In uncertain times we need to raise the benchmark
For decades benchmarking has been an essential tool for any business looking to understand how its performance stacks up against competition and contemporaries.
HR teams are no strangers to benchmarking. Historically, it has been applied to pay as teams have long since sought to understand the market value of particular skills to ensure employees are fairly and competitively remunerated. But, in recent years, benchmarking has also been applied to other areas of HR, including employee engagement.
This shift has been driven by a mounting body of evidence that proves employee engagement and business success are intrinsically linked. As our data shows, businesses with highly engaged teams achieve better business outcomes, including higher customer satisfaction, retention, and profitability.
What’s more, according to the Workplace Research Foundation, highly engaged employees are 38% more likely to have above-average productivity.
In light of this, more business leaders have started to pay close attention to their employee engagement. They want to know when it dips, and why, so that remedial action can be taken before it’s too late. They also want to know when it spikes so they can understand what worked and how an organisation's engagement is tracking against that of the competition.
Strong employee engagement really gives companies a tangible edge over their rivals – particularly when it comes to the success of a transformation strategy, or rapid growth. That’s why it’s essential for leaders to have a true benchmark in place, so they can really understand where they rank, and why.
And ‘true’ is the important word here. Too many teams fall into the trap of looking at engagement scores and making crude comparisons based on industry or role. This is problematic because engagement scores can be impacted by so many factors. A new joiner, for example, is likely to score their organisation far more highly than someone who has been at a firm for two or three years and had time to identify areas of improvement.
To form a fair and meaningful comparison between organisations and teams, we first need to create a level playing field. And this is where data is instrumental.
By combining demographic data with general trends around tenure, age, gender, occupation, seniority, and office location, we can create a multidimensional impression of an organisation or team – and a true benchmark for their engagement levels.
The impact of COVID-19
COVID-19 has had the largest impact on employee engagement since the 2008 economic crash. But the impact hasn’t been all bad.
While the pandemic increased anxiety and stress among many employees, it has also given employers the opportunity to step-up and show care and support. This, alongside an increase in remote working, has led to some employees feeling more positive about their organisations.
Our Impact of COVID-19 on Employee Engagement report found that employee engagement increased globally by 2% between January and July 2020. Employees were particularly impressed by the opportunity to work remotely, their working environment, and their organisation’s support for their mental wellbeing. Scores to these questions increased by 10%, 6%, and 5% respectively.
Within this context, it’s clear to see why at Peakon we have just updated our benchmarks to more accurately reflect the new world of work. As more employees work from home, for example, average scores on remote working will improve. If employers really want to see whether they’ve shifted the dial in these areas, they’ll need to look at their results in context, against the updated true benchmarks.
What this means is that, when we finally emerge from the pandemic, businesses won’t be able to rest on their laurels. They can’t just revert back to inflexible working policies or display any less care for individuals’ mental health. If they do, they will be actively disengaging employees and will risk falling below the new heightened standard upheld by their peers.
Business and HR leaders cannot afford to do this in ‘normal’ times – and they certainly can’t now. COVID-19 is forcing executives to double down on transformational change initiatives that need to happen in months, not years.
If they’re to succeed, they’ll need to truly engage employees, get them on board with their plans, and empower people at all levels to reach their full potential.
Joe Cainey is director of data science at Peakon