Leadership

Invest in employees or wind up with an unengaged workforce

CFOs need to invest in employee engagement to stay relevant.
article cover

Francis Scialabba

· 5 min read

C’mon, we won’t tell: Are you just not that into your job lately? Maybe the work seems meaningless, or the boss is a pain, or you just don’t feel challenged by the same old, same old.

Low employee engagement is a widespread and expensive problem for organizations of all sizes. But experts tell CFO Brew that by investing in employee engagement and leading by example, CFOs can help combat employee disengagement and boost the bottom line.

There are strategic upsides for organizations that get employee engagement right, especially in the face of economic uncertainty, according to one workplace researcher.

“You better triple down on employee engagement,” Ben Wigert, director of research and strategy of workplace management at Gallup, told CFO Brew. “We know quantitatively that it’s the organizations that are able to engage their employees…[that] survive and out compete their competition.”

For Wassia Kamon, vice president of finance and accounting for ACM Chemistries, a chemical manufacturer based in Georgia, dealing with employee engagement is now a top priority for her finance department.

“Talent retention has been an issue. So anything around employee engagement… it’s very, very important,” she said. “I don’t think there is much of a choice. You have to care about those things.”

Disengagement costs money. Gallup’s “State of the Global Workplace: 2022 Report” found that a vast majority of workers are bored, apathetic, frustrated, and distracted at work and that withdrawal is costing companies, and the global economy, trillions of dollars a year.

Only 21% of employees are engaged at work, according to recent Gallup research, which means barely one-fifth of all employees are fully committed and connected to your organization’s goals. Engaged teams have workers with lower absenteeism, turnover, and accidents, and tend to have higher customer loyalty, according to Gallup.

There’s a strong financial and business case to be made for investing in employee engagement. A 2021 Gallup poll found that it costs businesses one-half to two times the departing employee’s salary to replace them.

On the flip side, strong employee engagement is a financial positive. The same 2021 poll found that highly engaged teams are 14%–18% more productive than teams with low engagement. In 2022, Gallup found that “business units with engaged workers have a 23% higher profit compared to workers with business units with miserable workers.”

“If you tolerate mediocre engagement—which most organizations do—then you’re leaving money on the table,” Jamie Notter, co-founder and cultural strategist at PROPEL, a Washington, DC-based culture consulting firm, told CFO Brew. “You have an opportunity to be doing so much more than you’re doing right now.”

News built for finance pros

The latest news and insights corporate finance professionals need to know to keep up with their constantly evolving industry.

Talk is…not cheap. For Kamon, building employee engagement starts with investing in and developing better organizational communication. So whether that is buying new communication technology like Slack or sending out an employee newsletter, letting employees know that they are appreciated and heard is an important part of boosting engagement, she said.

But that communication is a two-way street. It’s not just leadership telling employees what to do, but also listening to what they want, said Kamon.

“Now what we’ve been doing is looking past the budget to what makes sense and what employees want to see,” she said.

Her company has hired an outside consultant to conduct regular employee surveys to gauge employee engagement and how the company can adjust. That feedback has allowed the company to respond to employee concerns much faster and to see the impact of decision making on employees.

Training for engagement. Investing in training and helping employees achieve their professional goals is also important for building employee engagement, said Notter. But, he added, the training needs to align with the company’s goal of creating a cultural change to increase engagement.

“Giving people training, and what people think they need, is one step because it shows that you care about them,” he said. “Then the other piece is then tie it specifically to the results we need to change.”

Training during the onboarding process, as well as cross training within the organization, has been an important investment for Kamon.

“The training we’re doing is more around education,” she said. “Making sure the employees have access to the resources they need.”

Leading by example. But building employee engagement isn’t just about budgeting for training or buying new technology. Employees become engaged with an organization’s culture, said Notter, and he added that as company leaders, CFOs have a large role to play in shaping their company’s culture.

“You’re creating that culture with your behaviors,” he said. “You can’t drive the entire culture of the entire enterprise from wherever your seat is. But the more intentional you are about it, particularly at a team level, the more you can shine a light.”

Kamon told CFO Brew that she takes the responsibility seriously. Taking a leadership role in building a culture that engages and challenges employees is all part of the evolution of the CFOs role, she said.

“By my title, I have to lead by example,” she said. “Now we feel how…all these non-financial items and transactions and realities—how they all ended up on the financials at some point.”—DA

News built for finance pros

The latest news and insights corporate finance professionals need to know to keep up with their constantly evolving industry.