Reimagining Employee Engagement: Opportunities for Global Corporations (pt 1)

As we move further into 2024, global corporations are grappling with the complex challenge of balancing employee wellbeing with organisational performance, all while navigating diverse cultural landscapes. Gallup’s State of the Global Workplace report underscores a critical issue: 77% of employees worldwide are disengaged. Yet, organisations like Hatch Enterprise and ETIC in Japan are pioneering strategic engagement initiatives that connect employees with meaningful causes.

In this article, we're offering some insights we gathered during two workshops we held in Shibuya, Tokyo and speaking to over 30 corporate partners. The second article (here ) will focus on strategies for companies and their teams to implement to achieve higher employee engagement, increase sales, profits and having a happier, more productive workforce.

The Global Engagement Crisis

Gallup reports that only 23% of employees globally are engaged at work, with figures even lower in regions like the UK (10%) and Japan (5%). These stark statistics highlight the pressing need for large corporations to rethink their engagement strategies, especially in areas where traditional corporate cultures have failed to inspire a genuine connection among employees. Whilst it's nice to see that global overall workforce engagement has risen by 50% from the lows of the 2010s, where it was around 15% globally to now 23%, it is still concerning that this leaves 77% of people who are not engaged.?

Gallup defines employee engagement as “the involvement and enthusiasm of employees in their work and workplace”. Whilst this is quite broad, our recent workshops in Tokyo, attended by representatives from major companies, revealed a consensus: purposeful engagement is essential for revitalising workforce morale and productivity. Engagement should be viewed not just as an HR issue but as a strategic imperative that directly impacts the bottom line.

At a workshop held in Tokyo by Hatch and ETIC in June, leaders from 31 companies focusing on areas such as sustainability, ESG, CSR, D&I, and talent development participated. During the workshop, the participants candidly expressed their struggles in creating opportunities for employee engagement, despite its increasing importance as a strategic imperative that directly impacts the bottom line.

• The challenge is that participating employees are often limited to specific groups, and particularly engaging younger employees remains difficult.
• Since the department consists mainly of remote workers, volunteer activities are organised to enhance engagement with the company. However, a certain segment of employees remains completely uninterested.
• There is a need to review the fixed employee volunteer programmes and evolve them into more inclusive initiatives that more employees can participate in.
• The current system for quantitatively measuring and visualising employee participation in social contribution activities and their impact is not functioning effectively.

Kumiko Akabori, General Manager of ESG at RICOH, a leading provider of integrated digital services and print and imaging solutions, stated: "In Europe, employee social responsibility activities have become a crucial element of employee engagement and a competitive aspect for talent acquisition as well as government procurement requirements. It is essential for our company to more clearly demonstrate the relationship between CSR actions and engagement and gain recognition from the senior management team."

The case for employee engagement with their workplaces?

Here are the top 5 benefits of an engaged workforce for both corporations and their staff:

1. Increased Productivity

Engaged employees are more motivated and committed to their work, leading to higher levels of productivity. They tend to go above and beyond in their roles, contributing to better overall performance. According to Gallup, companies with highly engaged employees are 21% more productive than those with low engagement levels.

2. Higher Profitability

Engaged employees drive better financial outcomes. They are more likely to provide excellent customer service, innovate, and maintain efficiency, which directly impacts the company's bottom line. Gallup’s research also indicates that companies with engaged workforces outperform their peers by 147% in earnings per share. This study showed that a portfolio of Fortune’s “100 Best Companies to Work For” earned about 3.5% more annually than the market average.

3. Improved Employee Retention

An engaged workforce leads to lower turnover rates. Employees who feel valued and connected to their work and the company’s mission are less likely to leave, saving the company costs associated with hiring and training new staff. High engagement also fosters a positive work environment, which enhances loyalty and reduces absenteeism.

4. Enhanced Employee Wellbeing and Happiness

Engaged employees report higher levels of wellbeing and job satisfaction. When employees feel their work is meaningful and appreciated, their overall happiness and mental health improve. This not only benefits the individual but also reduces the incidence of stress-related illnesses and burnout, contributing to a healthier workplace.

5. Better Customer Satisfaction and Sales

Engaged employees are more likely to deliver superior customer service, leading to higher customer satisfaction. When employees are enthusiastic and motivated, it reflects in their interactions with customers, boosting sales and customer loyalty. Companies with engaged employees often see significant improvements in customer ratings and sales growth.

These benefits highlight the importance of fostering engagement within the workforce, not just for the wellbeing of employees, but for the overall success and profitability of the corporation.

Stay tuned for the second part of this article coming out in a few days where we focus on engagement strategies for large organisations and some examples.

For further reading on this topic, you can explore these sources:

1. Gallup’s research on employee engagement and its impact on performance: https://www.gallup.com/workplace/236927/employee-engagement-drives-growth.aspx ?
2. Gallup’s perspective on building a performance-driven culture: https://www.gallup.com/workplace/354842/organizational-culture-paper.aspx ?
3. "Creating Shared Value" by Michael E. Porter and Mark R. Kramer discusses how employee engagement can drive business success, including improvements in stock performance:” https://www.communitylivingbc.ca/wp-content/uploads/2018/05/Creating-Shared-Value.pdf ?

Article written by: Dirk Bischof & Mitsuhiko Yamazaki

Dirk Bischof: Founder and CEO, Hatch Enterprise (UK)

Hatch Enterprise exists to address inequalities in entrepreneurship. We support underrepresented founders to develop the knowledge, confidence, networks and skills needed to launch and grow a business. Since 2014, Hatch has built an active community of 9,000+ entrepreneurs who are starting and growing their businesses across the UK. Find out about our programmes here: https://hatchenterprise.org/about-us/

Mitsuhiko Yamazaki: Director of International Partnerships, ETIC (Japan)

ETIC, a Japanese non-profit organisation, provides another exemplary model for meaningful employee engagement. ETIC focuses on nurturing the next generation of social entrepreneurs in Japan by involving corporate employees in mentoring and supporting young entrepreneurs. Find out about our programmes here: https://international.etic.or.jp/