Employee engagement shouldn’t just be a HR metric – it deserves the full attention of leadership and needs to be on every board’s agenda. Gallup’s 2023 State of the Global Workplace report shows why. It found that organisations with a highly engaged workforce experience 18% higher productivity, 23% higher profitability and 43% lower turnover.
People are at the heart of every successful business with employees driving performance, customer experience and long-term growth. Their engagement and behaviour are the clearest reflection of an organisation’s culture. “A big part of being on a board is fundamentally looking at what is the culture of the organisation, how do things get done and is that leading to better performance?, says Melanie Richards, an experienced NED, who recently spoke to the Dynamic Boards NED community on the importance of employee engagement.
Board members run the risk of receiving a filtered view on engagement levels within an organisation. In the first blog of this series, we explore what boards can do to bridge this gap in order to gain a collective sense of true employee engagement.
Richards warns against leaning too heavily on employee engagement surveys as a sole source of information as this could give a skewed view of what is happening at the grass-roots level of the organisation. She doesn’t dismiss surveys entirely but emphasises the importance of looking at them alongside other sources of insight to build a holistic picture of how employees are really feeling.
Here are some additional ways boards can deepen their understanding when trying to gauge employee engagement:
Site visits
A great way for NEDs to understand what is happening at the grass-roots level of an organisation is to visit key sites or offices and interact informally with employees.
“Just turning up on the floor and actually meeting people and understanding what they do makes a huge difference,” says Richards. These real-time insights can help NEDs get a sense of the atmosphere, employee morale, teamwork and leadership visibility beyond polished executive reports alone. Building connections with staff and removing the pressure of an overly formal meeting setting can reduce the risk of ‘performance mode’ and encourage more genuine conversations.
Listening groups
Employee focus groups give NEDs the opportunity to listen to the employee perspective first-hand. Given that communication is largely non-verbal—with body language accounting for up to 55%—these face-to-face interactions are particularly powerful for understanding how people are truly feeling. “The more relaxed you can make that environment, the more you hear,” says Richards.
She emphasises the importance of including recent recruits in these sessions, noting that their fresh perspective can reveal a lot about the onboarding process, how the organisation compares to their previous workplaces, and their lived experience of leadership.
“With one of my businesses, I do 8-10 sessions with at least 25 employees each time. I specifically request that they are not curated groups. There is a responsibility when you do a focus group like that: you must remember that your voice is quite influential and therefore you have to be measured and thoughtful in how you represent the organisation,” adds Richards.
Workforce profiles
Analysing the demographics, tenure, role and skillset of both new, existing and past employees helps to give context to the engagement survey data, enabling the board to identify patterns, risks and opportunities. For example, does engagement vary by role, seniority, team, location etc.? Do all groups feel valued in the organisation or is only one type of group or person being consistently promoted and rewarded?
Identifying different profiles across the organisation enables boards to see whether groups are thriving or disengaged. Let’s take new recruits as an example of a group a board might look at. NEDs would want to focus on whether the company is successfully attracting top talent, how new recruits are integrating with the wider workforce and whether they are staying with the company for the long-term.
Attrition metrics
Attrition (employee turnover) and employee engagement are closely linked. The cost of recruitment, training and lost productivity add up so attrition is an important metric for the board to monitor. If engagement survey scores are good but attrition is high, it could suggest survey bias or underreporting of issues. This supports Richards’ point about the importance of using multiple data sources to gain a more comprehensive understanding of workforce engagement.
Sickness records
When combined with other data, attendance reports can be a very good barometer of how people are feeling about an organisation. Assessing whether absence points to reduced job satisfaction or stems from legitimate health problems can reveal insights that aren’t always visible in engagement surveys. The key to doing this is to look for patterns in the data. For example, are there whole teams or departments showing higher sickness rates amongst employees? If so, this could suggest poor leadership, lack of support or low motivation. Another thing to check is frequency of absence since repeated or long-term sickness can hint to stress, burnout or disengagement.
Exit interviews
Not all organisations do these but they can uncover some great nuggets of information. People are likely to be more honest when they are leaving a job and so exit interviews provide a great opportunity for NEDs to uncover underlying issues in the organisation. To get the best possible information from employees exiting the business, it’s important that these interviews are conducted as independently as possible. The Glassdoor website is a great tool to use in conjunction with exit interview data since the anonymous nature of the feedback can result in unfiltered feedback. “That tends to be more useful information if you are in a larger organisation,” says Richards.
Whistleblowing
Look at the issues raised in Whistleblowing reports, and consider whether there are repeated or unresolved issues in certain areas. This data can help Board Members gauge if employees feel safe speaking up.
Disciplinaries
This will help in finding demographic patterns in who is being disciplined, spotting unusually high or low rates of disciplinary actions, whether disciplinaries are being used as a development tool or only punitively and how disciplinary data correlates with attrition and engagement scores. Deep diving into why disciplinaries are being given and the volume conducted across different areas of the business, can reveal whether problems lie with individuals or systemic workplace culture. It’s also important to look at the disciplinary process as a whole – how they are being conducted and by who.
Compensation and rewards
Evaluating reward practices for market competitiveness and internal fairness, and linking these findings with employee satisfaction surveys, exit interviews, and Glassdoor data, helps reveal their impact on employee engagement.
There isn’t one quick answer to establishing how engaged employees are. But the key take away from Melanie’s talk is that you will need to be proactive, curious, and definitely don’t rely exclusively on survey responses!
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