you will take so much pride in your role and your company, recruitment will suddenly become easier and the quality of candidates will increase, you will have a ready made future management structure, your clients will always receive the best possible service with their interest put before anything else.
At Vos International Business Consultants we can make a difference, if not to you, then possibly to your competitors, so we recommend that you get in front and stay in front.
Training isn’t something we did, it’s something we do.
So, if you think it’s time that you looked at this issue seriously, here’s what to do next.
Kevin
Please, Contact us now
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