Investment in people is the key to staff engagement

In troubled times, it is more important than ever that organisations are able to motivate and inspire their people to use their skills and ability productively.

With Chartered Institute of Personnel and Development research previously suggesting that on average only a third of British staff are fully engaged at work, it’s clear that many organisations have a long way to go if they are to head off the damage disengagement inflicts. So it is encouraging that the value of being accredited as a Best Company – which rates workplace performance and best practice – continues to climb.

Applications for accreditation in 2008 were up 33% on last year, and 2009 registrations are looking positive. This is a signal that recruitment and retention have become a top priority for many employers.

A brief look at our statistics shows just how high standards are in three-star accredited companies – the top performing organisations. On average, 90% of employees in three star companies are actively engaged, while one and two star companies show figures of 85% and 87% respectively.

Good leadership

One reason for this performance is that the best companies have the best leaders. Employee engagement is directly linked not only to the organisation’s brand, but also to the effectiveness of its chief executive and senior management team.

Leadership needs to be strong even if some companies are forced to restructure or make redundancies as a result of the credit crunch, a negative can be turned into a positive. By communicating as quickly as possible – outlining the options and seeking feedback from workers – clear leadership can avoid the situation where staff are unclear and stressed. Our 2008 survey shows that in three-star rated companies, 86% of staff had confidence in the leadership skills of their senior management team, while the same proportion agreed that the organisation was strong on values and principles.

Inspirational leadership in particular is difficult to achieve, yet three-quarters of employees in three star companies see their leader as inspirational, compared to fewer than half of staff in companies that did not achieve accreditation.

Research also tells us that a listening leadership is crucial to staff engagement, and accredited companies appear to have learned this lesson. In three star firms, more than seven in 10 employees feel that senior management listen to their concerns. This is in marked contrast to unaccredited organisations, where this figure drops to about four in 10.


Often the first casualty of any recession is the training and development budget. However, with skills shortages at all levels and a declining number of graduates in the talent pool, our figures show that development opportunities are key to staff retention rates. In organisations that are not accredited, the number of staff who felt there were limited opportunities to learn and grow (37%) was almost double that of three-star accredited companies.

Another misconception revealed by our research is that financial incentives such as pay and benefits are the most effective ways of attracting and retaining talent. In fact, pay and perks have largely been replaced by flexibility and work-life balance as key motivators.

Indicators of success

So how will you know whether you’ve got all this right? One clear sign will be that staff turnover will fall. In 2006, accredited organisations had 13% lower staff turnover than those organisations that did not achieve accreditation.

What’s more, your employees will start to become evangelists for your organisation. Personal recommendation is increasingly being seen as the Holy Grail of direct marketing, so when nearly 90% of the staff in three-star rated companies in our 2008 survey said they would recommend their organisation to others, this can only bode well for morale.

In a nutshell, acknowledging the link between staff engagement and the bottom line is just the start. Organisations that really want to reap the benefits know that this means investing in their people, their personal development and their role within the company. Crucially, this means making the effort to find out how your employees feel about you as an employer, and then acting on that feedback.

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