Are Poor Communications Driving Away Your Employees... and Customers?
What is the impact of change on employee engagement? As it turns out HOW you communicate change has a lot of influence on how employees feel about their job. And how they feel about their job translates into the performance of your company and your relationship with your customers.
Change can be a jarring experience for any organization, so Ipsos and CMC wanted to explore the mechanisms of change and how the communication of change impacts employees in their day-to-day jobs. The research shows that about seven-in-ten (68%) Canadian employees are satisfied with their job and when organizations do a good job communicating change in the workplace, job satisfaction jumps 20 percentage points to 88%.
However, when employees don't feel that the lines of communication are clear, it directly impacts how employees feel about their work. As a result, we see job satisfaction figures plummet to 45%.
When organizations don't communicate well, the connection employees have with their work is impacted - they are distracted, productivity declines and worry increases. And your customers can sense that. So company leaders have to ask themselves this question: How good of a job does the organization do with engaging high performers during times of change?
At all times, and especially during times of change, it is important to keep employees aligned and grounded through your communications. Employees need to know what is changing, why it is changing and the possible impacts on them or the job they currently do. And just as importantly, they also need to know what is NOT changing.
In each scenario, context is important and a necessary part of what needs to be communicated. The leadership needs to remember that by the time they begin to roll out change related communications, they themselves have had time to internalize the change. But for many employees, they don't get the same amount of time to internalize the change before they are living the change. Leaders need to provide employees with enough information to keep them anchored during times of change.
Studying change and engagement
In August of 2012, CMC and Ipsos surveyed full time Canadian employees across the country and asked them about their views of the workplace and what mattered to them when at work. In total, 1200 full time Canadian employees responded, representing over 500 different organizations across 25 different sectors.
The CMC/Ipsos research modeled the components of engagement where engagement is defined as the state where employees are both mentally and emotionally connected and aligned with the organization. The data revealed four central components to engagement, or outcome measures. When an employee is engaged with their work they are:
- Satisfied with their job
- Involved in their work
- Aligned with the organization
- More likely to be loyal
Summed up, the research demonstrated that engagement goes beyond being happy at work. Happiness is important and as such job satisfaction is one of the core traits of an engaged employee. But while the research found that 27% of Canadian employees are highly engaged, one-in-five aren't engaged at all. That is alarming! And costly.
What is the cost of disengagement?
The Saratoga Institute calculates the cost of turnover as 1 x the average employee salary in your organization x the voluntary rate of turnover.... No matter how you do the math it is costly and we haven't even factored in the impact on productivity for staff that have to assume the workload until a new hire is made and that person is trained.
You can't have engagement without a measure of loyalty, but you likely do have loyal employees who aren't engaged.
We've seen the costs of those employees that leave, but perhaps more costly are the disengaged employees who stay. Why? Because of the impact they have on their colleagues and on your customers. A negative or indifferent attitude, poor quality of work, or any other shortcoming - colleagues and customers will pick up on these and they will hurt your brand and your business. Failing to inspire employees costs you sales and if you're in the public sector it will impact the public's trust and confidence.
It may be harder to calculate, but disengaged employees are less likely to meaningfully connect with your customers. Employees are a critical link in the customer service value chain. The experience of your organization, brand, product, service, institution at some point depends on an employee.
Add to this that just slightly more than half (54%) of employees agree that their organization communicates clearly with customers. Yet, many organizations portend to be focusing on the customer experience. But if you don't get it right with your employees, how can you get it right with your customers?
Communicating change, by the sector
Let's look at how well employees think their organizations are doing when it comes to communicating change in the workplace.
In the CMC/Ipsos survey of Canadian employees, the research shows that fewer than half of employees across the country give their organization a passing grade - just 42%. For employees working in the government sector, just one-in-three would give a favourable grade to their employer for change communication. On the other hand, the financial services sector say that their organizations do a good job communicating - leading most sectors on this measure.
The impact of clear communication goes beyond the employee as it also touches on corporate recognition. Among those who feel that their organization communicates well, 86% would recommend their employer as a place to work. But among those who don't feel that their organization manages communications well, only slightly more than one quarter (26%) would recommend their employer to family and friends as a place to work.
Why does engagement matter?
It's simple! Engaged employees are 2.5 times more likely to be satisfied with their job and they are 2.5 times more likely to be motivated to excel at their job.
But when employees are thrown off balance by changes in the organization, when they don't feel informed about what's going on and how changes will impact them, the desire to excel plummets from 68% to 44%...effectively knocking the wind out of their sails.
High performers may in fact be among the most vulnerable in your organization during times of change - and they are the very people organizations count on. Why? Because, as we saw in the model (refer to the figure above), engagement requires an understanding of how to align ones motivation to the needs and direction of the organization.
A white paper by Leadership IQ called "Job Performance is not a Predictor of Employee Engagement" found that the biggest predictor of whether high performers will stay with an organization is the degree to which they feel helpless about the trajectory of their career. Organizations that want to get the most out of employees and organizations concerned about managing turnover need to reciprocate the investment top performers make with a genuine concern about their growth and development.
Ipsos' Build A Better Workplace study found that moving an employee from disengaged to highly engaged decreases the probability of departure by an astounding 92%.
Change, communicated poorly, could very well be the catalyst that sets your high performers looking for new employment or gives them pause to accept the recruiter's phone call. Organizations should be asking themselves how prepared are they to manage change?
The Institute for Corporate Productivity (i4CP) found that high performing organizations are nearly 3 times more effective at managing and coping with change.
These organizations are also 4 times better at getting the current culture to embrace change.
Change the way you change.
Leaders need to be equipped with the knowledge, skills and tools to keep employees informed and inspired, especially during times of change. And you need to give special attention to your newest leaders who may, for the first time in their career, be in a position where they are helping to communicate the message and not just listening to the message.
Getting through change requires leaders to step up, to listen, to manage information, to reduce misinformation and to provide the guidance to get everyone through the change. Ultimately, leaders need to help employees see past the change.
When you are not part of the change, it is natural to push back. To increase the organization's readiness for change, to be an agile organization, leaders need to anticipate how employees will interpret, navigate and cope with the changes afoot. Leaders need to create platforms to air resistance, to enlist those that are friendly to the change and to engage the resistors. Organizations not afraid to engage the resistors can pull out the good resistance and avoid costly pitfalls.
You can do this by providing:
- employees with the context that is shaping or, more often pushing, the change
- employees with the path forward, and not just stopping at detailing the change
- not only a vision for the organization, but also including the impact on customers and ensuring you give employees a vision of their path forward
- a forum for dialogue, because the best communications strategies are not just pushed down from the top, they are back and forth discussions between leaders and employees that encourage input and feedback, reward participation and seek out better solutions - and ultimately, cooperation is easier to achieve and is more genuine when there is collaboration, and collaboration is impossible without dialogue
We always hear two clichйs about change - that people are resistant to change and that change is inevitable. It might be truer to say that communication is the catalyst to change. When you consider the negative impact of disengaged employees - on organizational morale, on customer service, on sales - the wiser strategy is to get in front of your employees and communicate change early, often and clearly, because this is a case where an ounce of prevention is worth more than a pound of cure. Your employees and your customers will agree.