Enhancing Employee Engagement through Learning and Development
THE TERM “EMPLOYEE ENGAGEMENT” SEEMS TO BE POPPING UP EVERYWHERE THESE DAYS. DOES IT REALLY MATTER TO THE SUCCESS OF AN ORGANISATION OR IS IT THE LATEST OVERUSED BUZZWORD?
According to a recent “State of the Global Workforce Report” published by Gallup, Inc., employee engagement, or the lack of it, is a pervasive problem throughout the world. The results show that as many as 70% of the U.S. workforce is disengaged and as many as 9 out of 10 employees are disengaged in Asia. This problem is estimated to cost organisations, on average, more than $2,600 per employee per year, according to Brian Braudis, a leadership and management consultant.
With so much at stake, what can an organisation do to improve employee engagement? Although differences in geography, culture, and generation impact what drives engagement globally, employees state, without exception, they want to be part of an organisation that offers opportunities for development, provides rewards for performance, and has a solid reputation. In fact, in every region surveyed, the desire for development opportunities topped the list of employee engagement drivers1.
Seventy-six percent of employees surveyed said they look for opportunities to acquire new knowledge and develop skills, but only 34% of employees feel that they are getting the training and education they need2. When you combine these two statistics with the low engagement scores mentioned above, it becomes obvious that one reason employees are not delivering their full discretionary effort is because they don’t feel their development needs are met. And although most feel their employers generally satisfy their needs for on-the-job-development, they report that opportunities for formal development are lacking.
The very employees who are the most valuable – those who are constantly looking to expand their expertise and sharpen their skills – are the ones who are most likely to leave an organisation if development opportunities are not made available to them. They become demotivated and look elsewhere for personal and professional satisfaction. Studies have shown that the lack of learning and development opportunities contributes up to 25% of staff turnover. With the cost of employee turnover ranging from 30% of annual salary for entry level employees to 150% for mid-level employees to as much as 400% for high-level employees, employers must consider ways to reduce unnecessary turnover. Providing the formal learning and development opportunities that surveys say employees want helps mitigate high turnover rates.
One of the most effective ways to implement formal training programs in organisations is through the use of robust onboarding programmes. Onboarding has been shown to shorten the time to competence for newly hired employees. The faster these hires become self-sufficient and productive, the faster the organisation can execute its business strategy. Forty percent of employees who receive poor onboarding leave their positions within the first year. An effective onboarding programme can be a very cost effective approach for improving employee retention, satisfaction, and, ultimately, engagement.
Within the insurance industry, onboarding is particularly crucial. The nature of the business is complex and, with a myriad of products and unfamiliar terminology, new employees become easily overwhelmed and intimidated. Providing new hires with education that exposes them to insurance concepts, terminology, and basic product knowledge early in the hiring process better prepares them for subsequent on-the-job training. Organisations such as the Malaysian Insurance Institute (MII) and LOMA include in their curricula foundational education courses ideal for inclusion in an organisation’s onboarding programme. Because these courses focus on universal concepts, an
organisation’s in-house learning and development staff can focus their efforts on developing educational opportunities specific to the organisation rather than developing general insurance education. By combining both general foundational education with company-specific training, organisations can be assured that new hires begin their careers with the best possible chance for success.
But, an organisation’s commitment to establishing formal development opportunities doesn’t stop with onboarding. A well-designed continuous training and development programme can foster employee engagement by helping employees learn new things and improve job performance. Employees’ confidence is enhanced when they believe they are doing a good job and they are valued by their organisation. Most employees enjoy variety in their jobs and want to see the potential for development within their roles. When organisations follow up robust onboarding programmes with opportunities for employees at all levels, they continue developing their knowledge of the industry. Additional job-specific technical training complements this general industry knowledge and results in engaged employees with the knowledge and skills to drive an organisation’s performance.
There is a quantifiable correlation between increased levels of employee engagement and organisational success. Aon Hewitt’s Trends in Global Employee Engagement 2014 suggests that every 0.6% sales increase could be attributed to an incremental percentage point of engaged employees. To put that statistic in perspective, a $5 billion company could potentially increase operating income by $20 million dollars for every 1% increase in employee engagement. Aon Hewitt’s research also uncovered an association between total shareholder return (TSR) and levels of employee engagement. The report found that TSR was 50% higher than average for organisations with the most highly engaged employees. Statistics such as these are not simple anomalies. More than 29 research studies support the correlation between employee engagement and improved organisational results.
Simply stated, increasing employee engagement is critical for improving employee morale, increasing productivity, and gaining competitive advantage. Although many factors impact employee engagement, implementing formal learning and development programmes and making them accessible is one way to engage employees in a meaningful way. The results of such programmes can be observed quickly and their success is easily quantified.
When employees receive a solid introduction to the company and the insurance industry, when they receive job-related training, and when they have access to additional education that provides broad industry knowledge, the company gains engaged employees who have the business acumen to perform their jobs and contribute to company results.
Organisations that embrace this formula for success have better education and training programmes than those that do not. Successful organisations recognise that they cannot afford to compromise their talent agenda, especially given the importance of that talent to their longterm growth.