Employee engagement is the key to innovation and competitiveness, says MacLeod Review

Employees must be involved 'fully' in the firms they work for to ensure business can take advantage of new opportunities, the MacLeod Review announced today.

The review was commissioned in September to make recommendations on promoting employee engagement, and recommends Government support to ensure the relationship between employers and employees is at the centre of business strategy.

The report recommends the Government should work to raise awareness of employee engagement benefits, and support employers hoping to enhance levels of employee engagement. Practical support for companies is also expected to be available by March 2010.

Senior HR professionals including Clare Chapman, director general of workforce at the Department of Health, Cary Cooper, professor at Lancaster University Management School, Jackie Orme, chief executive of the CIPD, and Justin King, CEO of Sainsbury's, have agreed to join a sponsor group to boost understanding of engagement.

Engagement expert David MacLeod, author of the report, said: "This is about unleashing the potential of people at work and enabling them to be the best they can be. Whether we are in a downturn or in better economic times, engagement is a key to innovation and competitiveness.

"Engagement is increasingly recognised as vital by senior figures in the public sector, the private sector and trades unions. We are delighted that if our recommendations are accepted, a distinguished sponsor group has already agreed to work with us to raise awareness and understanding.

"Employers in all parts of the economy can make a success of employee engagement through culture change, rather than investing significant financial resources."

According to the Chartered Management Institute (CMI), 85% of employees want to be viewed as ‘high potential' by their employer, but just 2% claim their organisation regards everyone as talent.

The CMI's chief executive, Ruth Spellman, who will be part of the sponsor group, said: "For a high quality of working life and a high quality of performance, it doesn't matter so much what the business is, but how the people in that business behave. Right now, organisations across the UK are hampered by poor management skills, with leaders who have an inability to ‘let go' and allow staff to take ownership of their work. The end result is talented people becoming frustrated and disengaged at best, or ready to leave, at worst."

But commenting on the MacLeod report, Paul Sweetman, director of the employee engagement practice at Fishburn Hedges, said: "Overall, it's a platform for progress, but also misses a few opportunities; I think it could have gone further and provided more practical guidance on the steps that employers should be taking right now.

"The report leaves employers needing more: it is short on the clear, practical support that employers need to respond to the imperative it lays down. For example, it discusses the crucial role of both leaders and managers, but could have gone further in exploring the key mechanisms through which leaders can create the desired engagement. In addition, the report emphasises the importance of establishing an employee voice, but could have contained more practical guidance on ways and means through which employers can stimulate this."