If every organisation in the UK improved their organisational productivity, as a nation we could increase GDP and close the productivity gap between the UK of the rest of the G7.
Recent events, including Brexit uncertainty and political tensions within the UK, have had a major effect on employee productivity. Productivity is an urgent issue, it featured heavily in the chancellor’s spring budget, it is high on the agenda for most CEOs and is increasingly being used as a KPI by which HR are measured. This is forcing many HR departments to rethink their business strategies and consider how best to optimise the performance of their workforce to boost productivity.
Personal Group, a leading provider of employee services in the UK, has always been curious about the connection between employee engagement and business performance and recently launched a report looking at the impact company engagement strategies have on national productivity levels. The report titled The Business of Engagement: Improving Productivity through People features ten interviews with some of the UK’s top CEOs to find out their views on employee engagement and to test the hypothesis that happy employees are more engaged employees, and therefore more productive.
This connection is more pertinent to the UK economy than ever – unemployment is the lowest it has been for over a decade and yet national productivity remains flat. In 2016, output per hour of work in the UK was a shocking 18% lower than the other members of the G7, making the productivity gap between us and our European neighbours, the widest since records began in 1991. According to the University of Warwick, when people feel happy, they are 12% more productive. But a recent survey from Personal Group shows 48% of employees are rarely or never happy at work. This begs the question: what would happen if the UK’s employees became a little bit happier and more engaged in the workplace? How much impact would this have on the organisations productivity and would this have any impact on national GDP and productivity? Research from Alex Edmans, Professor of Finance at London Business School demonstrated the links between employee satisfaction and stock returns. He studied the 100 best companies to work for in America and found that “firms with high employee engagement delivered stock returns that beat their peers by 2.3 to 3.8% per year over a 28-year period – that’s 89% to 184% compounded.” All signs suggest that happy, more engaged employees could be the key to the productivity puzzle.
The summary of The Business of Engagement report shows;
1. There is a clear and powerful link between happy and engaged employees and an organisation’s productivity.
2. If every organisation in the UK improved their productivity, this would positively impact the national GDP.
3. The business of employee engagement does not solely reside within the confines of the HR department.
4. Organisations with high employee engagement deliver higher stock returns.
5. To achieve high levels of engagement, the drive, vision and commitment must come from the top of the organisation – leadership is critical.
6. The easiest and most effective way of quickly improving the happiness and engagement of employees is to recognise performance – catch people doing a great job and tell them ‘Thank you’.
Mark Scanlon, CEO of Personal Group comments: “There are simple steps that every business leader can learn from to encourage greater engagement within their business and to drive productivity. The most simple and effective one of all is to listen to staff and say thank you. Engagement must be on every business leader’s agenda; engagement is key to competitiveness and UK plc must take note.”
Personal Group will be distributing copies of the Business of Engagement report at the Rewards & Benefits Summit, 17-19 May Barcelona. You can read the report chapters and watch videos of the interviews here.
