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John Hutton has insisted his review to help companies improve employee engagement will help to increase profits.
Last month, as business secretary, he announced a government-funded review of employee engagement to work out how to improve workplace productivity. It will be led by David MacLeod, a non-executive director at the Ministry of Justice, and Nita Clark, director of the Involvement and Participation Association. They are expected to report in spring 2009.
Hutton said the government had "missed the plot" by focusing on introducing or amending employment law for too long, and it was time to look at how to improve the quality of work.
But, he told Employers' Law, the review was tightly linked to increasing company turnover.
"We need to make sure companies understand that engagement is not just a nice thing to have, but it really does influence the bottom line," he said.
Clark added there was a danger the review would be seen as "fluffy" but promised to focus on tangible ideas for improving employee commitment.
Employers present when Hutton announced the review asked whether tax incentives would be used to encourage them to offer engagement initiatives, such as volunteering days or CSR activities.
But Jessica Prendergrast, senior research fellow at think-tank the Social Market Foundation, said the review must make it clear engagement is not just an add-on. "We need to make sure this is about the bottom line. This is about serious money."
MacLeod said: "The fact that only about 12% of the UK workforce can be considered as highly engaged shows that there is potential for huge gains for the economy if we can improve in this area."
