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The Role of Employee Engagement in the Return to Growth

While facing the recent recession, the threat of employee turnover seemed low due to a rigid labor market. During that time, however, employee engagement levels dropped. Today, as employees see signs of recovery, they increasingly plan to leave their positions suggesting a looming employee-retention problem and a talent exodus that could have long-term impact on corporate performance. In fact, Corporate Executive Board's Corporate Leadership Council conducted research that finds less than one quarter of employees (23 percent) exhibited a high level of "intent to stay," a leading measure of turnover, in the second quarter of 2010.

The extensive employee engagement study also found that the employees most committed to their organizations put forth 57 percent more effort and are 87 percent less likely to leave their company than employees who consider themselves disengaged. It should be no surprise then that employee engagement, or lack thereof, is a critical factor in an organization's overall financial success.

Most companies use surveys to anticipate and respond to these types of employee engagement and emerging workforce challenges, but analysis has shown that they struggle to arrive at the desired results. The engagement surveys used today typically only provide a read out on the levels of employee engagement within critical workforce populations, enabling the organization to understand where there might be future retention or productivity issues, but not providing the types of actionable insight that aid in addressing them.

Leading companies are now moving beyond just understanding the levels of their employees' engagement, and are using surveys to understand the drivers behind it. These insights inform proactive and plan-specific interventions to improve engagement effectively and realize business results. Companies that use an employee engagement survey as a change management tool—rather than a data source—can reduce voluntary turnover in at-risk populations exponentially and also improve discretionary effort.

Through ongoing consultation with progressive global organizations, CLC Genesee, the workforce survey and HR consulting division of CEB, has identified three guiding principles to help companies achieve more strategic business outcomes from their employee engagement surveys:

1. Align closely with the business during the design phase. Rather than solely testing employee perceptions on survey items (i.e., company values, career paths, or relationships with colleagues) progressive companies ensure a collaborative approach among functional executives who own critical elements of corporate strategy.

For example, a company looking to grow share of wallet by improving customer loyalty would ensure that marketing, sales and market research executives partner with the survey team to ensure that results can sufficiently predict the workforce's ability to meet this business objective. This process begins very early in the project lifecycle and is especially important to designing an effective survey.

2. Derive business-critical insights from survey results. Traditional data reports on engagement levels have been helpful, but when analyzed the right way, robust analytics can be used to link survey results with tangible business outcomes. Some examples of those outcomes include improving customer satisfaction scores or increasing revenue per employee. Organizations can address challenging business questions by strategically designing an upcoming survey or by going back to historical survey results and re-analyzing them with an eye toward those outcomes.

3. Empower line managers to drive business performance on an ongoing basis. Many survey initiatives result in data reports that just sit on the shelf and never tie specifically to improvement activities that drive business growth. Refusing to accept the status quo of static reports, leading organizations take further measures to ensure that the survey influences meaningful and measurable change. Action plans, communication resources, and employee development tools are all critical in affecting positive change after an employee survey. These action-oriented resources can be configured by critical population, but should primarily target the development of front-line managers based on individual strengths and weaknesses.

Employee engagement will play a critical role for organizations actively looking to gain competitive advantage in both short- and long-term time horizons. By following these guiding principles, an employee engagement survey can move beyond a data collection exercise and become a catalyst for growth by enabling the organization to retain more employees, driving higher levels of discretionary effort and aligning employee efforts to strategic imperatives.

What the Best Companies Do™

CEB specializes in helping companies drive corporate performance by identifying and building on best practices. The organization offers data analysis, research, and advisory services relevant to business leadership. CEB's client and member network includes 85 percent of the Fortune 500, 50 percent of the Dow Jones Asian Titans, 70 percent of the FTSE 100, and 80 percent of the DAX-30. CEB membership encompasses 50 countries, 5,300 individual organizations, and 225,000 business professionals.

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