Employee engagement, and the myriad tools surrounding the topic, has become a business buzzword of the twenty-first century. But what exactly is engagement, and is it really the panacea for everything from customer satisfaction to profitability? If there is a direct correlation between employee engagement and overall business success, how do organizations enable and promote engagement?
According to a recent Gallup “State of the Global Workplace” report, 85% of employees worldwide are not engaged or actively disengaged at work. Gallup estimates the cost of this disengagement at $7 trillion in lost productivity. The U.S. is slightly better, with 31% of the workforce engaged, but clearly, there is still vast room for improvement. Gallop research also highlights the results of this disengagement.
Business or work units that score in the top quartile of their organization in employee engagement have nearly double the odds of success (based on a composite of financial, customer, retention, safety, quality, shrinkage, and absenteeism metrics) when compared with those in the bottom quartile. Those at the 99th percentile have four times the success rate of those at the first percentile.
So, it would appear that the evidence is pretty clear. Engaged employees are essential to the success of any organization, and, given the critical nature of the work in healthcare, engaged employees are not only a benefit to the organization, they are imperative for the mission. In the following paragraphs I outline three key measurements of performance that are impacted by employee engagement: showing up and staying, quality and safety, and customer outcomes. In subsequent articles I detail three ways organizations can harness culture, technology, and the physical environment to enhance their employees’ workplace experience and engagement.
Showing Up and Staying
Engaged employees are significantly more likely to show up to work, stay in their job, and be productive than are their disengaged counterparts. In a recent presentation, Shannon Bennett, Quality Manager at the Mayo Clinic, suggests that there is a 48% decrease in absenteeism, a 25%-65% decrease in turnover, and a 21% improvement in productivity for engaged employees when compared to their disengaged colleagues.
According to “Shift Work & Absenteeism: The Bottom-Line Killer,” a publication of the workforce solution company Circadian, absenteeism costs roughly $3,600 per year for each hourly worker and $2,650 per year for salaried employees. The costs are directly attributable to wages paid to the absent employee, replacement costs (overtime for current employees or higher pay for temporary staff), and the administrative costs of managing the process. Additionally, absenteeism indirectly impacts quality and safety of service from overworked or understaffed employees, excess management time from disciplinary actions and scheduling processes, and potentially poor morale with staff that remain to “pick up the slack.”
Similarly, increased turnover impacts the bottom line, not to mention care quality, consumer experience, and general operations. According to the Work Institute’s “2018 Retention Report: Truth & Trends in Turnover,” one in four workers will voluntarily quit this year. By contrast, the Society for Human Resource Management places the annual turnover rate for highly engaged employees at 3%. Ranges vary, but on average each lost employee costs a company 33% of the employee’s base pay. The average cost of turnover for a frontline registered nurse is $52,100. Additionally, it takes on average three months to fill the vacant RN position. Improving engagement can help mitigate these risks by minimizing an employee’s looking for another job, attracting more talent in a tight labor environment, and contributing to the happiness of current employees.
Quality and Safety
Engaged employees are more concerned with the care they deliver and more diligent about safety procedures and keeping those in their care protected. Indeed, the Mayo Clinic reports that highly engaged workers experience 41% fewer quality issues and 48% fewer patient safety incidents. Similarly, a case study using nearly 29,000 healthcare employee opinion surveys demonstrated a direct tie between employee engagement and patient satisfaction. It reported, “85 percent of engaged employees displayed a genuinely caring attitude toward patients, compared to only 38 percent of disengaged employees,” and “91 percent of engaged employees recognize their workplace as dedicated to patient care, compared to only 42 percent of disengaged employees.”
High-quality care is an outcome highly dependent on the commitment, dedication and skills of an organization’s employees. As the studies above exhibit, they have an enormous impact on both quality and safety. Ultimately, their focus on quality care is tied directly to the overall customer experience.
Engaged employees are committed and enthusiastic about their work. They own and take direct responsibility for the customer experience. Recent studies have demonstrated causation in addition to correlation, and also looked at the size of the effect. The strength of employee engagement was shown to correlate directly with customer satisfaction. Indeed, an important study published in the Journal of Occupational and Organizational Psychology makes the comparison to a popular drug known for its efficacy. “The correlation between the male consumption of Viagra and sexual performance…is similar to the relationship between employee commitment and subsequent one-year customer satisfaction.”
Other studies confirm these results in the healthcare setting. Improving employee engagement boosts patient satisfaction and other elements of the patient experience, according to research from the Partnership for Public Service and Boston Consulting Group. Their study examined patient experience data from over 150 Department of Veterans Affairs medical centers between 2016 and 2018, and found that a one-point increase in the employee engagement scale correlated with a half-point increase in patient satisfaction scores.
Engaged employees help produce better outcomes than do other employees across organizations. They are essential to healthcare providers. However, the stereotypical engagement drivers—money, titles, and perks—are no longer the key to greater engagement. In the next few articles I will detail how organizations have successfully harnessed culture, technology, and the physical environment to more fully engage their employees. Petalo is working with providers to drive employee engagement through technological innovation. If you would like to learn more, please visit us at www.petalo.ai.