What Employee Engagement Means to Recruiters & The Staffing Industry

February 9, 2016 by

RecruitmentHundreds of millions of dollars are spent with recruiters and staffing firms each year by companies trying to attract top talent to empty positions. The obvious hope on the companies’ part is that the recruiters will find the perfect person for the position and that the new hire remains fully engaged in the years to come. A natural question posed by the people holding the purse strings for recruiting is: Are we getting our money’s worth?

I was invited to do a keynote presentation at the 25th Annual Staffing Industry Analysts Executive Forum later this month to answer that exact question in my address.

I’ve talked to thousands of staffing managers and recruiters who are at their wits end trying to justify the cost of recruiting fees. But when it comes down to it, recruiters are worth the expense because they vet candidates for engagement and deliver better results than companies get with their own recruiting efforts.

The well-researched statistics below will give you great fodder for enlightening the naysayers and turning them into passionate believers in the value of Employee Engagement.

The Best-in-class or most Engaged Organizations (regularly defined as the top 10%) garner the following awesome business and financial outcomes compared to those organizations with average levels of Employee Engagement:

  • 20 times more innovation and creativity – In addition, 59% of Engaged Employees report that their job brings out their best creativity versus only 3% for the Disengaged Employees.1 Needless to say, this heightened out-of-the-box thinking pays huge dividends in “Creative” and “Design” type job functions and industries.
  • 44% Higher Retention2
  • 37% Higher Sales3
  • 125% Less Burnout/Job Stress4 Job stress/workload/lack of work-life balance are the number one reason people contemplate resigning from their jobs.
  • 66% Lower Absenteeism
  • Absenteeism costs the average North American employer $3,600 per hourly employee, and $2,650 per salaried employee, per year.5
  • 51% Less Turnover6 Turnover costs the American economy over $300 Billion dollars each year. Replacement costs for an employee resignation run anywhere from one to two years’ base salary for that position.
  • 53% of the Actively Disengaged are content to continue to cash their paychecks as opposed to begin to look for new employment7; these are commonly referred to as the “Quit and Stay” employees.
  • Communication is five times more likely to be seen as a positive by the employees8
  • Higher volunteerism by employees leading to 31% higher productivity9
  • Much better safety compliance and thus, fewer workplace accidents. Engaged Business Units have 62% less safety incidents than their unengaged counterparts10
  • Significantly lower instances of employee theft or what the retail industry commonly calls “shrinkage.” Companies above the 50th percentile on Employee Engagement versus those in the bottom half experienced a 123% higher success rate in eliminating this theft.11
  • Engaged employees are linked to engaged customers at a very high correlation coefficient of .8512

One of the most meaningful metrics is specific to the healthcare industry. Sadly, in America, you are five times more likely to die of a hospital-born infection than you are a homicide.13 Why are so many infections creating these needless deaths? The primary reason is the lack of proper hand washing by caregivers. Thus, knowing that there is a near-perfect correlation between Employee Engagement and hand washing compliance (a .99 correlation coefficient according to HR Solutions), increasing engagement actually saves lives!

Increasing Employee Engagement also increases ethical behavior. In fact, the two topics are highly correlated at a .73 coefficient.14 One can only wonder how unengaged GM’s engineers were when they decided that $1 per car was too costly to fix the faulty ignition switch that was ultimately linked to the pointless deaths of 156 people. The same Hay/ERC study also reported that Engaged Employees were much more likely to report misconduct than their unengaged and disengaged coworkers. A review of the internal memos at GM clearly showed that although many employees noticed the switch problem that could cut off engines and disable airbags, power steering and power brakes, the company failed to recall 2.6 million cars until more than one decade later. In this case, a culture of Ambivalence and Disengagement tragically cost 13 lives, or maybe more.

Furthermore, by finding the right and most engaged top talent for clients, the staffing industry will bolster its reputation as the best place to go when seeking top talent. Happy customers remain existing customers who also become Net Promoters, who refer you and your firm to new customers.

Lastly, if you are attempting to sell your recruiting services to an executive who only cares about “the bottom line,” share this metric: “Best-in-class organizations are 350% more profitable than organizations with average Employee Engagement levels.”15

Needless to say, this summary is compelling evidence supporting the enormous value-add contributed by recruiters and staffing firms worldwide vis-a-vis employee engagement.

 

Source citations:
1. Source: Gallup 2009 Q12 Meta-Analysis
2. Source: Gallup 2013 State of the American Workplace
3. Source: September, 2013 Before Happiness, Shawn Achor
4. Source: Gallup 2012 Q12 Meta-Analysis Report
5. Source: Forbes, July 2013 The Causes and Costs of Absenteeism in the Workplace
6. Source: Gallup 2013 State of the American Workplace
7. Source: Modern Survey Trends in Employee Engagement – 2013
8. Source: HR Solutions 2007 The Link Between Workplace Communication and Employee Engagement.
9. Source: September, 2013: Before Happiness, Shawn Achor
10. Source: 2012 Q12 Gallup Meta-Analysis
11. Source: Gallup 2013 State of the American Workplace.
12. Source: Harvard Business Review 1994 and updated July, 2008 Service-Profit Chain Reports
13. Source: Centers for Disease Control and Prevention: 2005 Hospital-born Infection Report
14. Source: July, 2010 Joint Report by The Hay Group and Ethics Resource Center
15. Source: March, 2008 – Employee Satisfaction Contributes to the Bottom Line – The Wharton School of Business

 

 

Kevin Sheridan is an internationally-recognized Keynote Speaker, a New York Times Best Selling Author, and one of the most sought-after voices in the world on the topic of Employee Engagement. For five years running, he has been honored on Inc. Magazine’s top 100 Leadership Speakers in the world, as well as Inc.’s top 100 experts on Employee Engagement. He was also honored to be named to The Employee Engagement Award’s Top 101 Global Influencers on Employee Engagement of 2017.

Having spent thirty years as a high-level Human Capital Management consultant, Kevin has helped some of the world’s largest corporations rebuild a culture that fosters productive engagement, earning him several distinctive awards and honors. Kevin’s premier creation, PEER®, has been consistently recognized as a long-overdue, industry-changing innovation in the field of Employee Engagement. His first book, Building a Magnetic Culture, made six of the best seller lists including The New York Times, Wall Street Journal, and USA Today. He is also the author of The Virtual Manager, which explores how to most effectively manage remote workers.

Kevin received a Master of Business Administration from the Harvard Business School in 1988, concentrating his degree in Strategy, Human Resources Management, and Organizational Behavior. He is also a serial entrepreneur, having founded and sold three different companies.

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Email: kevin@kevinsheridanllc.com