Today we explore the concept of employee engagement – what it is, how do you measure it, and how do you increase it. To help us give depth to this topic, we brought back Natasha Hawker of Employee Matters to talk about how higher levels of employee engagement can lead to increased profitability in your business.
- Optimise your business results through engagement
- Communicate your business strategy to your workforce
- Work out KPIs for every role in the business
- Measure employee engagement and get their feedback
- Exit your non performers sooner rather than later
- The correlation between engagement and profit
- Getting in touch with Natasha
Joanna: Okay. Hi Natasha, thank you so much for coming back on to our talking law podcast. It’s fabulous to have you back again.
Natasha: Oh thank you so much for having me back. I love coming back again.
Joanna: Fabulous. Okay. All right. So today we are talking about how to get 20% more profit in the business through employee engagement. That sounds crazy! Tell us all about it. How is this possible?
Optimise your business results through engagement
Natasha: It is possible and I think it’s one of the untapped levers in a business that most business owners ignore. They have no idea what is engagement, how do you define it, how do you measure it and how do you increase it.
Joanna: Well, let’s go through all of those. They sound like a good set of questions. So what is engagement? Why is it important?
Natasha: Look I believe engagement is one of the, honestly I believe it’s one of the secrets to optimising your business and optimising your business results even more importantly. I think too many people hire people into their business and they expect them to learn just by osmosis.
They don’t do a very good onboarding process and I wanted to use an example here and I wanted again, in fact I mentioned it last time. I’m a huge fan of Richard Branson but if you think about the team that turn up every day to work at Virgin, how do you think they feel about going to work every day? How would they describe what it’s like to be an employee at Virgin? I don’t know whether your listeners know but he bought out in the US for head office. They have unlimited holidays. They can take as many holidays a year as they want.
Joanna: How does that work?
Natasha: Exactly! How does it work? Well the irony is many people love work so much they don’t you know they take what is probably deemed to be a normal amount but people who want to go and travel round the world for six months can and they’ll backfill their role and potentially bring them back when they come back. They’ve got that loyalty so they haven’t lost that person permanently.
Joanna: So you’re not talking about paid holidays there?
Natasha: Yeah, I think they do paid holidays. It’s amazing. It’s unheard of and that’s very Richard Branson as well.
I’m sure there are some limits on it, but you know it’s an amazing policy that I’m not suggesting everyone in Australia wants to do right now and can afford to do. But it’s around thinking differently. It’s around how would you know and if you value that employee so much and it’s a choice between travelling around Europe for 12 months or getting them back and they’ve been with you for 10 years and they walk out the door with all that company knowledge. I know how expensive that is to replace it. And so I think if you were to ask those Virgin employees what it’s like to work there, they’re going to say it’s fun. They work hard. There’s a strong customer centric approach and they would probably say that there are very high levels of trust and autonomy for employees.
I think when businesses have team of employees that know their job, know what success looks like, can raise problems in a safe environment and offer solutions. They love their jobs. They love coming to work. And I think when they are like that they feel incredibly valued and respected and they will go above and beyond for you as a business and that’s really really important.
An example being I have team members that work for me at night at 11 o’clock. I’m fast asleep by that time. Just putting it out there. But they work for me at 11 o’clock at night not because I tell them to but because they love what they do. That’s when it suits them. They have incredible flexibility to go and watch their children at the school carnival or whatever and sometimes they’ll work at 11 o’clock at night because it suits them. So it’s give and take. But essentially engagement is the measure of discretionary effort.
What will make someone stay to work back with you, not because you necessarily paying them, not because they feel that there’s something in it for me but they so bought in to you your business, your product, your clients that they want to be there. They generally want to help you achieve your business goals and they feel bought into it.
Joanna: And how do you create that then?
Communicate your business strategy to your workforce
Natasha: Yeah. I think the big thing around how you get that started is a couple of things. One is you have to have a strategy or a business plan that the entire workforce know about and that they and this is the most important thing. Plenty of business go tick. Yeah I’ve got that. But do the individual employees actually understand how their role and what their role is in helping the business achieve that and most business or employees would say I know there’s a business plan but I don’t know what I have to do to impact that.
Joanna: Let’s play an example of a receptionist. How do you recommend that you go about communicating the receptionists connection to that or bookkeeper or someone in the back end of a business? Because of course it can be a lot easier to communicate that to front end staff or a client facing staff but it can be a lot harder I think to communicate that to less front facing staff.
Natasha: I think that it comes back to, we talked about in our last podcast it’s around that transparency so all of my team we have our 10 year, 3 year, 1 year big rocks goals on a 1-2 page document and we share that with the business. So everyone knows what our revenue is now, what we expect it to be in 12 months, what we want it to be in three years and 10 years. They know all of that information and that’s to that transparency point. So to your receptionist it’s really important that they have some KPIs. I’m a big fan in KPIs across all levels of business.
So for me a receptionist is, if she saw or he saw her job. Let’s talk about the dentist. Every person that comes in there nine out of 10 are going to be terrified about going to the dentist. Imagine if they walk in and the receptionist grunts at them and throws a piece of paper at a board to fill out a form and tells them to sit over there versus somebody who’s aware that they’re probably feeling anxiety, who’s engaging in them, who might be telling them some jokes, who might be talking and putting their mind off or putting their mind at ease. And they see themselves as a protector for those clients or patients that are coming in.
Imagine the difference of the experience of those patients, scenario A versus scenario B and then turn those into KPIs. So turn them into to a maybe it’s a score that they get. They get to tick a happy smiling face of their experience with the receptionist versus a grumpy face or whatever it is. But something that ties their output of their role back to the core strategy of the business.
Work out KPIs for every role in the business
Joanna: This is really interesting stuff because obviously we work with our clients in developing employment contracts and then the other element, the next element to that is you know you obviously you have this contract that relates to you know sometimes there’ll be an incentive component sometimes they won’t.
Incentives, you obviously need to be attached to some sort of achievement of whatever their KPI is that relates to it. So you’re saying here I guess our reception staff perhaps not tied to any bonus or incentive arrangement, we can still use KPIs in the background to increase their engagement and their productivity and performance. But what does this actually look like? You said we can have the smiley face. We can create the system around it by getting feedback from our customers to fill in over the smiley face or not smiley face. What does this then look like as a KPI?
Natasha: Yes, so it might be a score. It might be what is on average if they were rated from 1 to 5 that they need to achieve a score four and above over a week. It may be that they have scripts that they need to follow in terms of welcoming the you know picking up the phone and they need to follow the same script so that it’s upbeat in the way that it’s delivered. It’s consistent in terms of the content and that everybody feels loved and valued as a client. So they might be.
Joanna: How do we measure that then? That’s the problem, right?
Natasha: Well obviously you might record the calls to determine whether they’re answering but often you can hear it too. You know if you’re wandering through a reception whether they’re on script or off script in terms of how they’re interacting with people. It might be that they have to make sure that the coffee cups are clean and that they’re done three times a day or it does depend on the role and what you’re trying to achieve and it does depend on what the strategy of the business and the goals of the business are. But I believe you can work out KPIs for every role in a business and they’re very very important.
I think to your point around KPI is linked to bonuses. I’m a great believer in discretionary bonus. We just had our team day day before yesterday. We had our best financial year ever and we’ve just given our team a dinner out for them and their partners on our expense as a thank you for all the hard work they’ve done.
Now they didn’t know that was coming. That’s a surprise and delight and it’s just you know as a thank you. And what do you think the impact of that has been? Most of our team don’t get time to go out for dinner because they’re mums of young kids. They don’t do enough of that themselves, and so now they have that opportunity to go out as a reward for doing a great job this year.
Joanna: Okay. All right so we’re talking about perhaps doing things every now and again to surprise and delight. I like that. But also from I guess a planning sense, planning KPIs for every staff member is that what you’re saying?
Measure employee engagement and get their feedback
Natasha: I think so. Have a communication plan. The big one here Joanna is be an authentic leader. No one expects you to be Superman or Superwoman.
Be real, and that brings enormous benefits with it as a business owner. It was interesting, again I had some feedback from one of my team members last week. I have been working with her for probably 6, 12 months now. I took her to an event offsite and I asked her what she observed about me as her boss and she said Natasha you were exactly the same. There was no difference between what you present to your team and how you went to the outside world and I hadn’t expected that feedback but I thought it was really valuable feedback because that was around being authentic. You show up and you are who you are. Give your team a voice.
Joanna: Yeah. I was just going to say, but what are examples here then of inauthenticity?
Natasha: Yes, saying one thing to one person and saying another thing to another. Pretending you’re something you’re not. I’ve had clients come to me and say Natasha, I’d like you to do this work and I’d say actually no, you don’t.
My team is infinitely better at this stuff than I am. I’m not in the detail anymore. I used to be great H.R. detailed practitioner but now I run a business and that’s what I’m focused on. I’m not the person who was going through your modern award and who you want writing your policies because I’m not good at it anymore. But my team are.
Being actually strong enough to say I’m not the expert here. You don’t actually want me, you want my team because they’re great and setting them up like that.
I think the other thing that’s really important is you need to give your team a voice. You need to give them an opportunity to give you feedback. You need to actually measure engagement. There’s a number of different tools you can use. We use one called six questions which I love. What I like about it is it’s a weekly engagement pulse check and it’s literally six questions and there’s a smiley face from being very very happy to being very very sad.
Joanna: What are the six questions can I ask?
Natasha: I’ll see if I can remember them. They were:
- Do you enjoy working at Employee Matters?
- How productive were you this week?
- Do you believe that you are being given the right amount of training?
- Do you believe that your team are there for you?
Something along those lines. We get measured every week and it gives us a score and it tells us how we benchmarking against a global score. People can do it on their phones. It takes them under a minute to do and we know that there are ebbs and flows in a business and some weeks you get to have a really bad week and that’s okay. But what happens when you do an engagement survey just once a year is it’s very retrospective and it’s looking back.
Often by the time you get the results, the information is dated. What I love about this is it’s every week and you can see if there’s any trends that you don’t like or trends that you do like. For example, a lot of our team said the only one we got marked slightly down on was training because a lot of people come to us with the skills they already need and so this year we’re spending a lot more time and money and effort on building their skills in another area.
Joanna: Great. Okay. All right. Are there any other tips then that you have here for getting your workforce engaged?
Exit your non performers sooner rather than later
Natasha: Yeah. I think the other one would be to exit non performers. It sounds ironic but most people sit on their nonperformance or the people that do the wrong thing for way too long and that can have a very negative impact and long lasting impact on engagement.
Joanna: And I think you know part of the reason for that is often number one from a personal perspective many people are anti conflict and they don’t want to create a situation where they’re having to either 1) have that discussion or 2) have that impact on someone.
But the other components that can also be at play are fear, fear of you know for good reason, fear of the employee taking legal action against them or fear of other sorts of things creating waves within the organisation. And so I guess from a legal perspective, I would just say that it’s really important you know whilst there is that risk there it’s really important to cache this as early as possible because there are ways you can set your organisation up. There’s good ways and there’s bad ways to do this exit and you just want to make sure that it’s not a rash decision that you’re making at the last minute because then that highly increases the likelihood of it creating legal repercussions.
Natasha: Yeah. You’re absolutely right. Yeah and I think you know what I would say is big businesses can afford nonperformance. They shouldn’t have them still but they can afford them. Small businesses if you’ve got 10 employees and 2 of yours are underperforming significantly. That’s 20% of your business. What do you think that’s doing to your productivity? It’s massive.
The correlation between engagement and profit
Natasha: One thing that we didn’t touch on which we should is when I talked about some of the research here. Harvard did a fair bit of research around this and it scored engagement and it said where businesses have a score of 75% and above, in other words at the top quartile in comparison to those that were in the bottom 25% and they were scoring above 75% around engagement. They generally got on average 21% more productivity and 20% more profit.
I’m pretty sure most of your listeners right now would be really happy with those results so it really is worth understanding and getting a business to high levels of engagement because it just comes back to you tenfold.
Joanna: Yeah yeah yeah absolutely. Well there you go. You heard it here first. How to add another 20% to your bottom line. Just get your workforce engaged, happy and clear out staff that perhaps aren’t meeting your expectations in the environment. But start having those conversations and getting yourself prepared early in order to avoid legal repercussions or minimise the risk of legal repercussions. All right wonderful Natasha thank you so much for your time today. Is there any other action tips you want to leave with our with our listeners?
Natasha: I think you know first and foremost measure your engagement so you know what it is and you can do that in a very quick and dirty way through a survey monkey with a couple of quick questions. The second one is communicate to your team. The third one is check in on your progress make sure that you ask people. Are you feeling happier than what you were four months ago? Be real and love your clients, defend your clients and love your employee even more.
And again another lovely Richard Branson quote which I share with all of our clients, “Clients do not come first. Employees come first. If you take care of your employees, they will take care of your clients.”
Getting in touch with Natasha
Joanna: That’s lovely. I really like that one. You’ve got some great quotes there Natasha. I like it! How can people contact you if any of our listeners want a little bit more help in this area?
Natasha: Yeah, the best way to contact me would be employeematters.com.au or call us direct on (02) 8021 4206.
We have loads of free checklists on the template that you can download. You can get a copy of my book which is called “From hire to fire, and everything in between” and there is a couple of good chapters around building engaged teams and also communication strategies as well.
Joanna: Fabulous. Wonderful. Well look, it has been an absolute pleasure having you on today Natasha. Some really interesting topics and I think areas that dovetail really importantly into many of the areas that we deal with from a legal perspective. So it’s good to be able to give a really I guess a holistic perspective in this area.
Thank you so much Natasha. I’m sure we’ll have you back on the program again sometime soon to talk about more of these employment matters. There’s certainly something that is very relevant to our audience, and certainly interesting to them and to any business owner, to me as well. I think I’ve learned a lot today.
Natasha: Thank you for having me.
Joanna: That concludes today’s episode with Natasha Hawker, where we drilled into this interesting concept of employee engagement, which we defined as the measure of discretionary effort. This is the extent to which your employees feel passionate about their jobs, and are committed to the organisation. According to a Harvard study, higher levels of employee engagement generally leads to a 20% increase in business profits, which makes it super important that business owners to pay close attention to this area if you want to optimise your business results.
Natasha then left us with 4 actionable tips that you can start adopting in your business to accelerate employee engagement and increase the profitability of your business.
Firstly, you measure your engagement. As they say, what gets measured gets done. You can do this by setting up KPIs across all levels of the business or you can do a very short survey with a couple of quick questions through something like survey monkey.
The second tip is to communicate with your team. It’s not enough to have a business strategy in place. You also have to make sure your entire workforce knows about it and that each individual employee understands their role in helping achieve your goals according to this plan.
The third one is to check on your progress. Make sure that your employees have a platform for providing the business feedback.
And lastly, be an authentic leader and love your clients, and love your staff even more. As Natasha mentioned earlier, if you take care of your employees, they will take care of your clients for you.
If you’re interested to learn more about this topic, you can connect with Natasha and her team at Employee Matters by checking out our show notes at www.talkinglaw.com.au. There we link through to their website and have their contact details if you want to call them directly.
And of course, if you enjoyed what you heard today and you are not subscribed to Talking Law, then check out your favorite podcast player and hit the subscribe button on Talking Law in order to get notifications straight to your phone whenever a new episode is out.
Thanks again for listening in! This has been Joanna Oakey and Talking Law, a podcast proudly brought to you by Aspect Legal.
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